SOURCE: Advanced Forecasting

August 01, 2005 08:00 ET

Semiconductor Forecaster Makes Public Its Prediction for 2006 Turning Point

SARATOGA, CA -- (MARKET WIRE) -- August 1, 2005 -- An upward turning-point in the IC Cycle will occur in the first quarter of 2006, claims Advanced Forecasting, a semiconductor-oriented forecasting house. This prediction is based on the same quantitative model that has accurately called each of the IC Cycle turning points since 1986, including the 2001 recession.

The forecasted change in direction is welcome news for those continuing to suffer from flat to negative growth since the second half of last year. Worldwide IC revenues have continued a zigzag growth-decline pattern ( following a peak in November 2004. According to the Semiconductor Industry Association (SIA) worldwide IC shipments for June 2005 were $17.2B, decreasing 0.5%(*) over May 2005 but increasing 1.5%(*) over June of last year (*calculated on a 3-month moving average). Revenues for the first six months of 2005 were 7.5% over the same period in 2004. In addition, worldwide IC Units in June 2005 increased 2.8%(*) sequentially and 1.0%(*) year-over-year.

"Our quantitative model predicted the 2006 turning-point in late 2004, after predicting that 2005 would be a nearly horizontal year," said Rosa Luis, Director of Marketing and Sales for Advanced Forecasting. "The forecasted Underlying Demand in 2006 will be much stronger than that of IC revenues, causing a turning-point to occur in order for the two to converge." Underlying Demand, as calculated by Advanced Forecasting's models, is the primary influence on the behavior of IC shipments as they tend to oscillate around Underlying Demand.

"The IC Revenues Cycle Forecast foretold in November 2004 that the upturn would take place in 2006, and we are only now beginning to see positive signs in the industry that usually precede an upturn," continued Luis. "For example, wafer shipments are increasing, fab utilization improves as predicted (, and semiconductor equipment bookings have slowly begun to gain strength."

"Although semiconductors performed well in 1H-05, it would be dangerous to simply extrapolate it into 2H-05," cautioned Dr. Moshe Handelsman, founder of Advanced Forecasting, adding that "any attempt to predict the present boom/bust cycle is likely to be inaccurate if it relies on extrapolations. A better way is through quantitative models which use hard numbers as input and thus are unbiased."

Founded in 1987, Advanced Forecasting is a leader in forecasting demand for semiconductors, semiconductor equipment, 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 Information

  • Contact:
    Rosa Luis
    Director of Marketing and Sales
    Advanced Forecasting
    Email Contact
    Toll Free: 1.888.658.3227