Tuesday, March 6, 2012

Chip sales slipped 2.7 percent in January - what you need to know!

Dr. Robert Castellano, USA.

NEW TRIPOLI, USA: The SIA announced that the three-month rolling average of global semiconductors in January totaled $23.1 billion, down 2.7 percent from $23.8 billion. January chip sales were down 8.8 percent compared with January 2011, according to WSTS data. As I stated in a February 21 Insight piece, semiconductor sales will NOT rise through Q2 2012.

Maybe I'm finally getting your attention. Chip sales are a direct correlation with macroeconomic forces, and the only way to determine growth or non-growth is an accurate and intimate correlation between certain leading indicators (among thousands for 40 different coutnries worldwide) and semiconductor and semiconductor equipment sales.

So, this is what you need to know, and all you need to know.

Over the past 16 years we have done just that, developing our PROPRIETARY LEADING INDICATORS (PLLs) for both semiconductor sales and semiconductor equipment sales forecast out up to at least six months. These we supply monthly to subscribers of our Annual Subscription Service.

If you remember we noted in mid 2011 that semiconductor sales would peak in Sept 2011, which they did.

We don't forecast based on:
(1) wave a wand,
(2) do a linear regression analysis, or
(3) give forecasts in hundredths of decimal places when even a number in tens (not tenths) of digits would be more accurate for projections five years out.

All of these I noted with cynicism last week. Oh, one more bit of cynicism. All those analysts that merely paid big money to get WSTS and SIA data and massage it into forecasts are now going to have to work harder for the info, with Intel and AMD not supplying free info. Clearly, forecasts will be even less accurate without these data.

The chart below is an example of the correlation of our PLLs with semiconductor sales (as stated we have other PLLs for correlation with equipment sales). I have taken out 2011 data (I'm not stupid) but the chart we supply to subscribers does indeed have up-to-date data.Source: The Information Network, USA.

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