The US Semiconductor Industry Associations book-to-bill ratio for July climbed to 1.12 from a revised 1.11 in June – the June figure had been reported at a preliminary 1.10. July orders on the usual three-month moving average were up 0.4% at $2,269m compared with the June figure, and shipments on the same average were off 0.5% at $2,021m – but were up 36.8% from the July 1992 figure. Actual semiconductor shipments for July were $1,785m, down 25% from the June figure, but were still 25.9% higher than the July 1992 figure. Commenting on the figures, Dr Moshe Handelsman of Advanced Forecasting Inc, Cupertino chip industry watcher, says We expect a significant slowdown in the market at the end of this year and the beginning of 1994, and attributes the looming turning-point to a significant decline in its Leading Indicator of the Consumption of ICs by the Computer industry. This indicator is clearly oscillating on a downward trend. In the past it has been unusual for this indicator abruptly to change its course. Therefore, we expect some major changes in the semiconductor industry adds Handelsman. In addition, Advanced Forecasting is continuously monitoring the status of overbookings. They have surpassed their high 1984 peak, which generated one of the worst recessions in the chip industry. As a rule, the higher over-bookings climb, the deeper the following recession is, says Handelsman. An added factor is the book-to-bill ratio, which has been declining earlier than usual this year and is forecast to continue oscillating on a downward trend. For these reasons, Advanced Forecasting predicts a recession in 1994, which will be deeper than the 1989-90 one, but shallower than the 1985 recession. Advanced Forecasting reminds us that it uses a quantitative macro-economic forecasting model that it claims has accurately predicted all of the turning-points in the chip industry since 1986, so you have been warned: brace for a semiconductor industry recession next year, congratulate yourself if it shows, and if it fails to materialise, well you’ll know to take everything Advanced Forecasting says with a pinch of salt.
