IC Insights Bulletin: Ramifications of Cheap Oil on IC Market Growth to be Discussed at the Upcoming McClean Report 2015 Seminars!
has discovered in its market research analysis.
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Ramifications of Cheap Oil on IC Market Growth to be Discussed at the Upcoming McClean Report 2015 Seminars!
The current price trend for oil gives credible upside potential to IC Insights’ current expectations for worldwide GDP and semiconductor market growth.
As part of its release of The McClean Report 2015 later this month, IC Insights will present its McClean Report seminars on January 20, 22, and 29 that discuss its IC market analyses and forecasts through 2019.
IC Insights has always believed that a semiconductor market forecast is essentially useless unless one knows the assumptions behind it. One way that IC Insights attempts to separate itself from other research organizations is by always including a detailed analysis of the assumptions behind its semiconductor market forecasts. In that way, our clients can fully understand the forecast and can make their own assessment of whether they believe the forecast looks good or, in their opinion, is too low or too high.
Many of IC Insights’ clients have asked about our forecast methodology and what “model” we use. Our response has always focused on the various inputs and crosschecks that go into creating our forecast and how it is not a model in the truest sense of inputting data into a formula and having the market forecast percentage figure come out at the end. Figure 1 describes the basic components that comprise IC Insights’ forecast methodology. As shown, it can best be described as a “Top-Down/Bottom-Up/Cycle/Experience/Crosscheck” model. One of the important inputs into IC Insights’ model is the worldwide GDP forecast, and a very important part of that input is oil prices.
Historically, there has been a good correlation between oil prices (U.S. dollars per barrel) and worldwide GDP growth, with lower prices correlating to stronger future growth. The average price per barrel of oil declined 31% in 2009 as compared to 2008, and the price of oil transitioned from being a “headwind” on the fortunes of the worldwide economy to a “tailwind.” Partially driven by lower oil prices, 2010 worldwide GDP registered a very strong 4.1% increase.
Given the current forecast for the price of oil in 2015, IC Insights expects oil prices to once again be a “tailwind” for worldwide GDP growth.
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