Advanced Forecasting Sees Double-Digit Growth in Semiconductors in 2006

Saratoga, California – September 8, 2005 – Advanced Forecasting’s IC Revenues Cycle Forecast predicts that the next upward turning point in the IC Cycle will take place in the first half of 2006. In addition, it expects double-digit annual growth for 2006 over 2005, as revenue shipments strive to catch up with forecasted demand. The result will be the beginning of the next IC cycle. This prediction is based on the semiconductor-oriented forecasting house’s quantitative model that has never been retroactively modified and which predicted the 1999-2000 boom and the 2001 recession. 

According to Advanced Forecasting, the factors driving the 2006 turning point are the consumption of ICs by communications, consumer electronics, and computer industries. To meet the additional demand for ICs, fab capacity utilization rates will increase. Fab utilization reached 89% in 2Q-05, up from an 86% minimum point in 1Q-05, and as Advanced Forecasting had predicted in advance. Foundries are running now at 83% utilization, significantly lower than their 99% level one year ago, and partially due to the increased foundry capacity of 35% during the last year. The continued utilization increase will drive ASPs upward and improve IC revenues, thus fueling the 2006 upswing. 

“Already IC units have increased 14% since January 2005, from 8.39B to 9.53B, which is a 24% increase from their 7.7B peak in 2000 and an 80% increase from the 5.3 billions minimum point of the 2001 recession. At the same time, IC revenues declined 2.5% since January 2005, forcing overall ASP to decline,” said Rosa Luis, Director of Marketing and Sales for Advanced Forecasting. (For a chart of worldwide IC revenues versus units, e-mail rosal@adv-forecast.com.)  

“The focal point is that IC units are strong and strengthening,” emphasized Luis, based on the month-to-month growth rate which accelerated in July to 4.1%. The first half of 2005 is similar to the equivalent increases during the robust 1999 and 2000 years, (growth of 14% and 16%, respectively).   

Founded in 1987, Advanced Forecasting is a leader in forecasting demand for semiconductors, semiconductor equipment, wafers, and materials industries. The models have remained unchanged since inception, resulting in the industry’s most accurate forecast. Advanced Forecasting 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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