SOURCE: Advanced Forecasting

November 28, 2005 08:00 ET

Forecaster to Clarify Double-Digit Semiconductor Forecast for 2006 as Some Capacity Utilization Surpasses 97%

SARATOGA, CA -- (MARKET WIRE) -- November 28, 2005 -- Advanced Forecasting will finalize its forecast of semiconductors' 2006 growth rate in its monthly report to be published on Friday, December 9, 2005. Previously, the quantitative forecasting firm announced its double-digit growth prediction for IC Revenues Worldwide, leaving open the question as to whether that growth would be close to 10% or substantially higher.

Forecasting 2006 has been a daunting task due to the volatile nature of the semiconductor industry. The added negative opinions of industry leaders resulting from the softness that began in mid 2004, in spite of hopes for a sustained recovery, increase the level of uncertainty. "Although we are now half a decade after the 2001 recession, industry players are still influenced by the memory of it, erring on the safe side," said Rosa Luis, Director of Marketing and Sales for Advanced Forecasting. "However, the growth in IC units has been robust, increasing 97% since the minimum point at the end of 2001, as well as wafer sales growing 122% in the same time period. IC Revenues have been less robust, but are still 90% higher. This strength warrants minimizing the weight assigned to the 2001 recession."

Advanced Forecasting has yet to reconfirm double-digit growth for IC Unit sales in 2006, which may continue on a similar steep slope as in 2005. From January 2005 to September, IC Units increased 23.6%, from $8.4B/month to $10.4B/month, and are currently 34.4% above 2000's peak. Unit strength has contributed to the latest increase in capacity utilization, e.g., 97.2% for the < 0.12 micron line-width in Q3-05. Such high rates may trigger over-heating leading to a build up of capacity due to miscalculating the true demand. Adding to the vagueness is another factor that may ultimately force the industry into a situation of over-capacity -- the ongoing transition from 200mm to 300mm wafers which carries an unknown amount of hidden capacity (depending on yield).

The Average Selling Price (ASP) of ICs is also at a possible turning point. Following an almost continuous drop from a $1.85 peak in January 2005, it bottomed out in August at $1.58 and again grew in September. The current uncertainty is whether it will continue a robust climb or resume declining as it did during the 2001 recession. Advanced Forecasting's analysis of the factors impacting the ASP concludes that a pessimistic approach is unwarranted.

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