Is the End of the Party Looming for the Semiconductor Industry? Will You Be Ready?

 

Saratoga, California – May 22, 2006 – There is no doubt the semiconductor industry and related markets are currently booming, but is it close to an end? Industry statistics are currently at levels that preceded recessions in previous cycles prompting the question “when will it end?” Worldwide IC revenues have reached $16.7B/month in March, increasing 92% since the bottom of the previous recession in 2001, as compared to 2000’s peak of $16.1B/month, a 94% growth since its bottom in 1998. That peak was followed by a 46% decline. In addition, the peak in 1995 of $11.7B/month, a 207% increase from its 1992 bottom, was followed by a 26% decline.

“We’re concerned with the future state of the industry as we’re now starting to see an accumulation of indicators that in previous cycles lead to an over-heated situation and were followed by steep corrections,” said Rosa Luis, Director of Marketing and Sales for Advanced Forecasting, a quantitative forecasting company. “Indicators include capacity constraints causing shortages, lead times lengthening [Vishay], companies placing their customers on allocation [TSMC], the announcement of major capacity investments, and strong increases of bookings of semiconductor equipment.”

 

The euphoric feeling that engulfs an industry during a boom can overshadow the ability to understand and appropriately react to a change in direction. “Since your clients are likely to unintentionally mislead you at the next peak, management must employ information and analyses that are independent of their customers to reduce the risk of mistaking the next peak as just a temporary blip,” said Moshe Handelsman, President of Advanced Forecasting, suggesting that “While industry players are much more vigilant today than in past cycles, failure to identify the next peak and act on it on time can be extremely detrimental to the bottom line.” He suggests that analysis of one’s own company data and the information inherent in it often provides earlier warnings of impending trouble. For optimal results, Dr. Handelsman teaches how the analysis should be correlated with product specific and industry-wide forecasts.

 

During its annual forecast seminar, held during the week of Semicon West 2006 in July, Advanced Forecasting will train participants how to analyze and identify warning signs in their own data and better predict that data’s future turning points. Forecasts for IC revenues and units, semiconductor equipment, materials and equipment-components, and wafers will be disclosed. For information on this seminar please visit: http://www.adv-forecast.com/Forecast%20Seminar.htm. Early Bird registration ends June 16, 2006.

 

 

 

Founded in 1987, Advanced Forecasting is a leader in forecasting demand for semiconductors, semiconductor equipment by segment, and materials industries. Its unique features are using purely 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

Advanced Forecasting

rosal@adv-forecast.com

Toll Free: 1.888.658.3227

  

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