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2011 sales estimate could vary between $303.8 billion and $311.9 billion: Cowan LRA model

October 20, 2011 4 comments

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.

It’s that time of the month again; namely, time for an advanced showing of next month’s global semiconductor sales forecast updates for both 2011 and 2012 as gleamed from September’s “actual” sales expectation range by exercising the “look ahead” forecasting capability of the Cowan LRA forecast model.

September’s upcoming global semiconductor sales result should, therefore, be instrumental in determining the sales growth expectation not only for the third quarter of 2011 but also for the full year of 2011. In particular, one can ascertain whether 2011 will 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 sales guidance recently announced by many semiconductor suppliers?

Therefore, presented here is a “snap shot” of 2011’s global semiconductor sales and sales growth forecast prospects as a function of September’s “actual” sales forecast estimate range as derived via the Cowan LRA forecasting model. Moreover, 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 horizon that allows the model to also capture the four quarters of 2012.

It should be mentioned that September 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 Friday, November 4th.

Source: Cowan LRA model.

Source: Cowan LRA model.

In advance of the WSTS’s release of its September HBR, here is the monthly outlook analysis leveraging the Cowan LRA forecasting model, which 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 September’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.

In order to facilitate the determination of these “look ahead” forecast numbers, an extended range in assumed Sept. 2011’s “actual” sales is selected a-priori. In this month’s scenario analysis outlook, a Sept. 2011 sales range from a low of $27.028 billion to a high of $33.028 billion, in increments of $0.250 billion, is pre-selected as listed in the first column of the table. Read more…

Global semiconductor sales forecast estimates fall: Cowan LRA model

October 9, 2011 1 comment

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.

The WSTS posted August 2011’s HBR (Historical Billings Report) on its website on Monday, October 4th, 2011, thereby allowing the calculation of the monthly update of the latest global semiconductor sales forecast estimates for 2011 and 2012 via exercising the Cowan LRA forecasting model reflecting August 2011’s monthly sales including any revisions to previous months’ reported sales numbers. According to the WSTS’s August HBR, August’s actual global semiconductor sales came in at $24.216 billion with a corresponding August 3MMA sales of $25.033 billion.

Source: Cowan LRA model, USA.

Source: Cowan LRA model, USA.

It should be highlighted that none of the previous seven months (January through July) experienced any sales revisions from last month’s published HBR. Thus, the total YTD cumulative sales through August totaled $198.271 billion.

This represents a 2011 YTD sales growth of 2.2 percent compared to the same time period in 2010 when August 2010’s YTD sales were $193.976 billion. This continues a downward trend in the month-to-month 2011 YTD sales growth numbers since the beginning of the year as shown in the table here.

The Cowan LRA model’s sales forecast estimates for the month of August as determined by last month’s model run were $26.177 billion (actual) and $25.686 billion (3MMA), respectively. Consequently, the model’s August MI (Momentum Indicator) came in at minus 7.5 percent, which “degraded” from last month’s MI of minus 3.7 percent.

Source: Cowan LRA model.

Source: Cowan LRA model.

This indicates (mathematically speaking) that the semiconductor industry’s August actual sales came in much lower than the model’s previous month’s forecasted expectation by $1.961 billion. This implies that 2011’s sales growth could continue to trend downward for the rest of this year relative to this month’s sales growth expectation of 3.9 percent as discussed here.

The key take-aways from comparing the latest forecast estimates vs. the previous month’s projections (as displayed in the table) are highlighted here:

* 2011’s updated global semiconductor sales forecast estimate fell by $3.219 billion to $309.998 billion (from last month’s sales forecast estimate of $313.217).
* Correspondingly, 2011’s sales growth forecast estimate dropped by 1.1 percentage points to 3.9 percent (from last month’s 5.0 percent sales growth forecast estimate).
* September 2011’s actual sales forecast expectation is $31.528 billion, which corresponds to a September 3MMA sales estimate of $26.413 billion assuming no (or very minor) sales revisions to either July or August’s published actual sales compared to August’s just published HBR by the WSTS.
* 2012’s global semicon sales forecast estimate fell by $3.817 billion to $335.627 billion (from last month’s sales forecast estimate of $339.443 billion).
* Correspondingly, 2012’s sales growth forecast estimate dropped by 0.1 percentage points to 8.3 percent (from last month’s 8.4 percent sales growth forecast estimate).

