Hi Bruce (and Peter) - contrary to your belief on the difficulty in making sense of the various sales growth expectations I "put out," I feel that the model I have developed is, in fact, straight forward and provides each month a good proxy of what the sales growth might be each month as the year plays out. I should point out that Linear Regression Analysis that the model employs operating on historical monthly sales history of the industry tracked and published by the WSTS going back over the past 28 years is pretty rigorous on a relative basis. Since the model is purely mathematical no assumptions and/or emotion are invoked in arriving at the forecast results.
Bruce - for more details on the "workings" of the forecasting approach please provide me your e-mail address (@ mikedcowan(at)verizon(dot)net and I will send you my monthly report with all the details re. the model's approach and latest results.
I agree with you, predicting the future of the semi industry is complex and chaotic. The graph showing the retreat of the forecasters from rosy 2012 predictions is stunning. However, if you looked at the North American Semi Equip Book to Bill and global semi sales in May of 2012 it was obvious we were pointed in the wrong direction, yet there was a lag before the models responded. I know these are old school benchmarks and everyone is trying to anticipate the turning points. I am curious what general trend Objective Analysis uses to "be right".
Nice spot Mike
Of course, the article serves Objective Analysis well. Why else would Jim Handy contribute it?
But it does show how analysts struggle with the complex, chaotic nature of forecasting markets.
Kris - check out the graphic put together by Jim Handy at the following URL = http://www.forbes.com/sites/jimhandy/2012/12/28/a-review-of-semiconductor-forecasts/.
Come the first week in February the final (actual) 2012 sales number will be published by the WSTS and you can check out yourself how the various prognosticators portrayed in the above invoked graphic "faired" relative to the accuracy of their respective predictions throughout 2012.
Hi Peter - the latest run of the Cowan LRA forecasting model is more BEARISH on 2012's predicted sales growth outcome than IDC's prediction and, correspondingly, more BULLISH on what the model sees for 2013's sales growth expectations. In particular, the model is projecting a 2.3 percent DECLINE in global semiconductor sales for 2012 compared to 2011's actual sales (per the WSTS) of $299.52 billion. For 2013 the model's sales growth forecast estimate is expected to register an INCREASE of 6.4 percent over 2012's projected sales forecast estimate of $292.76 billion. Both years' sales growth predictions put forth by the model are gleamed from its “operating on” the WSTS's HBR (Historical Billings Report) sales numbers through October 2012 which were posted by the WSTS at the beginning of December. Final year-end sales numbers for 2012 as gathered and tracked by the WSTS will be published on their website at the beginning of February 2013.
Therefore, stay tuned for the "wrap up" of 2012 sales results as well as updated Cowan LRA Model forecasts for 2013's outlook each month as the New Year "plays out."
Happy New Year to ALL.
Mike Cowan (independent market watcher and developer of the Cowan LRA Model for forecasting global semiconductor sales)
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