Tuesday, December 6, 2011

Update to Cowan LRA model’s global semicon forecast numbers 2011/2012

This is a continuation of my coverage of the fortunes of the global semiconductor industry. I would like to acknowledge and thank Mike Cowan, an independent semiconductor analyst and developer of the Cowan LRA model, who has provided me the latest numbers.

The WSTS posted the October 2011 HBR on Saturday, Dec 3rd, 2011. Consequently, based upon the latest sales numbers availability (through Oct 2011), Cowan has generated updated sales and sales growth forecast numbers for 2011 and 2012 as summarized in the table here:Sources: WSTS & Cowan LRA Forecasting Model (Dec. 2011).

Major high level result: The forecasted sales and sales growth expectations for both 2011 and 2012 have continued to systematically decrease over the past seven month’s predictions put forth by the Cowan LRA forecast model as highlighted in the table below:Source: Monthly Cowan LRA Forecasting Model.

The following table, given below, summarizes/compares the recent (last two) forecast pronouncements by the indicated forecasters.Source: Cowan LRA model, USA.

Based on Oct. 2011’s global semiconductor sales, as reported by the WSTS on 12-03-11:
* The latest Cowan LRA forecasting model’s 2011 sales growth forecast estimate came in at (plus) 2.1 percent based upon a sales forecast estimate of $304.7 billion.
* This latest (as of Dec.) sales growth estimate for 2011 is down by 0.9 percent points compared to November’s (last month) sales growth forecast estimate of 3 percent.
* Remember, however, that the model is strictly mathematical in that it exploits linear regression analysis operating on historical (1984 to 2010,) “actual” monthly sales numbers (appropriately transformed) as gathered and published by the WSTS. Thus it:
i) Does not reflect any modeling features or adjustments that would capture any consequences of a sales impact due, e.g., to March’s catastrophic earthquake and subsequent tsunami that took place in Japan.
ii) Relies only on the past sales experience of the industry as “imbedded” in actual monthly sales numbers for the last 27 years (via “appropriate” transformation of sales data thereby rendering it highly linear and thus very amenable to LRA).
* Therefore, the impact of the Japan catastrophe on 2011 sales is ”seen” as the year’s month-by-month sales numbers ”played out” over the past five months.
* Over this time period one can “watch” the monthly output of the model’s forecast results in order to track the month-to-month changes in the forecast numbers as a relative indication of any impacts.

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