Japan continues to show relative strength in the global chip market and was the only region to show annual sales growth in May. However, the Asia-Pacific region is responsible for buying 60 percent of global IC production and the contraction of that market by 6.2 percent in May was considerably worse than it had been in April.

The global three-month averaged market for May was $25.95 billion, down 7.7 percent on the same period a year before. The year-on-year fall was greater than the 6.2 percent decline recorded in April (see Japan grows again as global chip market shrinks).

All the other regional markets declined and the increased weakness in the Chinese and Asia-Pacific regions would appear to increase the likelihood of a chip market recession. One of the biggest issues is the weakness of the PC and smartphone markets leading to a surfeit of memory ICs.

Three-month average of sales for May and April 2016. Source: ESIA/WSTS.

The Americas region showed three-month averaged sales in May of $4.78 billion, down 15.0 percent from the same period a year before. Europe with $2.62 billion of three-month averaged sales and Asia-Pacific including China with $16.00 billion were down 8.8 and 6.3 percent respectively, compared with the same period a year before.

All monthly sales numbers are compiled by the World Semiconductor Trade Statistics (WSTS) organization and represent a three-month moving average. Monthly data is given by the ESIA as a three-month average, although the WSTS organization tracks actual monthly data. The ESIA and other regional semiconductor industry bodies opt to use averaged data because it evens out the actual data that typically show troughs at the beginnings of quarters and peaks at the ends of quarters. 

Related links and articles:

News articles:

Japan grows again as global chip market shrinks

Chip market decline deepens

Chip market off to slow start in 2016

Chip market slump drags 2015 annual sales lower

Global chip market to shrink for three years, says IHS

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