2016/17 Global Semiconductor Sales & Growth Forecasts Per Cowan LRA Model

2016/17 Global Semiconductor Sales & Growth Forecasts Per Cowan LRA Model

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Cowan LRA Model

Sales forecast

Description: Presented are the latest updated global semiconductor sales and sales growth forecast expectations looking out over the next five quarters, that is, through the fourth quarter of 2017. These latest forecast numbers are derived from running the Cowan LRA forecasting model using the actual sales numbers gleaned from the WSTS's September 2016 HBR, Historical Billings Report.

Author: Mike Cowan (Fellow) | Visits: 504 | Page Views: 532
Domain:  High Tech Category: Semiconductors Subcategory: Big Picture 
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Short URL: https://www.wesrch.com/electronics/docxEL1SE1J5AYJFR

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Cowan LRA Forecast Model’s Bi-Monthly Write-Up For Global Semiconductor Sales
Date: November 15, 2016
Subject: Latest Cowan LRA Model's Global Semiconductor Sales And Sales Growth Expectations For 2016 & 2017

Summarized in the four tables provided below are the latest monthly updates for 2016 and 2017 worldwide
semiconductor sales and sales growth numbers derived by exercising the Cowan LRA forecasting model.
These latest updated forecast expectations are calculated from the recently released (Nov. 09th, 2016)
September 2016 (actual) sales numbers included in the WSTS’s HBR, Historical Billings Report, posted
on their website (URL = http://www.wsts.org/Teaser-Left/Historical-Billings-Report).
Table 1 (below) portrays the three most recent monthly data points for the model’s 2016 and 2017 forecast
results – including the latest update (THIS MONTH) plus the two prior month’s numbers thereby capturing the
very near term forecast sales and sales growth trend results.

The above table shows that THIS MONTH's global semiconductor sales forecast increased by $0.384 billion
for 2016 but decreased $1.588 billion for 2017 relative to last month's expectations, respectively, with
forecasted sales on a percentage basis improving by 0.12% but declining 0.48%, respectively, again compared
to last month’s predictions.
The corresponding year-over-year sales growth percentage improved slightly to -1.4 percent (from -1.5
percent) for 2016 but fell to 4.5 percent (from 5.1 percent) for 2017, respectively, compared to last month’s yro-yr sales growth forecast numbers. The DELTA row numbers capture the respective changes in both sales
forecasts (magnitude and percentage delta) and corresponding sales growth delta expectations (in percentage
points) relative to the previous month’s prognostications.
Table 2 (see below) details the actual numbers broken out on a quarterly, half year, and yearly basis for 2014
and 2015 along with the latest, updated 3Qtrs of 2016 actuals as well as forecast expectations for 4Q 2016
and all of 2017 including both sales and corresponding year-over-year sales growth predictions. Note the 2H
2016 improved sales posture for the industry compared to the 1H results. However not enough of an
improvement in order to push the entire year 2016 sales to positive sales growth.

Table 3 (shown below) summarizes and compares the most recent WSTS forecast predictions with the latest
Cowan LRA Model's expected forecast numbers for both 2016 and 2017.

Finally, Table 4 (see below) details the by-month YTD (Year To Date) actual cumulative sales data and
associated sales growth numbers for 2016 versus the corresponding 2015 YTD sales through September as
well as 2014 to 2015 sales growth actuals. It should be noted that October 2016’s YTD sales and sales growth
numbers represent forecast estimates assuming an expected actual October 2016 monthly sales
forecast of $27.546B. Also included in the table is the updated full year 2016 YTD sales forecast expectations.
These results indicate that the final quarter of 2016’s sales and sales growth estimates are projected to recover
from the (actual) September YTD and (predicted) October YTD levels thereby “reducing the gap” in the EOY
yr-o-yr sales growth number to -1.2 percent points projected by the YTD forecast numbers as the year plays
out. Note that the forecasted 2016 sales growth determined by the latest forecast model run does not recover
to a positive yr-o-yr growth rate. However, 2017, according to the latest model run, predicts a moderate
rebound to plus 4.5 percent (shown in previous tables). Moreover, October’s 3MMA sales forecast number
(normally published by the SIA at the beginning of each month) is predicted to come in at $29.472B.

Actual cumulative global semiconductor sales for the 9 month time period January through September 2016
(according to the WSTS) totaled $245.8 billion, a decrease of 2.6 percent compared to the same time period sales
in 2015. Projected January through October 2016 sales is estimated to total $273.4 billion representing a
decrease of 2.5 percent relative to the corresponding period in 2015. This expected result continues to show that
July sales signaled a turning point in the (cumulative) YTD sales trend which is positive news for the industry
based upon the lackluster 1H sales experience.

Mike Cowan, independent semiconductor industry market watcher / forecaster and creator of the
Cowan LRA Model for forecasting worldwide semiconductor sales.
NOTE – for more insight into the “workings” of the author’s forecasting model, the interested reader is
encouraged to check out the following two papers at the indicated URLs:

1. URL = https://www.wesrch.com/electronics/paper-details/docx-EL1SE1J5AYLNT-an-overview-of-thecowan-lra-model-for-forecasting-global-semiconductor-sales (An Overview Of The Cowan LRA Model For
Forecasting Global Semiconductor Sales, Apr 27th 2014);

2. URL = https://www.wesrch.com/electronics/paper-details/pptx-EL1SE1J5ABATH-forecasting-globalsemiconductor-sales-by-exploiting-linear-regression-analysis-lra (Forecasting Global Semiconductor
Sales By Exploiting Linear Regression Analysis (LRA), May 2nd 2014.