2007 holds a
Downward Turning-Point in Semiconductors – what about 2008?
June 18, 2007 –
Saratoga, CA -- The semiconductor trade association has just cut its
2007 global semiconductors revenue growth forecast from 10% to 1.8%.
This was a drastic change that may easily regress into negative growth.
Will similar revisions impact 2008?
Contrary to other
forecasting sources that have recently made similar revisions (a process
that reiterates until most narrow in on actuals by year-end), Advanced
Forecasting, a Silicon-Valley quantitative forecasting group, has
maintained its forecast of February 2006 in which it alerted users to
expect a significant downward turning-point in underlying demand for ICs
in mid-2007. The firm is also unique in its policy to never change
forecasts retroactively after publishing them. Its quantitative
forecasting model allows the company to set predictions well in advance
without modification.
“The recent,
mid-year severe cuts in forecasts for 2007 prove yet again that
forecasts which include opinions/surveys in their methodology do a poor
job of predicting a change in direction. A purely quantitative model
may be the only tool capable of doing just that, as it has done in the
past 21 years, because it omits extrapolations due to human opinion,”
says Dr. Moshe Handelsman, founder of Advanced Forecasting, alerting
that, “the question at hand is not what will happen in 2007. That’s
almost history. It is whether 2008 will behave as rosy as many
forecasters still believe.”
Regarding 2008, he
suggests that decision-makers focus on:
(1) The methodology
behind 2008 forecasts. Any forecast that includes opinions, even as a
small portion of the model, should be taken with a grain of salt. Its
predictions are likely to change.
(2) Whether there
is a major turning-point embedded within a forecast of annual growth
rate rather than to the absolute value of the forecasted growth. The
former is more detrimental to the bottom line. Take, for example, 2000
to 2001: the growth rate of 2000 was 36%. However, October 2000 was the
Turning-Point of the most disastrous recession for the industry.
Founded in 1987,
Advanced Forecasting is a leader in
forecasting demand for semiconductors, semiconductor
equipment by segment, and
materials industries. Its unique specialties include using
purely quantitative input and never retroactively modifying
forecasts. Advanced Forecasting provides the industry’s
most accurate forecasts and has acquired a user base of more than
400 companies worldwide.
Contact:
Dr. Moshe Handelsman
Advanced Forecasting
moshe@adv-forecast.com
Toll Free: 1.888.658.3227
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