Future Horizons' CEO explains why the market watcher just increased a 2018 semiconductor forecast that was already the most bullish in the industry.
A recently-published chart from the SEMI trade group (below) summarizes the 2018 semiconductor revenue forecasts from the various industry watchdogs. This clearly shows the global collective received wisdom for 2018 chip revenues in the 7-8 percent range. Cowan’s linear regression model is the most bearish at 5.9 percent, and Future Horizons is out on a limb at a bullish 16.0 percent.
The overall forecast average was 8.3 percent, or 7.2 percent if you exclude our somewhat contrarian position, signalling the end of 2017’s boom. While other forecasters were blotting the ink on their single-digit growth numbers, we were revising our 2018 forecast up to 21 percent, significantly higher than the 16 percent we posted in September 2017. That now placed us almost three times higher than the overall industry view.
Readers familiar with Future Horizon’s research methodology will know that we base our industry analyses on the behavior of what we call the four horsemen of the semiconductor apocalypse--the global economy, IC unit demand, wafer capacity and semiconductor ASPs. These factors combine, albeit in a mathematically indeterminant way, to drive semiconductor revenue market growth. A strong economy stimulates demand for IC units, wafer fab capacity determines the supply and demand balance/imbalance which in turn sets the foundation for ASPs.
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