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.
According to the WSTS’s July (posted Sept. 8th, 2012) actual global semiconductor sales of $23.977 billion, the latest monthly forecast expectation for 2012’s total global semiconductor sales came in at $298 billion as calculated by the Cowan LRA forecasting model.
This latest update to the 2012 sales forecast corresponds to a year-over-year sales growth expectation of minus 0.5 percent, which improved slightly from the previous month’s year-over-year sales growth forecast estimate of minus 0.85 percent. It is also lower than the joint WSTS/SIA Spring 2012 sales growth forecast of 0.45 percent, which corresponds to a global sales forecast estimate of $300.9 billion. Therefore, the model’s latest monthly forecast output (based on the just announced July 2012’s actual sales) continues to indicate negative sales growth for 2012 compared to 2011 for the second month in a row.
The model’s previous month’s forecast expectation for July’s actual sales was $23.16 billion as shown in the first table. This forecasted sales number (generated last month) was lower than the actual July published sales of $23.98 billion (larger by $0.82 billion or up 3.5 percent).
This results in an M.I. (Momentum Indicator) of plus 3.5 implying that the sales growth trend will be “marginally” up (that is, slightly less negative) over the near term forecast horizon.
Inserting July’s just published actual sales number into the Cowan LRA forecasting model also produces the latest updated sales and sales growth forecast expectations for the remaining two quarters of 2012 as well as the first two quarters of 2013.
These results are summarized in the first table. Also provided in the table are the previous month’s sales and sales growth forecast numbers, which were derived last month, thereby providing sequential monthly forecast estimate comparisons.As displayed in the first table, the latest projected full year 2012 global semiconductor sales forecast estimate increased to $298 billion from last month’s sales forecast expectation of $297 billion – an increase of $1 billion. Correspondingly, the updated 2012 sales growth forecast estimate improved to minus 0.5 percent from last month’s sales growth forecast estimate of minus 0.85 percent – a decrease of 0.35 percentage points, but still residing in negative territory.
Also note that August’s actual sales forecast estimate is projected to come in at $24.78 billion. Consequently, the resulting August’s actual sales forecast estimate equates to an August 3MMA sales expectation of $25 billion, which is up from July’s 3MMA sales result of $24.4 billion. It should be highlighted that this forecasted August 3MMA sales number assumes no (or very minimal) sales revisions to either June or July’s just published sales results by the WSTS.
Additionally, year-to-date cumulative sales for 2012 (total yearly sales through July) came in at $166.8 billion compared to last year’s year-to-date cumulative sales number of $174.1 billion. This equates to a 2012 year-to-date (through July) sales growth result of minus 4.2 percent.
This implies that global semiconductor sales for the second half of 2012 must demonstrate some significant strength to reach last year’s sales number of $299.52 billion in order that the full year’s 2012 sales growth will break even with last year’s sales – let alone show a mildly positive sales growth for the year.
To be more precise the latest Cowan LRA model’s sales forecast expectation for the second half of 2012 is predicted to come in at $155.2 billion which would correspond to a first half to second half sequential sales growth (1H => 2H) forecast estimate of 8.6 percent. Therefore, the second half global semiconductor revenue would need to grow sequentially by at least 9 percent in order to assure a positive sales growth for 2012 relative to 2011.
This by-month evolution for sales and sales growth forecast results for each one of the first seven months of this year are illustrated in table 2 and represent a unique feature of the Cowan LRA Model’s forecasting methodology, namely the updating of the forecast results each month immediately following the WSTS’s monthly release of its latest global semiconductor sales.