Global semiconductor sales expectation for 2011 and 2012
This is a continuation of my coverage of the fortunes of the global semiconductor industry. I would like to acknowledge and thank Mike Cowan, an independent semiconductor analyst and developer of the Cowan LRA model, who has provided me the latest numbers.
Various industry watchers most recent 2011 sales growth forecast updates are dropping: from low positive single digits to even lower positive single digits or to low negative single digits. Therefore, the soon to be released WSTS August sales number will be pivotal in pointing directionally to where the 2011 sales growth forecast estimate, as seen by the Cowan LRA model, will end up. Consequently, per the subject the following analysis should assist in providing some insight into next month’s model run update via my monthly look-ahead scenario analysis matrix.
It’s that time of the month again; namely, time for previewing next month’s global semiconductor sales forecast update for both 2011 and 2012 based upon August’s “actual” sales expectation by exercising the “look ahead” forecasting capability of the CowanLRA Model. August’s upcoming global semiconductor sales will be pivotal in determining the sales growth outcome for both the third quarter and the full year of 2011.
In particular, will 2011 exhibit positive yearly sales growth for the industry or will it turn negative as a number of market researchers have recently forecasted based upon downward third quarter guidance being announced by many semiconductor suppliers?
Presented here is a “snap shot” of 2011′s global semiconductor sales and sales growth forecast prospects as a function of August’s “actual” sales forecast estimate range as derived via the Cowan LRA forecast model. Moreover, as part of this month’s update, the model has been extended in order to include a view of what 2012’s sales growth prospects might look like, thereby providing a six-quarter look ahead that allows the model to also capture the four quarters of 2012.
It should be mentioned that August 2011′s “actual” global semiconductor sales number is scheduled to be released by the WSTS via its monthly HBR (Historical Billings Report) on or about Wednesday, October 5th.
In advance of the WSTS’s release of its August HBR, Cowan has presented his monthly analysis leveraging the Cowan LRA forecasting model that projects worldwide semiconductor sales for 2011 (as well as 2012); namely, by providing a “look ahead” scenario for year 2011′s sales forecast range as a function of next month’s (in this case August’s) assumed range of “actual” global semiconductor sales estimates.
The output of this “look ahead” modelling analysis is detailed in the scenario analysis matrix displayed in the table here. A discussion of these results is provided in the paragraphs immediately following Table 1 here.
In order to facilitate the determination of these “look ahead” forecast numbers, an extended range in assumed August 2011′s “actual” sales is selected a-priori; in this particular scenario analysis, an August 2011 sales range from a low of $21.667 billion to a high of $27.677 billion, in increments of $0.250 billion, is pre-selected as shown in the first column of the table.
Note: The range in August sales has been “purposely weighted” toward lower possible August sales estimates, that is, “skewed” toward less monthly sales expectations than done in past look-ahead analyses due to a perceived universal pessimism in industry sales for the second half of 2011 due to lethargic consumers spending brought on by a weak global economy possibly extending into 2012.
This “best-guess” estimated range in assumed “actual” sales numbers is “downward offset” around the August actual sales forecast expectation of $26.177 billion as gleamed from last month’s Cowan LRA Model run (based upon July’s WSTS published “actual” sales number).
The corresponding August 3MMA sales forecast estimate expectation is projected to be $25.686 billion. (Note: This assumes no, or very minor. revisions in either June or July’s previously published “actual” sales numbers released in last month’s HBR by the WSTS).
The overall year 2011 sales forecast estimates corresponding to each of the pre-selected August sales numbers over the selected range of “actual” sales estimates is calculated by the model, and is exhibited in the second column of the table.
The third column lists the associated year-on-year sales growth estimates for 2011 compared to year 2010′s global semiconductor sales of $298.315 billion as reported by WSTS. The fourth and fifth columns show the corresponding August 3MMA, three Month Moving Average, sales forecast estimates and the associated 3MMA year-over-year sales growths relative to August 2010′s 3MMA sales of $25.597 billion, respectively.
The sixth column lists the model’s Momentum Indicator, MI, which is defined as the percentage delta between the actual August sales result and the previous month’s (July’s) sales forecast estimate for August. Finally, the seventh and eighth columns reveal 2012′s forecasted sales and sales growth estimates associated with last month’s August sales forecast estimate expectation, respectively.
Therefore, as the scenario analysis table lays out, depending on the actual WSTS (to-be-released) August 2011 global semiconductor sales number, the forecasted full year 2011 sales estimate as determined by the model could vary between a minimum of $306 billion and a maximum of $315.4 billion.
The corresponding 2010 to 2011 sales growth forecast estimate would then vary between a low of 2.6 percent and a high of 5.7 percent, respectively. Moreover, the table also reveals the model’s expectations for 2012′s sales and sales growth forecast estimates, namely $338.9 billion and 8.3 percent, respectively.
Note: Last month’s previously published Cowan LRA Model’s sales growth forecast estimates for both 2011 and 2012 based on July 2011′s “actual” sales (of $23.495 billion) are summarized in Table 2 for comparison purposes.