Next month’s Cowan LRA model’s forecast update, which will reflect September 2011’s actual global semiconductor sales, is expected to be available on or about Tuesday, Nov. 8th, 2011 following the posting of the Sept. HBR on the WSTS’s website.

Steve Jobs: Master of the game!


Steve Jobs. Source: Apple.

Steve Jobs. Source: Apple.

This morning, I woke up to find the headline staring at me: Steve Jobs has died! RIP, Steve Jobs!

I first had a look at the Apple Mac while at SBP Consultants & Engineers back in 1988. I was pleasantly surprised to find a computer that could do desktop publishing that well! By then, Jobs had gone out of Apple, fired by John Sculley, then Apple’s CEO, sometime in 1985.

Jobs only returned to Apple in 1996, a time when he had floated PIXAR and of course, NeXT — the company that Apple eventually bought and with that, returned Jobs to Apple. The rest, as they say, is history!

First, Jobs, and of course, Apple, brought color to computers, when the iMac line was launched. I remember seeing the entire line in Hong Kong! The iMacs were followed by the ‘now very well known’ iBook!

Next, Jobs focused on the music industry, and that led to the creation of the revolutionary iPod, as well as the Apple Store. I remember several suppliers in Hong Kong and China telling me that they were grateful to Apple for ‘rewriting the musical devices history’ with the iPod. Those suppliers were very much in business, and continue to remain so, till today.

And then, the iPhone happened in 2007! The iPhone 4S, launched yesterday, serves as a reminder of Jobs’ vision and strategy. The iPhone caught everyone in the telecom industry napping! Suddenly, there was a rush to produce iPhone clones or iPhone-like phones. Of course, this also hit a major telecom player in a big way!

Today, smartphones are all the rage! But, believe it or not, no one, yes, no one, has actually come close to what Apple and Steve Jobs have managed to do with the iPhone.

The revolutionary iPad, which hit the streets in 2010, literally gave a new lease of life to computing! It also opened a new section – tablets – in front of the computing world. Today, all of the tablets that you get to see from numerous players is only because of Jobs’ and Apple’s magnificient vision!

This August, Jobs stepped down as Apple’s CEO. Who knew that he would pass away to eternity in early October? There is a message on Apple’s site, which I am pasting here:

“Apple has lost a visionary and creative genius, and the world has lost an amazing human being. Those of us who have been fortunate enough to know and work with Steve have lost a dear friend and an inspiring mentor. Steve leaves behind a company that only he could have built, and his spirit will forever be the foundation of Apple.”

Symantec releases latest Intelligence Report!

September 29, 2011 Comments off

Source: Symantec Intelligence Report.

Source: Symantec Intelligence Report.

Symantec presented its latest Intelligence Report with the following highlights:

* Spam – 74.8 percent in September (a decrease of 1.1 percentage points since August 2011).
* Phishing – One in 447.9 emails identified as phishing (a decrease of 0.26 percentage points since August 2011).
* Malware – One in 188.7 emails in September contained malware (an increase of 0.04 percentage points since August 2011).
* Malicious Web sites – 3,474 Web sites blocked per day (an increase of 1 percent since August 2011).
* 44.6 percent of all malicious domains blocked were new in September (an increase of 10.0 percentage points since August 2011).
* 14.5 percent of all Web-based malware blocked was new in September (a decrease of 2.9 percentage points since August 2011).
* Malicious emails masquerade as office printer messages.
* Spammers exploit WordPress vulnerability to promote pharmaceutical spam Web sites Fake Offers with Fake Trust Seals. (One hopes WordPress is aware of this and taking remedial action!)
* Spammers and malware authors making increasing use of obfuscated JavaScript.

The spam rate was 74.8 percent, as against last month’s 75.9 percent. The top five geographies are Saudi Arabia 84 percent, Russian Federation 79.9 percent, Malaysia 79.8 percent, Luxembourg 79.1 percent and Italy 78.6 percent. The top five verticals targeted are automotive 77.8 percent, education 77.2 percent, marketing/media 76.4 percent, non-profit 76.4 percent and manufacturing 76.2 percent.

