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Mar 05, 2007 at 04:20 PM |
Barely into March, Gartner is lowering its targets for semiconductor growth this year. Once upon a time, those crystal ball gazers could see clearly enough to provide a forecast a year ahead with a mid-year ‘update' that would be good enough to last until the year-end. Those days seem to be long gone as market research firms in general are now keen to micro-manage forecasts on a quarterly basis, or even less frequently!
Though Gartner has made a significant cut to its forecast - down from 9.2 percent to 6.4 percent for this year, due to the sluggish start and over-supply issues expected to carry for a few more quarters - it is hard to believe at this point that Gartner will not raise its forecast again in the third quarter, should supply/demand factors prove more favorable.
It also begs the question of how much validity we should attach to forecasts that seem to last only a couple of months?
In a general defense of this trend, it has become apparent that clients of market research firms are demanding more frequent updates as part of a general need to react more quickly to market forces. To that end we have definitely seen chip manufacturers turn the fab taps off as soon as over-supply issues loom, though this cannot be said of all sectors.
While Gartner made it clear as to its reasons for downgrading growth, they didn't mention the fact, highlighted by Malcolm Penn over at Future Horizons recently, that a potential big positive this year is the rise in chip ASPs. Historically, a whole host of factors are at play concerning ASP trends, which take at least a year to play out before a new trend is established. Penn is one who believes that the rise in ASPs should be taken into account when forecasting, but it does seem absent on the surface when negative issues are played.
Though Gartner has lowered its forecast, it is not a given that the others will follow. Saying that, so few stick to six-monthly updates that it is almost inevitable that we will see tweaking by some, and major adjustments by others.
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