In Light of the Dismal Growth of Semiconductor Sales During 2002, How Well Did Forecasters Do Their Job? 

Cupertino, California – December 2, 2002  -- WSTS has just released Semiconductor sales data for October 2002, indicating that total Semiconductor revenues during the first ten months of 2002 were 3% below the same period in 2001 (ICs were 2% below).  November and December sales numbers are unlikely to change the overall picture.  Thus, the annual final growth rate for 2002 will be in line with Advanced Forecasting’s forecast, published in October 2001, which had projected that IC sales would grow by a negligible amount in 2002. 

Extrapolations of the robustness of demand for semiconductors during 1999 and 2000 into 2001 caused a huge accumulation of over-capacity and inventories.  For example, decision-makers who planned production according to an IC growth forecast of +45% were quite disappointed when 2001 ended with a 33% decline.  Nevertheless, expectations have not materialized that industry forecasters would learn from their experiences of predicting 2001. 

The diversity among forecasts continues to confuse decision-makers.  Industry analysts envisioned annual growth of IC revenues for 2002 ranging from –6% to +20%.  “Actually, quite a few of our users have expressed the need for a comparison of various forecasting sources,” said David F. Crume, AFI’s Director of Sales and Marketing, adding that, “we are now in the final stages of building a database that will assist them with the endless task of gathering and comparing forecasting information.” 

DATABASE METHODOLOGY

AFI has been gathering forecast information from hundreds of articles, press releases, and presentations issued by and about various forecasting sources.  It covers the Semiconductor and Semiconductor Equipment fields, organized by source, date of publication, the forecasted value for each period, and actual market data.  See Example below. 

Though certainly not comprehensive, the resulting comparison will exhibit the level of accuracy and the frequency of modifications by each source.  It also will allow for the assessment of the efficacy of quantitative versus qualitative forecasting methods. 

EXAMPLE

Assuming that 2002 revenues will grow by Zero percent over 2001, some forecasts were pretty accurate, while others missed the boat. All of the following relate to forecasts of semiconductor sales growth during 2002. Exact references are available. 

In August 2001, Dataquest reduced its forecast from +13% to +11.8%, dropping it further to +3% at the end of October 2001.  IC Insight predicted +14% in August 2001.  Cahners In-Stat forecasted in January 2002 a decline of 5.7%.  Semico Research predicted in April 2002 “a healthy 17.5% growth in chip revenues in 2002”.  VLSI Research predicted +19.8% in August 2001. In January 2002, its IC Forecast stood at +20.6%.  AFI, as mentioned above, predicted in its October 2001 issue that IC revenues would barely reach the $12B level at the end of 2002, which translate into an annual growth rate close to zero. 

AVAILABILITY

The comparisons of forecasting sources are scheduled to be available in mid-December 2002.  To receive them, please e-mail your request to comparisons@adv-forecast.com or through AF’s website at http://www.adv-forecast.com. 

AF 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.  Rolling horizons of forecasts extend up to 29 months.  AF is the only forecasting firm that has guaranteed its forecasting services with a full refund period since its inception (1986).  
  

Back to Press Releases

Back to Top