The Portsmouth Group is today releasing a revised forecast for 2004 with IC revenue growth now forecast to be 37% versus our prior forecast of 44%.
For the first half of 2004 the proprietary Portsmouth Group IC model forecast worldwide IC units of 53.6 billion units versus an actual value of 52.9 billion units, worldwide IC revenue was forecast at $86.4 billion dollars versus actual revenue of $85.7 billion dollars and utilization was forecast to be 94.6% versus actual utilization of 94.4%.
In spite of the excellent accuracy the model displayed for the first half of 2004, we have some concerns about the second half. In the last few weeks a number of companies have been releasing downward revisions to their 3rd quarter forecasts, although it should be noted that these are primarily US based companies and the growth reported by WSTS in the first half has primarily been driven by non US companies. Based on recent announcements we have weighted our model towards the lower end of the forecast range producing a new lower forecast for the second half.
Specifically we believe unit growth and therefore utilization will be lower than we previously forecast leading to lower revenue. We are now forecasting worldwide IC revenue for all of 2004 to be $191.4 billion dollars versus $140.0 billion dollars for 2003. One area we will be watching very closely as the second half unfolds is utilization. Our new forecast raises the possibility of a drop in utilization in the second half, a warning sign that conditions for a downturn may be developing. We will be watching leading indicator utilization and industry utilization very carefully throughout the next quarter.
To access the full model and other technical analysis by The Portsmouth Group please contact Mr. Robert A. Walsh II by email at rob.walsh@gbvllc.com or by phone at (603) 766-1936.
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