Europe, Japan drag on December’s buoyant global chip market

Market news | February 6, 2024

By Peter Clarke

semiconductor Analog

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Worldwide industry sales totaled US$526.8 billion in 2023; the market grew during second half of year and sales are projected to increase by 13.1 percent in 2024, according to the Semiconductor Industry Association.

European and Japanese chip markets slowed in December but this was more than made up for by a spending spree in China and a sharp uptick in the Americas region, according to numbers from the SIA.

The SIA reports three-month moving averages so the December 2023 figures also serve as a proxy for 4Q23. This fourth-quarter sales of $146.0 billion were 11.6 percent more than the total from 4Q22 and 8.4 percent higher than the total from 3Q23. These high percentages are from a low base in 2022 and there are signs that this advantage will unwind during the course of 2024.

The 2023 year started in recession and was a year of contraction although not so bad as was originally predicted. Global semiconductor industry sales were $526.8 billion, a decrease of 8.2 percent compared to the 2022 total of $574.1 billion, which was the industry’s highest-ever annual total.

The strong fourth quarter was driven by strength in China and the Americas region. European growth slowed and Japan’s shrinking market picked up speed in the December 3MMA.

China’s annual growth of 19.4 percent in December was a phenomenal turned around from 2.4 percent contraction reported in October. China’s 3MMA market was US$15.14 billion.

Asia Pacific proceeded more slowly to an average monthly market of US$12.32 billion, 11.3 percent annual growth in December, up from 7.1 percent annual growth in November and 5.3 percent in October. The Americas region saw a sequential jump of 1.8 percent which took its December 3MMA sales to US$12.83 billion, up 12.5 percent on an annual basis.

Three-month average of chip sales by geographic region for December and November 2023. Source: SIA/WSTS.

Although the European chip market disappointed in December/4Q23 it was the only regional market that experienced annual growth in 2023, with sales there increasing 4.0 percent. Annual sales into all other regional markets decreased in 2023: Japan (-3.1 percent), the Americas (-5.2 percent), Asia-Pacific/All Other (-10.1 percent), and China (-14.0 percent).

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.