Saratoga, California – March 14, 2005 – It appears the decline in the semiconductor industry that began in the second half of 2004 has possibly come to a halt in January, according to analysis of industry data. “Although it seems that the decline stalled in January, we discourage extrapolating this incident into the future as one month does not make a trend,” warns Rosa Luis, Director of Marketing and Sales at Advanced Forecasting, a quantitative-based semiconductor forecasting house. 

Advanced Forecasting’s analysis of January’s industry data shows a clear stagnation: 

1. IC Revenues – Worldwide IC Revenues in January remained flat to December after declining for one month. December revenues were $15.5B, while January’s were $15.4B, less than a 0.3% change. Typically, January’s sales fall further below December’s, for instance, the average decline in the previous three years has been about 2.5%.   

2. IC Units – The decline in Worldwide IC Unit sales has begun to slow indicating it is approaching a minimum point. January data declined just 0.63% from December after declining between 0.72% and 2.55% each month since August 2004.

3. Average Selling Price (ASP) of ICs – IC ASPs increased slightly in January after a slight decline in December. Historical data shows this is a rare occurrence in that ASPs do not tend to increase once they have begun a decline when above the Experience Curve. Further analysis shows that the slight increase was influenced by Memory ASPs, which increased from $3.39 to $3.41, as Non-Memory ASP remained flat at the $1.57 level. (For a chart showing the current ASP situation and historical pattern, please contact Rosa Luis at rosal@adv-forecast.com.) 

The magnitude and the length of the current decline were anticipated.  At the ISS 2005 conference in January, Advanced Forecasting predicted that the slowdown in the semiconductor industry would be short and mild. Should January’s data be an early indication of a looming recovery, the forecasting firms’ forecast has already come true.

 “We remain optimistic that the current decline will end during the first half of 2005,” said Luis. “However, we stand by our original forecast of a near zero growth rate for the full year.”

 Founded in 1987, Advanced Forecasting is a leader in forecasting demand for semiconductors, semiconductor equipment and materials industries. Its unique features are using pure quantitative input and never retroactively modifying its forecasts. Advanced Forecasting provides the industry’s most accurate forecasts and has acquired a user base of more than 400 companies worldwide. 

Contact:

Rosa Luis

Director of Marketing and Sales

rosal@adv-forecast.com

Phone: 1.408.725.2964

Toll Free: 1.888.658.3227

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