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Latest global semicon sales forecast estimates: Cowan’s LRA model

April 11, 2010

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.

Here are the latest forecast results for 2010 global semicon sales estimates associated with the forecasting model — the Cowan LRA model for predicting worldwide semicon sales.

The table provided below summarizes the latest updated global semiconductor sales forecast estimates derived from the Cowan LRA Model and is based upon the just published (by the WSTS) February 2010 actual sales results.

Source: Cowan LRA model.

Source: Cowan LRA model.

The updated sales forecast estimate for 2010 (of $298.88 billion) shows a large drop from last month’s forecast estimate (of $316.20 billion).

This corresponds to a decrease in the year-over-year sales growth estimate of 7.6 percentage points, namely from 39.7 percent to 32.1 percent.

Source: Cowan LRA model.

Source: Cowan LRA model.

It should be noted — the latest WSTS actual monthly sales numbers for Feb. reveal a (strong) downward revision to last month’s Jan sales (down $0.530 billion) as summarized here.

It should be emphasized that each month’s actual global sales number published by the WSTS is a “lagging indicator” since it is released a full month after the fact.

The Cowan LRA Model, however, “turns” this lagging monthly sales number into a “leading indicator” by virtue of its near-term forecasting capability looking out over the next five quarters.

This is the “beauty” of the model and, therefore, makes it dynamic in the sense that it can be run each month utilizing the most recent actual global S/C sales number published by the WSTS.  Thus it allows “rigorous tracking” of the near-term sales forecast outlook for the global semiconductor industry on an “almost” real-time basis.

Consequently, the model’s monthly sales forecasts do not “sit still” but “evolve” with each month’s latest sales number.  Since conditions change rapidly and unexpectedly in the semiconductor industry, market forecasters are hard pressed to keep up with these changes.

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