Saratoga, CA – July 6, 2004 – Based on its forecasts and recently published industry sales data, Advanced Forecasting concludes that the announcements made last year that the growth of the Semiconductor Industry will fade to 4% - 8% was a bit premature.  

Contrary to comments made in January 2003 predicting its doom, the long-term growth rate for the semiconductor industry has not undergone a significant structural change in the last few years, according to Advanced Forecasting, a semiconductor forecasting house. Using a twelve-year moving average of annual growth rates for IC revenues worldwide, the historical average has already been declining slowly since 1997, hovering in the 15% to 19% range until 2000.  While the 2001 recession caused the average to drop to 12%, it has been recovering ever since and is projected to reach 14% in 2004.  

“The semiconductor industry is a maturing industry and we should expect that its average annual growth rate will trend in a downward direction, but the decline will be very gradual, not a step function as industry pundits have indicated,” said Rosa Luis, Director of Marketing and Sales for Advanced Forecasting. “Other forecasters have claimed that the industry would experience a dramatic change from the historical growth rate, but our research shown that no significant change has occurred.” 

“Those pessimistic forecasts, given while the industry was already recovering from the 2001 recession, proclaimed that the average annual growth would decline to between 4% and 8% going forward,” added Luis. “While the recession skewed the annual averages downward it did not have a long lasting impact, as demonstrated by the increasing annual averages since 2003.” 

“Extrapolations based on the depressed state-of-mind during and following the 2001 recession created the impression that the semiconductor industry would cease to show future growth potential,” stated Dr. Moshe Handelsman, Founder of Advanced Forecasting, adding that “on the other hand, quantitative forecasting models, that are inherently unbiased, contradicted that conclusion. In October 2002, our message was: ‘Our quantitative model predicts a strong upturn beginning mid 2003, as it did in ‘86 and ’91 when it announced the robust increases in ’87 and ’92.  The background information now and in those periods were similar – doom and gloom’.” 

Advanced Forecasting’s analysis of the average annual growth rate was conducted using historical data dating back to 1986. An estimated growth rate of 33% for 2004 was used to complete the analysis. While other forecasting institutions are now increasing their annual growth rate predictions for 2004 past the 30% mark, Advanced Forecasting announced over six months ago that 2004 ICs Revenues would increase more than 30% over 2003.  

NOTE: A chart depicting the growth rate analysis is available upon request.  

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 eighteen years, a user base of more than 400 companies worldwide.

Contact:

Rosa Luis
Director of Marketing and Sales
Advanced Forecasting
rosal@adv-forecast.com
Phone: 1.408.725.2964

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