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August's 'actual' chip sales were below par

10/5/2010 09:29 AM EDT
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Cowan LRA Model
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re: August's 'actual' chip sales were below par
Cowan LRA Model   10/5/2010 6:40:13 PM
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Hi The-Floating-Gate. Thanks for your comment / question and your pointer to the Solid State Technology website article by James Montgomery entitled "SIA: August IC growth mixed, forecasts still in line." The model I employ is a "tops down" approach "operating" on the TOTAL global (actual monthly S/C sales over the past 26 years, namely, from 1984 through 2009) as tracked and published by the WSTS. I do not look at the "bottoms up" numbers, that is by sector. If you would like more info re. my modelling approach (that is Linear Regression Analysis) please send me an e-mail (@ mikedcowan(at)verizon.net) and I will provide you a tutorial on my approach. Additionally, the model is strictly a mathematical approach without any emotional considerations nor the use of historical averages. Therefore the memory component is "baked into" the numbers captured in Peter's article. Regards, Mike Cowan

the_floating_ gate
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re: August's 'actual' chip sales were below par
the_floating_ gate   10/5/2010 5:05:55 PM
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Hi Mike do you think the drop in memory pricing has been baked in into your model? It looks like the pace of DRAM price decline is slowing. Although we are close towards the end of the year there is quite a bit difference. The reduction you made seems to be very minor - you are still at the high end (VLSI I believe is at 33.7% and I supply at 32%) Take a look at this one (picked up @ Solid State web site) Pitzer, though, suggests if the rest of the year follows historical trends, then revenues would pull in at about 26.6% growth, below current estimates from both the SIA (28.4%) and Wall Street analysts (28.7%). Those historical seasonality trends would peg September IC (ex-memory) sales at ~24% and 3Q sales at ~10%. "While bears continue to be concerned that semis have outgrown end demand on a q/q basis over the past several quarters, we would highlight that IC unit shipments (ex-memory) remain 2.8% below long-term shipment trends and historically we have not seen SOX correction until IC unit shipments exceed trend," he writes in a research note.

Cowan LRA Model
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re: August's 'actual' chip sales were below par
Cowan LRA Model   10/5/2010 10:46:40 AM
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Whoops - 34.6 percent (at end of my above comment) should be 34.9%. Sorry. Mike C.

Cowan LRA Model
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re: August's 'actual' chip sales were below par
Cowan LRA Model   10/5/2010 10:33:16 AM
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Hi Peter - 2010's YTD (Year-To-Date) 'actual' sales (cumulative sales through Aug) came in at $194.575 billion compared to 2009's YTD 'actual' sales of $134.704 billion. This yields a yr-o-yr YTD sales growth of 44.4 percent so far for 2010. Assuming that the Cowan LRA Model's full year projected 2010 sales growth forecast estimate of 34.9 percent "plays out," implies that over the next four months the 2010 sales growth percentage will drop by 9.5 percentage points, that is from 44.4 percent to 34.6 percent. Mike Cowan, independent S/C industry analyst (and developer of the Cowan LRA forecasting model)

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