Objective Analysis Forecast Update

Sketch of a chart with arrow pointing up and to the rightAlthough The Memory Guy blog doesn’t often discuss the total semiconductor market, Objective Analysis does a particularly good job of forecasting not only memories, but also the semiconductor market as a whole.

That said,  a video explaining our 2023 semiconductor forecast has recently been posted online in the form of an interview with Dan Hutcheson, former CEO of VLSI Research, which was acquired last year by TechInsights.  This is the same format that we have used every year for over a decade, and which VLSI has graciously hosted on its website for all those years.

Getting to the interesting part, though, what is our forecast for the 2023 semiconductor market?  I think that nobody will be surprised to learn that we anticipate a big 19% revenue decline coming off of only 6% growth for 2022.  The current downturn will lead to that.

WSTS has not yet released its tally of actual 2022 revenues, so we will have to wait for about a month before we can compare the 6% forecast we made over a year ago to 2022 actuals, but early figures indicate that the year ended with roughly 4% growth over 2021.

Forecast Once, and Do It Right

Objective Analysis has a unique philosophy about forecasting.  Our competitors update their forecasts once or more during the course of the year, with some of them waiting until as late as November to release the year’s final update, as is illustrated in the chart below.  We see that as unhelpful to our clients.

Chart showing eight competing semiconductor forecasts as they are updated over the course of the year.

Who wants to be told at the beginning of the year that there will be 5% growth, when the year is actually going to be negative by 12.5%?  The red line is the Objective Analysis -5% forecast for 2019, which set us apart from the crowd at the beginning of the year.  The dashed “WSTS 12/12” line, the actual revenue trend that was updated monthly, appears to be what our competitors were using to adjust their outlooks over the course of the year.

We take a very different approach.  We make our very best effort to be as accurate as possible early on when our clients are actually making business planning decisions that depend upon a valid forecast.

We have a consistently-accurate forecast model that we openly explain, and our record is good enough that we compare all of our past forecasts against the actual market growth on a “Forecast Accuracy” page on the Objective Analysis website.  We do this for all years, both the ones that we predicted correctly, and those we badly missed.  You will find that we haven’t missed many!

Those who would like to understand how our model works should read the inexpensive Objective Analysis Brief: Forecasting the Semiconductor Market, which can be purchased for immediate download on the Objective Analysis website.

Have a look at the video, and if you would like more detailed information to guide your planning process, please contact us to explore the ways that Objective Analysis can work with you to generate the best-possible business plan.