As for spam sources, US leads with 47.5 percent of spam originating from there. India at 9.6 percent, UK at 8.1 percent, Brazil at 7.6 percent, Russian Federation at 6.7 percent, China at 5,4 percent, Germany at 4.3 percent, Vietnam at 3.8 percent, Japan at 3.8 percent and Canada at 3 percent, make up the top 10 countries.

As for virus, 72 of email-borne malware was associated with variants of generic polymorphic malware, including Bredolab, Sasfis, SpyEye and Zeus variants.

New malware and spyware sites are appearing per day. Around 44.6 percent of all malicious domains blocked were new in September; an increase of 10 percentage points compared with August. Also, 14.5 percent of all Web-based malware blocked was new in September; a decrease of 2.9 percentage points since August.

Next, 20.8 percent of the most frequently blocked malware last month was identified and blocked using generic detection.

Global semiconductor sales expectation for 2011 and 2012

September 25, 2011 Comments off

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.

Table 1: Source - Cowan LRA model.

Table 1: Source - Cowan LRA model.

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. Read more…

Electronica/Productronica 2011, here I come!

September 12, 2011 3 comments

I am back in New Delhi, covering the electronica/productronica 2011 show! This is my second time at the show, however, the first time in New Delhi, as the previous year’s edition was held in Bangalore.

Is there anything new that I see? Perhaps, not as yet! However, I shall reserve comment till I visit the show.

What I do notice is more or less a similar, or familiar set of names of exhibitors, if the one put up by the organizers on their website is correct. Maybe, there are a few additions, but that’s all I can say, for now!

STMicroelectronics seems to have become a new addition, as is Renesas Electronics Singapore Pte Ltd. One other addition seems to be SiPlace, Of course, the show is graced by familiar names, such as Bergen Associates, element14, EMST Marketing, Inde Enterprises, Juki India, Leaptech, Murata, NMTronics, NXP, QUAD Electronics, Rohde  & Schwarz, RS Components, Sumitron and so on!

There is one other difference! Most of these firms are multinational companies (MNCs) or arms of the MNCs. While I don’t have anything against them, one is tempted to ask the question: where are the Indian companies? Specifically, where are the ‘so-called’ Indian electronics manufacturing companies?

We all love to talk about how India should play a major role in electronics manufacturing. However, seriously, how much of this is actually happening in India? More precisely, where are the home grown Indian manufacturing units?

I noticed that one of the sessions is going to be a panel discussion titled: Local mobile phone manufacturing: Opportunity or challenge!! Wonder, what will come out of the session! There’s another on EMS – where, again, the weight lies with the MNCs. Of course, there are two speakers — N. Jehangir from SFO and Raminder Singh from QUAD, in the final session. The other session on automotive electronics also seems to be loaded with speakers from MNCs.

Can India really get to become a global hub for EMS? Well, let’s just wait and see what exactly do these august gentlemen in the two panel discussions have to say!

Global semicon sales forecast: Cowan LRA model

September 8, 2011 1 comment

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.

The WSTS posted July 2011’s HBR (Historical Billings Report) on its website last Sunday, September 04, 2011 thereby allowing the monthly update of the latest global semiconductor sales forecast estimates for 2011 and 2012 via exercising the Cowan LRA forecasting model that reflects July 2011’s monthly sales numbers including any sales revisions to previously reported sales results.

According to the WSTS’s July HBR, July’s actual sales came in at $23.495 billion with a corresponding July 3MMA sales at $24.850 billion.

Source: Cowan LRA model.

Source: Cowan LRA model.

It should be highlighted that the previous five months (February through June) experienced varying upward sales revisions from last month’s published HBR, as highlighted in the table here. Thus, the total YTD cumulative sales revision is upward by almost $1.0 billion bringing the YTD sales through July to $174.055 billion. This represents a 2011 YTD sales growth of 3.2 percent compared to the same time period in 2010.

