European growth leads a turn in the global chip market

European growth leads a turn in the global chip market

Market news |
By Peter Clarke

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Growth of the European chip market gathered pace in May, one of the signs the continent is now leading the global market out of recession.

The latest figures from the from the Semiconductor Industry Association (SIA) report that the global chip market was worth US$40.74 billion in May on a three-month averaged basis, down 21.1 percent on the US$51.65 billion it was worth a year before.

The percentage drop in the global market value in May was less than the 21.6 percent recorded the previous month, another possible sign of an inflection point.

Although the European chip market is growing it is only a small percentage of the global market, so its global impact is limited. In May the European chip market was worth US$4.67 billion, an increase of 5.9 percent, compared with a year before; up on the 2.3 percent increase shown in April (see Europe shone as chip market fall slowed in April).

Indeed, Europe was the only geographic region to show annual growth in the May three-month averaged data. However, all five geographic regions monitored by the SIA and WSTS organizations showed month-to-month sequential increases.

In May the world’s biggest chip market, China, was down 29.5 percent compared with a year before, but this was a  smaller drop than the preceeding months. The Asia-Pacific region excluding China and Japan was down 23.0 percent, also a smaller decline than the previous month. The Americas region market was down 22.6 percent, which was an increase compared with April and March.

The Japanse market also showed contra-indictions with its market decline gathering pace to stand at a 5.5 percent annual decline in May. This followed on from falls of 1.3 percent in March and 2.3 percent in April. Being of roughly equivalent size the European growth and Japanese contraction balance each other.

Despite this there are gathering signs that the chip market recession hit bottom in the 2Q23 and will see sequential increases in 3Q23 and 4Q23. However, such is the size of the previous market fall it is still likely that despite growth in 2H23 the annual market in 2023 will be smaller than in 2022. The question is by how much?

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

“Despite continuing market sluggishness compared to 2022, month-to-month global semiconductor sales inched upward in May for the third consecutive month, sparking optimism for a possible market rebound during the second half of the year,” said John Neuffer, CEO of 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.

Related links and articles:

News articles:

Europe shone as chip market fall slowed in April

WSTS lowers global chip market forecast for 2023

Bottom in sight as chip market falls 21% in March

Chip market falls 20% in February

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