Q3 bottom to slump appears to be wishful thinking, says researcher
Semiconductor Business News
(08/20/01 08:51 a.m. EST)
CUPERTINO, Calif. -- Tossing a bucket of numbers on hopes for a recovery in chip sales, Advanced Forecasting Inc. here today said its market models do not yet show any signs of improvements in semiconductor revenues despite encouraging remarks from some of the industry's largest players.
The research firm said it believes the industry has not approached the bottom of the current semiconductor recession and recent data from June does not suggest a trough is not likely in the third quarter. Advanced Forecasting added that it "not encouraged by the downward direction" of its IC Recovery Index. "The decline in actual sales of ICs and semiconductor production systems support this outlook," said the Cupertino firm.
In addition, Advanced Forecasting said recent suggestions about the potential for sequential growth in business--including statements from officials at Inte Corp. and Applied Materials Inc.--are based on "vague signals" in weak markets. Advanced Forecasting has long claimed to have quantitative based models that have accurately predicted inflection points in up and down semiconductor business cycles.
"Unfortunately, as with actual IC revenue, our IC Recovery Index continues its downward trend without any signs of the model slowing its descent," said David Crume, director of marketing and sales at Advanced Forecasting. "As we had expected, the month of May did not represent a minimum for IC sales."
Advanced Forecasting said it is not expecting to see a clear bottom for June when industry data is available for actual chip shipments in July. The research firm cites a rapid decline in its IC Recovery Index and continued weak demand for devices in key applications.
"Actually, the IC industry broke a record in June," Crume said. "The rate of decline in June of IC revenues reached 32.3% below their level a year earlier, surpassing the record of 1985, 30.9%." Advanced Forecasting calculates the rate of decline on a 3-month moving average, year over year.
The Semiconductor Industry Association recently reported that June's worldwide IC sales--$11.6 billion--were 8.8% below May. Advanced Forecasting noted that seasonally adjusted monthly shipments showed a gain in shipments in June, but it was not impressed. "Seasonally adjusted numbers can be misleading during a year of recession with eight months of declining sales," Crume said. |