The Cowan LRA model’s sales forecast estimates for July as determined by last month’s model run were $24.410 billion (actual) and$25.007 billion (3MMA), respectively. Consequently, the model’s July MI (Momentum Indicator) came in at minus 3.7 percent which “improved” from last month’s MI of minus 7.9 percent. This indicates (mathematically speaking) that the semiconductor industry’s July actual sales came in lower than the model’s previous month’s forecasted expectation by $0.915 billion and 2011’s sales growth could continue to trend downward for the rest of this year all be it at a slower rate compared to last month’s MI.

Plugging the latest actual sales numbers abstracted from the July HBR into the forecasting model produces the following updated sales and sales growth forecast estimates for the remaining two quarters of 2011 as well as the four quarters of 2012 and full year:

Source: Cowan LRA model.

Source: Cowan LRA model.

The key take-aways from comparing the latest forecast results versus previous month’s forecast numbers (in the above table) are highlighted below:
*  2011’s updated global semicon sales forecast estimate fell marginally by $0.146 billion to $313.217 billion (from last month’s sales forecast estimate of $313.363).
*  Correspondingly, 2011’s sales growth forecast estimate dropped by 0.049 percentage points to 4.995 percent (from last month’s 5.044 percent sales growth forecast estimate).
*  August 2011’s actual sales forecast expectation is $26.177 billion, which corresponds to an August 3MMA sales estimate of $25.686 billion assuming no (or very minor) sales revisions to either June or July’s published actual sales compared to July’s just published HBR by the WSTS.
*  2012’s global semicon sales forecast estimate fell by $4.270 billion to $339.443 billion (from last month’s sales forecast estimate of $343.713).

June 2011 global semicon sales expectation for 2011: Cowan LRA model

July 17, 2011 Comments off

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.

June 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 Friday, August 5th. The monthly HBR is posted by the WSTS on its website.

In advance of the upcoming June sales release by the WSTS, Mike Cowan will detail an analysis capability using the Cowan LRA forecasting model to project worldwide semiconductor sales for 2011; namely, the ability to provide a “look ahead” scenario for year 2011’s sales forecast range as a function of next month’s (in this case June’s) “actual” global semiconductor sales estimate.

Source: Cowan LRA model.

Source: Cowan LRA model.

The output of this “look ahead” modeling capability is captured in the scenario analysis matrix displayed in the table below. The details of these forecast results are also summarized in the paragraphs immediately following the table.

In order to facilitate the determination of these “look ahead” forecast numbers, an extended range in possible June 2011’s “actual” sales is selected a-priori; in this particular scenario analysis, a June 2011 sales range from a low of $27.935 billion to a high of $30.935 billion, in increments of $0.250 billion, was chosen as listed in the first column of the table.

This estimated range in possible “actual” sales numbers is “centered around” a projected June sales forecast estimate of $29.435 billion as gleamed from last month’s Cowan LRA Model run (based upon May’s WSTS published “actual” sales number). The corresponding June 3MMA sales forecast estimate is projected to be $25.445 billion. (NOTE – assumes no, or minor. revisions in either April or May’s previously published “actual” sales numbers released last month by the WSTS).

The overall year 2011 sales forecast estimate for each one of the assumed June sales over the pre-selected range of ‘actual’ sales estimates is calculated by the model, and is shown in the second column of the table. Read more…

Time to stop agonising; 2011 will be a strong year!

January 27, 2011 1 comment

Malcolm Penn, Future Horizons.

Malcolm Penn, Future Horizons.

This is a summary by Malcolm Penn, CEO, Future Horizons. For those who wish to know more, please get in touch with me.

November’s WSTS results were distorted by a billion dollar downgrade (restatement) to the year-to-date numbers.  These things do happen from time to time, but one of this size quite rare.

The overall impact was to reduce the year to date market by around half a percent; not so bad per se but, due to its leverage, it reduced the overall year-on-year market growth by a couple of percentage points!

As a result we have downgraded our 2010 forecast to (a still very reasonable) 30 percent.  This falls into the category of ‘tweaking the final number’ though … it is not a change to our underlying forecast sentiment or outlook.

Re-statements aside, what then for the outlook for 2011?

Looking at our four horsemen of the semiconductor apocalypse:

1.  Economy – grew ~4.8 percent in 2010 (IMF) and is forecast to grow 4.2 percent in 2011.
2.  Capacity – effectively sold out; with Cap Ex spending now flat and the book-to-bill below parity.
3.  ASPs – have been increasing now since Q2-2009 … six quarters in a row.
4.  IC units – are in a ‘steady as you go’ mode with NO excess inventory and NO excess capacity to build any.

