May 29, 2020 — Strategy and Tactics:Forecasting 2021: How to approach it. WildPhotons: It's not what you look at that matters. It's ...
G. Dan Hutcheson
Forecasting 2021: How to approach it. What won't work, what will, and what it means. Here's the thing: Using conventional econometric or time-series models based on historical data simply won't work this time because there are too many outside-the-sample events for a complex model to comprehend. I count five. The first three are powerful forces pulling business to the downside, while the last two are powerful forces pulling business to the upside. None of these have been seen before, which is why conventional forecast models won't work. All of these are disruptive to a degree that statistical weights and algorithms have little meaning beyond the business models they are constructed around. Simpler, heuristic models have better odds of success.
Why the WAHE could be bigger than you think: Using heuristic models, we assess the new demand potential that the Work-At-Home Economy can create for the semiconductor equipment industry. The results are huge: double-digit increases in the short-term and triple-digit increases over the long-term at levels comparable to what China has added to demand. That speaks to the value proposition that much more investment is needed to get to a new normal. Meanwhile, welcome to the WAHE, the new abnormal that will drive investment.
A Personal Thank You:
I discovered grief is two-sided... a page in your book of life. On one side is pain and on the other is love. The more love, the greater the pain. It is the pain that obscures our view of the love. Living through grief is about turning the page to see the love.
ChipChirpsTM VLSI's Semiconductor Analytics: The COVID slump. Facts from the Far Side VLSI's Semiconductor Analytics report: ... ChipChirpsTM are short notifications from VLSI's analysts to alert clients about breaking news and events. They are exclusively available on VLSI's App for Android and iOS: