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Cowan’s LRA model’s global semiconductor sales forecast

October 13, 2009

Continuing with my coverage of the fortunes of the global semiconductor industry, here’s the global semiconductor industry sales forecasts, by Mike Cowan. Here, I’d like to acknowledge Mike for sharing his findings and thank him for his continuous tracking of the semiconductor industry.

The presently updated global S/C sales forecast estimates are based upon the recently published August 2009 actual sales numbers released by the WSTS (posted on their website on Oct 6 (http://www.wsts.org/public/files/bbhist-23.xls).

The table details the latest, updated forecast numbers covering the next six quarters, that is, from 3Q09 through 4Q10, respectively, as well as for the full years of 2009 and 2010.

As the table shows, the latest forecast updates for years 2009 and 2010 chip sales forecast estimates both increased by +1.5 percent to $208.5 billion and $225.4 billion, respectively, compared to last month’s sales forecast estimates of $205.4 billion and $222.1 billion, respectively.

The updated 2009 and 2010 chip sales forecast estimates correspond to yr-o-yr sales growth forecast estimates of -16.1 percent and +8.1 percent, respectively, which represent a continuing improvement compared to last month’s sales growth prediction of -17.4 percent for 2009, but maintaining the status quo for 2010 at +8.1 percent.

Latest quarterly sales and year-on-year sales growth forecast estimates -- Cowan LRA model.

Latest quarterly sales and year-on-year sales growth forecast estimates -- Cowan LRA model.

Sources: Actuals => WSTS; Forecasts => Cowan LRA Forecasting Model (Oct 2009)

It should be highlighted that the actual cumulative YTD (through August) sales number of $133.82 billion represents a YTD sales decline of 21.3 percent relative to last year’s August actual cumulative YTD sales of $170.12 billion.

Therefore, the latest model run projects an improvement in 2009’s full year’s sales growth estimate (of -16.1 percent) relative to August’s 2009 actual cumulative YTD sales growth decline (of 21.3 percent).

Remember that the model is dynamic, that is, is recalculated each month as the year plays out; therefore today’s latest, updated full year sales growth prediction will not sit still but will evolve over the coming months.

Additionally, the model also projects a sales forecast estimate for next month, namely for September, 2009. Thus September’s (actual) sales forecast estimate is projected to be $21.15 billion, which corresponds to a 3MMA sales forecast estimate of $19.68 billion as normally published by the SIA.

Watching the watchers

In addition to running the forecasting model each month, Cowan also “monitors” the semiconductor sales prognostications of a wide range of other semiconductor industry watchers (including both WSTS and SIA bi-yearly forecasts) thereby tracking what each of their respective predictions are for 2009’s sales growth (compared to 2008).

Various semiconductor market watchers/analysts – 2009 chip sales growth forecasts.

Various semiconductor market watchers/analysts – 2009 chip sales growth forecasts.

The distribution graphic summarizes (and pictures) the 2009 sales growth forecast estimates for 21 other market researchers (besides Cowan himself). As shown in the ongoing revisions for each one of the market analysts, 2009 sales growth estimates are listed along with the latest updates over the past month – three during this reporting period – highlighted with (<== UPDATE).

Various semiconductor market watchers/analysts – 2009 chip sales growth forecasts.

Various semiconductor market watchers/analysts – 2009 chip sales growth forecasts.

As is evident from perusing the numbers for the group included in the tables and plotted in the histogram, the most update 2009 sales growth prediction range is a relatively broad distribution and displays a tri-modal “signature” hovering around declines of minus 20 percent (eight forecasters), minus 17 percent ( five forecasters) and minus 12 percent ( six forecasters), respectively.

Histogram of latest 2008=>09 chip sales growth forecasts for various semiconductor industry market watchers/analysts (total of 20).

Histogram of latest 2008=>09 chip sales growth forecasts for various semiconductor industry market watchers/analysts (total of 20).

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