Using a macroeconomic forecasting tool that incorporates measures of economic uncertainty, global economic shocks, and regional volatility, the forecasting service, called The Econometric Semiconductor Forecast, predicts a slow first quarter in 2013 will be followed by a strong second quarter with moderate growth in the second half of the year. This modest growth forecast is believed to be demand-driven, since inventory levels have not shown a significant increase in 2012.
The Econometric Semiconductor Forecast is the first to use global GDP macroeconomic models to provide semiconductor industry forecasts at a quarterly frequency with monthly updates, allowing forecast recipients to plan for short-term fluctuations in the volatile semiconductor industry.
“An unstable global economy leads to wide variations in economic forecasts, making it difficult to develop meaningful demand-side forecasts,” said Mark Thirsk, managing partner of Linx Consulting. “Our econometric forecast model allows us to develop more accurate forecasts on a monthly and quarterly basis, which are vital for operations planning and business forecasting in the semiconductor supply chain.”
Based on a demand-driven equation that captures >98% of the long run variation in semiconductors, the economic forecast model used by Linx Consulting includes global real GDP growth from consensus forecasts, US consumer and business spending on technology goods, inventory-shipments ratio, computer and electronics, and financial crisis shock indicator to capture panic behavior in the latest cycle.
Headwinds in the Global Economy
Uncertainty surrounding government policies and ongoing fallout from the financial crisis combine to restrain growth in 2013. Protracted periods of uncertainty followed financial crises in the past, accompanied by prolonged subdued growth rates as major economic policies changed and debt restructuring dampened investment and spending. Few of today’s policymakers or business leaders have experience dealing with this type of an environment. That lack of experience adds to the uncertainty in the current outlook, as it tends to increase cautious economic behavior by consumers and businesses. In 2013, policies should become a bit more settled in the first half of the year, improving confidence somewhat. Global economic growth is unlikely to recover to its longer-term potential until after 2013 as fundamental structural imbalances will improve slowly at best.
In the face of these headwinds, the more than 250 forecasters surveyed in the December 2012 Consensus Forecasts produced a consensus subdued, below-trend global growth of 2.6% in 2013. This is a slight improvement over the 2.5% now expected for 2012, but less than the 3.1% achieved in 2011 and below the long-term potential real global growth rate of around 3.5%. While the consensus averages to 2.6% for 2013, there is a relatively wide range in individual forecasts, reflecting the uncertainty in the outlook. Individual outlooks depend most on how forecasters see developments in the US and Eurozone.
Read more from The Econometric Semiconductor Forecast: Regional developments to affect growth of semiconductor industry
The forecasting service will provide subscribers with monthly updates of quarterly forecasts of total semiconductor production in Million Square Inches of silicon processed, as well as segmentation by device, including DRAM, flash, MPU, ASIC, analog and discrete.