Is there a more reliable way of predicting future semiconductor growth?

Markets & Products / Why should I care? / October 25, 2016
When it comes to accurately predicting growth in the semiconductor market, the industry doesn’t have a great record. Even near-term forecasting is unreliable and, when projected growth figures can diverge by up to 96% from the actual figures, useful data is hard to come by.

“This is a serious problem,” said Wally Rhines, chairman and CEO of Mentor Graphics, “especially if you are looking to invest or develop new products.”

The figures for 2016 underline Rhines’ point. Experts have had to revise forecasts made only last year downwards; from predicted growth of 3 to 3.5% to a contraction of 0.8%.

So, why is it so difficult to predict what is happening with any accuracy?

According to Rhines: “Despite the semiconductor industry’s maturity, it remains very volatile and revenue forecasting combines two variables – the unit volume and average price – which can change rapidly.”

Speaking in Paris, Rhines said the industry was not only vulnerable to broader economic trends, but also to industry specific challenges. “It is vulnerable at both the macro and micro level,” he suggested.

IC unit demand is, however, predictable. “Unit, volume and revenue per unit area have remained pretty constant, making it possible to make accurate linear predictions.

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Article from Neil Tyler, New Electronics

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