Saratoga, California, April 12, 2004 - The growth in Worldwide IC Revenues is being driven primarily by increased demand for IC Units as opposed to rising ASP, a positive sign indicating this boom isn't over yet, says Advanced Forecasting, a quantitative semiconductor forecasting house. Both worldwide units and worldwide revenues have shared a similar growth rate, about 15%, (calculated using a 12 month moving average) for the last seven months after nearly a year of lagging revenue growth, as the industry was recovering from the 2001 recession.

Note: A graph depicting analyses in this article is available upon request.
IC Shipments - Percent Change

"Today's situation differs from that of 2000, just prior to the 2001 recession, in that growth in worldwide IC revenues was strongly associated with increasing ASP," said Rosa Luis, Director of Marketing and Sales for Advanced Forecasting. "There is currently more readily available capacity to satisfy the demand for ICs, so double-bookings of chips hasn't become as exaggerated as it was in 2000."

During the 2000 peak, IC Units' growth rate was significantly lower than that of IC Revenues (30% versus 40%, respectively); therefore the high growth of revenues was mainly driven by increasing ASP. Capacity available to satisfy demand was in short supply, subsequently raising prices and the tendency to double- and triple-book orders. "Rising ASP has not yet become a factor in the current boom, primarily because unit demand is still being met," said Luis. "However, as lead times extend and capacity utilization reaches rates close to 100%, we'll again see the exuberant behavior of 2000 returning along with inflated prices. It is a detrimental process, triggering the next recession."

Advanced Forecasting predicts that growth of worldwide IC revenues will be more than 30% for 2004 and stronger than 50% for the semiconductor equipment market.

Founded in 1987, Advanced Forecasting is a leader in forecasting demand for semiconductors, semiconductor equipment and materials industries. Advanced Forecasting uses a purely quantitative forecasting model, a unique and highly sought-after viewpoint that is never modified retroactively, thus appealing to high-level executives and industry leaders. It provides the industry's most accurate market forecasts and has acquired, in its seventeen years, a user base of more than 400 companies worldwide.

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