80 Percent Increase in Semiconductor Equipment Bookings Prove Accurate Forecasting Possible.

CUPERTINO, Calif.--(BUSINESS WIRE)--Jan. 21, 1999--Semiconductor equipment bookings are up 80 percent and one semiconductor forecasting company is reminding the industry that accurate forecasting is a reality.

Advanced Forecasting, Inc., (AFI) a semiconductor industry forecasting firm based in Cupertino, was the first to announce an end to the industry recession last July when it released its forecast at the SEMICON West Show. Now AFI points to newly released data from SEMI, an industry trade association, as confirmation of their forecast and proof that accurate forecasting is available.

"This information serves to reconfirm our forecast," said Moshe Handelsman, Ph.D. AFI's president and founder. "Sales of semiconductor equipment lag behind the semiconductor sales performance by about one to two quarters. So we told our equipment clients last July that they should expect an increase in bookings in October and November."

According to the SEMI Flash report data from a sample of U.S. equipment vendors, their semiconductor equipment bookings increased to $821 million from the September bottom of $481 million. The 80 percent increase reflects a recapturing of 34 percent of the $1.1 billion decline in bookings experienced by this sample during the period from November 1997 to September 1998.

Frustrated by the extreme cycles experienced by the chip industry over the last decade, some industry executives and strategic planners have publicly declared that accurate semiconductor industry forecasts are just not possible.

"We politely disagree with those who say accurate forecasting is not available," says Patrick Driscoll, AFI's vice president of Sales and Marketing. "We have accurately predicted the major turning points in the IC industry for the past 12 years with 90 percent accuracy. And we do not retroactively modify our forecasts." As for the near future, Driscoll believes it will be good. "We are seeing trends which point to a very strong year ahead"

Dr. Handelsman pointed out that accurate forecasting requires the use of objective, quantitative data, "Subjective opinions are not to be relied on for forecasting this industry."

AFI was founded following the 1985 industry recession, while Handelsman was a professor of Marketing Research at Santa Clara University.

"Most forecasters in 1984 predicted a 22% growth in semiconductor shipments for 1985. Instead, the industry realized a 30% decline. My students asked me how can the forecasters have been so wrong? After a little investigation, I found that even the supposedly most reputable firms relied on subjective opinions and qualitative data. So I developed a quantitative-based forecasting model and opened up the firm in 1985-86."

AFI provides quantitative forecasts of all ICs and discrete devices, semiconductor equipment (front-end and ATE), disk drives, and PCBs. It is the only forecaster that guarantees its forecasting services with a 6-month full refund. More information about AFI's methodology, publications, and services is available online at http://www.adv-forecast.com.

Note to editors: A graph of IC sales data compared to AFI's Recovery Index is available from AFI via fax or e-mail.