mannerisms

Ruminations on the electronics industry from David Manners, Senior Components Editor on Electronics Weekly.

Can You Trust An SIA Forecast?

Can you trust an SIA forecast? The SIA, naturally, does what its members tell it to do. He who pays the piper calls the tune.

And SIA’s members do not want too high an expectation put by their trade body on market expectations. If members’ own sales don’t meet the SIA forecast, the members will look bad. So the pressure is on for the SIA to forecast low.

 

At the moment the SIA is forecasting a flat year.

 

Forecasts of flat semiconductor market growth in 2012 are “totally and absolutely wrong”, said Malcolm Penn CEO of Future Horizons at IFS2012 in London last week

“It’s not going to be less than 4%,” added Penn, “it’ll be something in the 4-8% region.”

 

Q1 was down 2.3%, said Penn, he reckons Q2 will be between 6.6% and 8.3% growth, and Q3 will be up 10%.

 

In semiconductor forecasting said Penn: “There’s visibility for two quarters at best; the third quarter out is hazy; for the 4th quarter, you haven’t a clue.”

 

Penn pointed out that three of the industry’s four fundamental driving forces are good.

There is no inventory. “The inventory burn is over,” said Penn, “the demand we’re now seeing is real demand. No ones’s got the capacity to build inventory and people are too scared to build inventory.”

 

The second fundamental is fab capacity and there’s no excess capacity at the moment and no likelihood of that changing any time soon.

 

The third fundamental is ASP – pricing – and here the situation is that it’s flat to trending up which is good news in the semiconductor industry where Moore’s Law mandates a halving in price every 18 months.

 

The fourth fundamental is the only negative one and it’s the economy. “Confidence in the advanced economies is at an all-time low,” said Penn, “the politicians and leaders have made a mess and the natural reaction of business leaders is to do nothing. There’s a huge amount of cash out there which companies are sitting on. But when in doubt do nothing.”

Tags: clue, expectation, future horizons, politicians, quarters

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2 Comments

  1. Sanjeev
    July 30, 2012 11:14

    I understand Penn is very optimistic about the semiconductor growth. Couple of months back he was bullish on high rise on Memory Markets. But we know where we are.
    In order to even match the Y-o-Y sales number, June 2012 sales has to be the histroy best month with more than 26.5 Bn of revenue. Most of the chip manufacturers has reported a dull Q2’12. I am sure, we will not able to see a strong Q2’12 numbers.
    The PC markets is not able to sustain momentum and may end-up a flat year by close to 207 Mn shippment. Smartphone/Tablets may be the growth engine but at the same time, Automotive and computer peripheral market will see huge pressure from Volume and revenue pespective.
    Cheers…
    Sanjeev

  2. SecretEuroPatentAgentMan
    July 28, 2012 20:40

    Back in the days when I was working in electronics I read a lot of forecasts from various organisations. I was never comfortable with the lack of transparency in how they drew conclusions from equally opaque data, and I was unimpressed with the results.
    First and foremost of the forecasters I remember is this funny company called Gartner. Let us just say I would be interested to hear the views on all these firms.