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Rich Krajewski
Linear regression sounds so neat, and yet it's so useless for anything other ...
ylshih
July actuals stronger than expected, but Intel now expects Q3 to be lower. Is ...
July 'actual' chip sales are above trend
Peter Clarke
9/2/2010 6:02 AM EDT
LONDON — The "actual" global market for chips in July, as calculated by the World Semiconductor Trade Statistics organization, was $24.57 billion, up 28 percent from the same month a year before and down 9.5 percent from June 2010 sales of $27.15 billion.
A sequential fall in chip sales in July is normal and the fall in July 2010 was less than the average over the previous decade, which has, on average, shown a sequential drop of 17.7 percent. The better-than-trend July partly compensates for below long-term average June sales that were up sequentially by 13.1 percent. The previous decade's average has seen June sales climb sequentially by 22.8 percent.
Analyst Mike Cowan's linear regression analysis model recognized the better-than-average July sales and estimate numbers for 3Q, 4Q and 2010 "kicked up" slightly from his previous month's forecast estimates.
Cowan now sees 2010 global chips sales coming in at $305.729 billion corresponding to a projected 2010 year-over-year sales growth forecast estimate of 35.1 percent. Cowan now sees Q3 sales at $81.471 billion, up sequentially by 8.9 percent and Q4 sales of $79.611 billion, down sequentially by 2.3 percent. This would put Q3 ahead of the decade-average sequential growth of 8.1 percent and Q4 below the decade-average of a 0.6 percent drop in sales.
Whereas throughout the first half of 2010 most analysts were repeatedly surprised by the strength of the chip market in July many called the figures about right.
Related links and articles:
Averaged July chip sales stay strong amid slowdown signs
Analysts lag 'actual' chip market growth
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Warren
9/2/2010 3:56 PM EDT
This article points out that "many analysts were surprised by the strength of the chip market" and this would seem to include Mike Cowan himself. In an EE Times article in March ("LRA model predicts 40% chip market growth for 2010") Cowan emphatically cautions against relying too heavily on his model for 2010 predictions, suggesting it was too optimistic... and it was, but not by all that much. From the quick scan I gave that article and this one the newest projections seem substantially nearer the model's January predictions than the human modifiers provided months later. Interesting.
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Warren
9/2/2010 6:04 PM EDT
I just noticed that Mike Cowan himself had left a comment in/with the March artcle where he pointed out the sales values/estimates shown in the article were incorrect (and low by pretty big percentages). His comments showed his human adjusted values to not be too far off of the adjusted values here (and slightly on the optimistic side).
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Cowan LRA Model
9/3/2010 6:07 PM EDT
Hi Warren - if you are interested in a response to your comment please send me an e-mail at mikedcowan(at)verizon.com and I will not only provide a response but also send you more info on the forecasting model along with details of the latest forecast numbers that Peter invoked in his article.
Mike Cowan, independent S/C industry analyst and developer of thde Cowan LRA Model for forecasting global S/C sales.
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Cowan LRA Model
9/4/2010 1:30 PM EDT
Hi Warren - corrected e-mail address.
mikedcowan@verizon.net (NOT .com!)
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Robotics Developer
9/3/2010 4:31 PM EDT
I had been seeing other reports regarding chip sales being down or slowed down but was skeptical. In ordering for short manufacturing runs I continue to run into parts shortages and increasing lead times. This experience seems to be confirmed by the uptick in July numbers. In the end, what matters to me is: "How long are the lead times for my critical parts?". If there is any upturn in the consumer confidence I would expect a significant demand for all those new gadgets they have been putting off buying.
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yalanand
9/4/2010 7:03 AM EDT
Why is the chip sales so strong. What is driving it smartphones ?
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ylshih
9/4/2010 7:49 PM EDT
July actuals stronger than expected, but Intel now expects Q3 to be lower. Is Intel being too conservative or is their a divergence between PCs and the overall semi industry?
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Rich Krajewski
9/4/2010 9:21 PM EDT
Linear regression sounds so neat, and yet it's so useless for anything other than the simplest forecasts. But it's easy to do and easy to understand, kind of like looking for your lost dime only where the light is brightest.
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