Chip market bounce could reflect pre-tariff purchasing

Market news | May 5, 2025

By Peter Clarke

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The three-month average of the global chip market in March was worth US$55.90 billion, up 1.8 percent on the previous month and up 18.8 percent compared with a year before, according to the Semiconductor Industry Association.

The three-month moving average in March is a proxy for chip sales in the first quarter and annual market growth has increased compared with February’s annual growth of 17.1 percent. This could reflect a spate of chip purchasing in the month of March itself although the third month in any given quarter usually records the highest sales.

Reference to actual monthly sales data at World Semiconductor Trade Statistics (WSTS) reveals that March’s global chip market was worth US$62.76 billion.

Europe’s chip market continued to contract on an annual basis but the rate was slower than in previous months. Meanwhile all the other geographic regions tracked by WSTS saw their markets increase in size on an annual basis.

The fastest growing region is the Americas where the chip market in February was 45.3 percent larger than a year before. Japan and China showed single-digit percentage growth while Asia-Pacific excluding Japan and China showed strong growth at 15.4 percent.

The imposition of tariffs on chips imported into the US is likely to have a chilling effect on the global chip market during 2025 but in the latest figures it would appear that the uncertainty fostered by US President Trump’s announcements and delays is prompting purchase orders to be pull forward.

Three-month average of chip sales by geographic region for March and February 2025. Source: SIA/WSTS.

“Global semiconductor demand remains high, with first-quarter sales substantially outpacing the first quarter of last year,” said John Neuffer, CEO of SIA. “Year-to-year sales increased by more than 17 percent for the 11th consecutive month, driven by a year-to-year sales increase of roughly 45 percent in the Americas,” he added.

Monthly data is given by the SIA as a three-month average although the source of the data, WSTS, tracks sales monthly basis. 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.