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Take a deep breath: IC Insights offers calm advice amid the gathering recessionary storm |
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Mar 25, 2008 at 09:59 AM |
The possibility of a US recession has become less of a threat and more of a reality faster than you can say "Bear Stearns." But to link such macroeconomic doom and gloom to the likelihood of a semiconductor industry downturn may be premature, according to IC Insights.
In the market research group's March update to its annual report, Bill McClean and his team caution against any reevaluation of industry forecasts until the numbers come in for the first quarter of 2008.
Gartner, iSuppli, and other prognostication purveyors have already started battening down the hatches in anticipation of the gathering economic storm, downgrading their forecasts to very low single-digit growth---or worse. Although it believes the US is "teetering" near that recessionary "point," IC Insights has said, hold on a minute here, let's wait for the data to bear this out, since the first quarter results often say alot about the likely scenario for annual market growth.
For now, the firm is sticking to its 9% growth forecast for the sector, although if the conditions for a more negative scenario were to take place, the forecast would drop to a 3% downtick. Here's why the company believes we should wait to pass judgment until the end of next month, when the 1Q2008 numbers come in from SIA and elsewhere.
"The 2008 edition of IC Insights' McClean Report shows that there have been five years since 1975 when the IC industry posted a negative growth rate (1975, 1985, 1996, 1998, and 2001). In those years, the 1Q/4Q IC market displayed at least a 9% decline (1975, -13%; 1985, -18%; 1996, -9%; 1998, -10%; and 2001, -20%). If the sequential decline in the 1Q08/4Q07 IC market is 9% or worse, IC Insights believes that the 2008 IC market would be on pace to register a negative year. While the potential for a negative growth year exists, IC Insights is not ready to change its forecast just yet. Rather, we believe it is more prudent to stay with our current outlook of 9% growth at least until complete 1Q08 results become available---typically in the last week of April---before making any adjustments. All too often, IC forecast revisions made in the late winter must be revised back up in the summer."
Let's all take a deep breath, and relax---for now.
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Comment by GUEST on 2008-03-27 14:58:14
I have taken a different approach to my forecasting methodology. The Cowan LRA Model for forecasting global semiconductor sales employs linear regression analysis of the past 24 years of monthly semiconductor sales as published (each month) by the WSTS. As such my forecast is updated each month immediately following the release of the latest, actual global semiconductor sales number.
My latest forecast result was issued on March 4th, 2008, is based upon Jan 2008's sales number and projects a 2008 sales growth expectation of 4.7% (one half of IC Insights' present forecast) which fell quit dramatically from the previous month's forecast of 6.8%. My next forecast will be issued on April 2, 2008 following the posting of February 2008's actual sales number scheduled for the end of March.
Obviously, if IC Insights plans on waiting until the 1Q08 sales result becomes available, then one will have to wait until the end of April for its update. By then I will have issued a second monthly forecast based upon March 2008's sales result.
Mike Cowan |
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