Advanced Forecasting's Quantitative Model Confirms an Approaching Bottom for the Semiconductor Industry.

Business Editors

CUPERTINO, Calif.--(BUSINESS WIRE)--Nov. 6, 2001

Quantitative forecasting firm Advanced Forecasting may finally have some positive news to announce amid disappointing industry reports, the WTC disaster, and stock market fluctuations.

As the U.S. Government attempts to stimulate the economy, its unemployment rate soars to a five-year high of 5.4 percent, and many companies continue to eliminate jobs, the Semiconductor and related Industries keep on announcing disappointing news. The industry reported for September 2001 another 11% drop in semiconductor equipment bookings for North American manufacturers, a continuous decline in IC revenues (September's sales reached $8.7 Billion, a drop of 45 percent year-over-year), and even a significant decrease in PCB dollar bookings.

However, AFI draws attention to recent data points published in its quantitative based forecast models of industry turning points. "For most of 2001, our IC Recovery Index depicted a severe and rapid decline in IC sales, but recently, data points from our IC Recovery Index, Wafer Shipments, and DRAM ASP Forecasts have shown a much slower rate of descent," states David Crume, director of Marketing and Sales at Advanced Forecasting, Inc. "As with the previous industry recessions of '96 and '98, the position of these data points signals an approaching minimum point and some encouraging news for many companies, especially the hard hit DRAM manufacturers."

True to its typical fashion, the research firm has not revised it's original forecast from the beginning of 2001 that IC revenues would reach a bottom to the current recession in the fourth quarter of this year. "As we measure the economic factors, the events of September 11th seem to have a relatively limited impact on the outcome of our quantitative models," says Crume, adding that the minimum point could possibly be delayed though AFI is encouraged by what these quantitative models are depicting, especially AFI's Recovery Index, a derivative of its long term forecast model for IC demand.

Earlier this year, AFI was quick to discount signals from officials at Intel and Applied Materials, who highlighted hopeful expectations of a bottom in Q2-01 and ensuing recovery in Q3, but have since laid off employees under declining profits. However, Crume cautions that some analysts, who earlier predicted the 1999-2000 boom would last into 2003, may now be overly pessimistic.

Advanced Forecasting has relied on its quantitative based models during the past 15 years to decipher the timing of the minimum point and the following post recession growth for the IC and related industries. These issues are analyzed in its monthly market analyses.

AFI offers quantitative forecasts of all ICs and discrete devices, semiconductor equipment (Front-End and Back-End), disk drives, PCBs, Fab Capacity Utilization, Wafer Shipments and DRAM ASPs. Forecasts' rolling horizons extend up to 29 months. AFI is the only forecast firm that has guaranteed its forecasting services with a full refund period since its inception (1987). More information about AFI's methodology, publications, and services is available online at http://www.adv-forecast.com.