The global semiconductor market is heading for a fall earlier and deeper than market forecasters have so far predicted.
The annual growth of the global chip market was 0.1 percent in August down from 7.3 percent in July, according to the Semiconductor Industry Association, reporting figures compiled by the World Semiconductor Trade Statistics organization.
These three-month moving averages smooth out anomalies in individual months but also serve to emphasize the rapid onset of the market softening and likelihood of a deeper decline than even the most bearish predictions.
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The slowdown has produced a quarter-on-quarter sequential decline of 8.3 percent. Normal seasonality would show strong sequential market growth as companies buy in chips for consumer electronics launches in the autumn ready for the November-December buying season.
Malcolm Penn, chief analyst with Future Horizons, forecast a 22 percent year-on-year market decline in 2023. With a quarter-on-quarter decline of 8.3 percent arriving in August the situation appears to already be worse than Penn’s “bear” forecast.
Three-month average of chip sales by geographic region for August and July 2022. Source: SIA/WSTS.
The Chinese and Asia-Pacific regions, with their close coupling to consumer electronics, are driving the market down initial. China’s chip market is now 10 percent smaller than it was a year ago. Asia-Pacific also tipped into annual contraction in August. The America’s and Japan regions are still showing growth but it is rapidly diminishing following where Asia leads.
Americas region chip market growth was phenomenally strong at 40 percent annual growth and has fallen to 11.5 percent. Japan’s market has fallen from 16.1 percent annual growth in June to 7.8 percent in August.
This leaves the almost unprecedented situation of the European region leading growth with 14.9 percent.
“Global semiconductor sales growth has stalled in recent months, and month-to-month sales decreased in August by the largest percentage since February 2019,” said John Neuffer, CEO of the SIA, in a statement.
Monthly data is given by the SIA as a three-month average although the source of the data, World Semiconductor Trade Statistics, tracks monthly data. The SIA and other regional semiconductor industry bodies opt to use averaged data because it evens out the actual data that typically shows troughs at the beginnings of quarters and peaks at the ends of quarters.
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