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Not All Semiconductor
Forecasters are Reducing 2003 Targets
Cupertino, Calif. - November 12, 2002 -- Weaker than
anticipated IC sales, declining semiconductor equipment bookings, and a
general lack of visibility throughout the semiconductor supply chain have
caused several industry forecasters to significantly modify their
forecasts for 2002 and now also for 2003. Not so for Advanced
Forecasting, Inc. (AFI), a quantitative based forecasting group from
Silicon Valley.
“It’s desperation spreading among industry observers who
were expecting the long awaited but, yet to materialize, 2H’02 recovery,”
said David Crume, AFI’s director of marketing and sales, adding that
“considering the fact that we were presented with projections of IC growth
in 2002, which were between 14% and 20%, I’m not surprised that some
analysts are now reducing their projections for 2003 by more than 50%.”
The 2002-year is expected to end with a dismal IC growth, around zero
percent, as originally forecasted by AFI.
“Reducing forecasts for 2003 following unfulfilled
predictions for 2002 is a natural, though damaging, trait of qualitative
forecasts based on industry consensus,” reiterates Dr. Handelsman, founder
of AFI. “It is risky to extrapolate the strength of the 1997 and 1999 IC
recoveries, which were fast to improve, into 2002,” warns Handelsman,
“because the profiles of IC Cycles do not repeat themselves, forcing
analysts to reduce their target numbers repeatedly to the current
negligible figure.”
In contrast, AFI sees a close similarity between the 1985
and the 2001 recessions, both sharing a deeper decline and a non-symmetric
recovery. Dr. Handelsman recalls a related set of forecasters who in
late 1986 underestimated 1987’s growth, following a slow and shaky
recovery during 1986. Actually, 1987 was a great year of above 25%
growth and IC vendors lacked capacity at the end of that year.
Due to exclusive use of quantitative forecasting models that
do not allow input from human beings, Advanced Forecasting, who deciphers
the timing of the significant industry turning-points for the IC and
related industries, has maintained its accurate forecast for 2002, and is
not modifying its forecast for 2003 either.
In its November 2002 report to clients, AFI is quick to
point out that the recent stagnation is a natural by-product of an
industry emerging from an extremely deep recession. Vendors and suppliers
that extrapolated the early stages of the 2002 recovery into 2H’02 might
have overshot "true" demand, sending the industry back to a higher level
of over-capacity.
AFI offers monthly quantitative forecasts of all ICs, semiconductor
equipment (Front-End and Back-End), disk drives, PCBs, Fab Capacity
Utilization, Wafer Shipments and DRAM ASPs. Forecasts’ rolling horizons
extend up to 29 months. AFI is the only forecast firm that has
guaranteed its forecasting services with a full refund period since its
inception (1986).
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