Expert's Panel

A collection of timely and important topics posed to our panel of experts.

How do you assess market size for a niche product?

 (ep1051)
1. There is not a pat answer I can give you in two sentences. It's an onerous task. You have to compare the niche markets to known things. If a product is part of the interconnect business. You would know how big the CMP business is—Dataquest and others could give you that figure. Other things such as the process of laying down layers are known. Once you know the constants, then you can start judging this little variable. How many people you think the product will affect and how big a slice that is of the overall market. Then you just start multiplying percentages. Number of wafer starts that are affected by that business, number of layers affected, etc. You then predict how big that business could get and how much of it your product could capture.
2. As was said you extrapolate the data and then try and find another source that can verify it. It's a process.
3. What is most confusing is to try and figure out how much per unit the market will bear. It is a lot easier to figure out a market niche in size. But until there is a price established per unit you may have wrong calculations. You think the customers will pay X but later find out they will only pay X minus 20% per unit. That is probably the biggest variable.
4. That is tough. Good luck!