In short, whereas this time last year the problem was getting any orders, the problem today is getting semiconductor product.  The chip market fundamentals really do not get any better than this, yet industry pessimism it at its highest since the Lehman Brothers collapse.

What concerns us is the industry perception that moving from a 30 percent growth year to single digits in 2011 heralds yet another classic chip market boom turned to bust.  It does not.

The same is true everywhere you now look in the food chain … few people or firms will commit anything to any one beyond the immediate deal; business is now turn’s driven, not for strategic long-term vision or gain.

The current Mexican standoff in the 450mm wafer transition debacle is another industry supply chain mismanagement example, with the chip industry saying ‘yes please’ and the equipment suppliers saying ‘no thanks’. Yet where is the SIA and SEMI in this debate? Siding with their members rather than orchestrating a solution.

Likewise, who in the infrastructure is counting and measuring real industry demand? The WSTS in its (lack of) wisdom stopped publishing orders, and the associated book-to bill, data several years ago, despite the latter being one of the key original measurement tools when the system was created under the directionof data visionary Jack Beadle (then with Motorola).

Needless to say it was dropped for all the wrong reasons … to try to keep the financial community offindustry’s backs. As a result, the industry now has no structured order visibility!

Entering 2011 we thus see the industry fundamentals in especially good shape, a fact that can clearly be seen if you redraw the graphs to take out the ‘data crash’ caused by the Lehman Brothers collapse.

* Continuing Cap Ex famine, despite 2010’s 140 percent Cap Ex spending growth.
* Falling Cap Ex book to bill (since August 2010) now less than 1 (December).
* Six successive quarters of flat industry capacity, cruising well below excess capacity threshold levels.
* Supply-chain mismanagement; no trust, no confidence, no commitment … no business?
* Shortages everywhere … from substrates (e.g. 200mm wafers), equipment (try buying an immersion stepper or single wafer epi reactor), to lead frames (especially given the desire to move from gold to copper-based packaging).
* Industrial and automotive products now completely sold out … even memories are starting to get tight.

Do not be misled by the single digit growth number … 2011 will be a very strong year for the chip industry. 2012 will be a double-digit boom.

More ‘fabless IC billionaires’ in 2010, says IC Insights! Is India listening?

December 22, 2010 5 comments

Brilliant! There’s no other word to describe the first part of this headline!

As per IC Insights’ forecast of 2010 billion-dollar fabless IC suppliers, excerpted from a ranking of top 50 fabless IC suppliers in its ‘ 2011 edition of The McClean Report’, as many as 13 fabless IC suppliers are tipped to cross the $1-billion mark in sales in 2010! As per IC Insights, this is a significant step up — from 10 companies in 2009 and eight in 2008.

Leading fabless IC suppliers. Source: IC Insight, USA.

Leading fabless IC suppliers. Source: IC Insight, USA.

Just sit back and admire this table. There are nine firms from the US — Qualcomm, Broadcom, AMD, Marvell, Nvidia, Xilinx, Altera, LSI and Avago, three from Taiwan — MediaTek, Novatek and MStar, while ST-Ericsson is Europe’s lone representation in this stellar list.

In this august club of IC billionaires, no surprises, but Qualcomm retains the top place for the third consecutive year. Broadcom moves up a place. AMD should become the world’s third largest player.

Broadcom at 53 percent, Marvell at 34 percent, Xilinx at 39 percent, Altera at 63 percent, Avago and Novatek at 40 percent each are top performers. However, MStar of Taiwan steals the show with an estimated 75 percent growth in 2010.

Qualcomm, Nvidia and LSI have performed well, especially  the last two – coming pff a difficult 2009. Taiwan’s MediaTek has seen the biggest slip — down to 3 percent in 2010 from 22 percent in 2009.

There is no representation from Japan in the fabless IC billionaires club. IC Insights has indicated that the fabless/foundry hasn’t caught on in Japan and is unlikely to do so in the near future. However, Taiwan and China based firms should sooner or later find their way into this club.

I will now come to India! Read more…

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