SAN FRANCISCO--A major industry analyst firm sounded alarm on global
IC sales Friday (Dec. 14), citing falling fourth quarter revenue for
chip vendors, relentless price pressure and stubbornly high
"Fears abound that industry revenue could decline even more than
currently predicted in the fourth quarter, if economic conditions do
not improve," IHS said in its regular Semiconductor Manufacturing
& Supply Market Tracker Report.
"The complete reversal in growth is indicative of how distressing
conditions have become for the industry, and the downward pressure
on sales has not eased," IHS said.
Q4 semiconductor revenue is forecast to fall by 0.7 percent compared
to the third, which will pull 2012 overall performance down farther
to a projected annual decline of 2.3 percent to $310 billion. The
semiconductor industry in 2011 rose 1.3 percent by contrast.
“The global economy continues to be the most critical variable
affecting the semiconductor space both this year and the next,
especially because the chip industry is highly dependent on consumer
spending,” said Len Jelinek, director and chief analyst of
semiconductor manufacturing at IHS. “And until consumers believe
their financial position is stable or improving, consumer spending
will likely remain soft.”
IHS said December will be lackluster months as anticipated holiday
system sales have already been made. In the near term, no major
IC-sales drivers are evident, IHS added.
The IHS also report emphasized its concern over high inventory
"Given the excess inventory, end-equipment manufacturers have been
delaying the placement of orders for additional components. The
result on the whole is that chip suppliers aren’t running their
manufacturing operations optimally, and also are manufacturing
products solely based on historical demand," IHS said.
The report did offer a ray hope among what it termed a "fragile
growth scenario." Supply and demand should even out in the first
quarter of 2013, and silicon shipments are forecast to rise near the
end of that period, IHS said.
In this single Intel notebook example across three process nodes.
iCore 7/5/3 total quad & duals production:
Arrandale 188,630,122 units
Sandy Bridge 156,025,668 units
Ivy Bridge 138,566,718 units
Peter - WHOOPs. The 4Q/3Q sequential sales should be PLUS 1.6 percent, that is, a sequential INCREASE, NOT minus as stated above.
Therefore, the latest Cowan LRA Model run for 4Q/3Q's sequential sales growth forecast estimate is, in fact, more "bullish" than iSuppli's prediction of plus 0.7 percent sequential sales growth and slightly more positive than your stated last 10-year average of 1.4 percent. Sorry. Mike C.
Hi Brian - the latest run of the Cowan LRA forecasting model incorporating the WSTS's October actual sales number of $24.873 billion yielded an updated 2012 sales growth expectation of minus 2.3 percent which is in excellent agreement with IHS-iSuppli's latest 2012 yr-o-yr sales growth update of minus 2.3 percent. The model's 2012 sales forecast estimate came in at $292.758 billion compared to the WSTS's 2011 reported sales of $299.521 billion. Remember that IHS-iSuppli's global semiconductor sales tracking process is different than the WSTS's and this accounts for their higher prediction for 2012 of $310 billion. Also note that the latest WSTS sales and sales growth forecast expectations (per the WSTS's recently published 2012 Autumn forecast update) are $289.936 billion and minus 3.2 percent, respectively.
Hi Peter - the latest Cowan LRA Model's expectation for 4Q/3Q sequential sales growth (as calculated from the WSTS's recently posted October actual sales of $24.873 billion) is minus 1.6 percent which is slightly more negative than your calculated last 10-year historical average of minus 1.4 percent.
I would point that a sequential fall of about 1.0 percent for Q4 in comparison is normal for the semiconductor industry.
I make the average of Q4/Q3 fall over the last 10 years 1.4 percent, according to WSTS data, so a sequential fall of only 0.7 percent in better than average.
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