SEVENOAKS, England -- While several market research firms have revised their forecasts for 2003 chip market growth downwards over the last few months to land in the low- to mid-teens of percent, Future Horizons is sticking with its figure for 2003 of 18 percent, announced in January (see January 29 story).
Groups such as the Semiconductor Industry Association, which moved its forecast from 20 percent to between 10 percent and 15 percent earlier this week (see April 28 story), have left Future Horizon's forecast at the bullish end of the spectrum.
"We're not going to reduce our estimate because the first quarter came in exactly as we predicted, three percent down on the fourth quarter of 2002. We always said this year would be second-half loaded and to be honest it's too early to call," said Malcolm Penn, chairman and chief executive officer of Future Horizons.
Penn said he had been considering whether he should change the forecast ahead of the firm's annual executive forum that is due to take place at Vilmoura, Portugal early in May but that he saw no reason to change the forecast. Indeed poor visibility is one of the characteristics of the market in these uncertain times, Penn said.
But Penn denied that there is a lack of fundamental demand for equipment; something that some brokerage analysts have argued recently. "The whole market, multiple sectors, is recovering in sync. Lap-top computers are selling; digital consumer is very hot; mobile phones are selling," said Penn.
"Where there is no visibility is exactly when the 'hockey-stick' takes off," Penn said referring to a sudden acceleration in growth that is observed in positive feedback systems and often characterizes recovering markets.
"All of the trends are positive. Industrial production is moving up with 2 percent quarterly growth in all regions. Unit sales have been growing for some time and now ASPs are trending upwards because higher complexity chips are coming into the mix," he said.
However, Penn indicated that Future Horizons' decision to stick with 18 percent growth could be a decision deferred rather than a decision cancelled. "There's no upside in that 18 percent, but we think it is reachable," Penn said.