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TSMC sees signs of market turning up
Peter Clarke
11/7/2011 9:42 AM EST
LONDON – Although foundry Taiwan Semiconductor Manufacturing Co. Ltd. suffered a third quarter that was down sequentially against its second quarter, the company is starting to see signs of a turn in the market, according to its leading European executive.
This is partly because concerns about the global economic situation during 2011 has caused electronic equipment and chip companies to strive to burn off inventory, and that process has now reached close to a minimum, according to Maria Marced, European president of TSMC.
Marced said she expects TSMC to demonstrate an improving gross margin in the fourth quarter and to come out of 2011 with revenues up 9 percent on what the company achieved in 2010. This growth would be against the back drop of a global semiconductor industry that TSMC's expects to grow 1 percent versus 2010. The TSMC estimate is in line with EE Times' forecast of market growth of between 0 and 2 percent (see Analysis: Strong September boosts 2011 chip forecast).
However, globally uncertainties, not least the European debt crisis, are set to continue into 2012 and are likely to continue to suppress spending in a number of electronics sectors. Marced said that TSMC therefore has made an estimate of a 3 to 5 percent global annual chip market growth in 2012.
"The macro-economics are not good. But the cloud, mobile internet and internet-of-things are stimulating our industry," Marced told EE Times. "45 days of inventory is significantly low. Distributors are now starting to rebuild inventory. We are starting to see rush orders for December," said Marced.
Marced said the supply chain pipeline is so empty the market can only turn in one direction, stimulated by resilient demand in sectors related to mobile and internet applications.
Related links and articles:
Analyst calls 'bottom' of IC downturn
TSMC: 28-nm tech, demand 'on plan'
Top 20 chip firms set to outgrow market
Email to the editor: Chip industry shambles
Analysis: Strong September boosts 2011 chip forecast
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Cowan LRA Model
11/7/2011 12:18 PM EST
Peter - the just updated Cowan LRA Model run which is based upon September's (actual) global semiconductor sales of $29.442 billion yielded a sales forecast estimate of $307.258 billion. This latest result corresponds to a 2011 sales growth expectation of 3.0 percent which is down from last month's forecast prediction of 3.9 percent even though September's actual sales number was a 5-week month all-time record high value. Interested readers can send an e-mail to mikedcowan@verizon.net requesting the details of the latest model run numbers.
Mike C. (independent semi industry analyst and developer of the Cowan LRA forecast model)
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btarng
11/7/2011 9:04 PM EST
I love how Mr. Cowan's estimate includes six significant digits -- as if one could accurately predict the annual sales of any single company down to a million dollars, much less the revenues of the entire semiconductor industry. Why don't you include the dollars and cents also? I'm sure the mathematical model spits those out as well.
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Cowan LRA Model
11/7/2011 11:50 PM EST
btarng - you are obviously unaware that the WSTS, in its monthly reporting of global semi sales, employs six (that is, 6) significant digits beyond the decimal point! This can be seen if you were to look at the HBR (Historical Billings Report), namely its Blue Book, that the WSTS posts on its website each month and ia available for all to see!
Oh by the way, if you were to carefully look at many semiconductor companies quarterly financial statements you would also see that they report three significant digits beyond the decimal point. Consequently, I likewise report my forecast estimates in the same format, that is, three digits past the decimal point.
Therefore, I have to infer that you are being very devious,for whatever purpose, in your comment.
Mike C.
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peter.clarke
11/7/2011 1:58 PM EST
Thanks Mike
You are on the bullish side of most with that 3 percent growth forecast but you may yet be proved right if some restocking goes on in 4Q11. On the other hand, here in Europe the macro-economic outlook is not good. :/
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Cowan LRA Model
11/7/2011 2:26 PM EST
Peter, remember - the model is strictly a pure mathematically based assessment relying on linear regression analysis operating on the past 27 plus years of historical global semi sales as gathered, tracked and reported by the WSTS. Therefore, the model is devoid of any economic assumptions or biases and thus abstracts its quarterly and yearly sales forecast predictions from the industry's historical experience as embedded in the monthly actual global sales numbers covering the past 27 plus years, that is, from 1984 through 2011 YTD.
Mike C.
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agk
11/8/2011 2:52 AM EST
Time fortune wheel of mobile and internet applications are revolving up for good ,planned and quality works.
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ughhhh
11/11/2011 2:49 PM EST
Mike C, if everyone reports many decimals does that make it more accurate?
I would already be pleased if the estimate turns out to be 5% accurate.
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Cowan LRA Model
11/12/2011 6:31 PM EST
ughhhh - you mis-understood my comment!!!!
Check out the WSTS website to see what they are all about - namely the role that they play in gathering and reporting worldwide semiconductor sales. It is this data that my model employs in order to generate my monthly forecast estimate updates. Obviously I believe it follows (logically) that the higher the accuracy of the source data (global semi sales as published by the WSTS each month) the potentially higher precision that can accrue in the forecast numbers. If three significant digits PAST the decimal point disturbs you than only use the first three significant digits of my forecast estimate numbers that I provide. If you would like more info re. the Cowan LRA forecast model than please send an e-mail to mikedcowan@verizon.net and I will send you a presentation that gives more insight into the forecast methodology that I employ.
Mike C.
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