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2011 global semicon sales growth likely to trend downward for rest of year?

August 8, 2011

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.

According to the WSTS’s HBR, June’s actual sales came in at $27.110 billion with the corresponding June 3MMA sales at $24.677 billion. It should be mentioned that the previous five months (January through May, respectively), experienced very slight upward sales revisions from last month’s published HBR, as highlighted in the table below:

Source: Cowan LRA model, USA.

Source: Cowan LRA model, USA.

The Cowan LRA model’s sales forecast estimates for June as determined (and shared) last month were $29.435 billion (actual) and $25.445 billion (3MMA), respectively. Thus, the model’s June MI (Momentum Indicator) came in at minus 7.9 percent. This indicates (mathematically speaking) that the semiconductor industry’s June actual sales was much lower than the model’s forecasted expectation by $2.325 billion and that, most probably, 2011’s sales growth will continue to trend downward for the rest of this year.

Plugging the latest actual June sales into the forecasting model yields the following updated sales and sales growth forecast estimates for 2011 and the first two quarters of 2012:

Source: Cowan LRA model, USA.

Source: Cowan LRA model, USA.

The key take-aways from comparing the latest versus previous month’s forecast results (from the above two tables) are highlighted here:

* 2011’s global semicon sales forecast estimate dropped by $5.028 billion to $313.363 billion (from last month’s sales forecast estimate of $318.391).

* Correspondingly, 2011’s sales growth forecast estimate fell by 1.7 percentage points to 5.0 percent (from last month’s 6.7 percent sales growth forecast estimate).

* July 2011’s actual sales forecast expectation is projected to be $24.410 billion which corresponds to a July 3MMA sales estimate of $25.007 billion assuming no (or very minor) sales revisions to either May or June’s published actual sales relative to June’s just published HBR by the WSTS.

* The model’s forecast horizon has been extended to reveal its “first look” expectations for the front-end two quarters of 2012.

Next month’s forecast update reflecting July 2011’s sales is expected to be available on or about Wednesday, Sept. 7th, 2011 following the release of the WSTS’s July 2011 HBR.

  1. Mike Cowan
    August 8, 2011 at 6:20 pm

    I would also like to add that it looks like many of the major semi industry market watchers are likewise “zeroing in” on a 5 percent growth forecast number for 2011 with many of them having recently lowered their estimates over the past month or so.

    Mike C. (independent semiconductor industry analyst and developer of the Cowan LRA Model for forecasting global semi sales monthly)

  2. August 11, 2011 at 2:21 pm

    Sure, Mike! In case the US economy fails to hold out for the rest of the year, this number of 5 percent could dive further, reckon so? 😉

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