Global chip market starts year solid, faces economic threats
Year-on-year market increases in China and the Americas almost totally compensated for 5 percent market declines in Europe, Japan and Asia-Pacific excluding Japan and China, according to the Semiconductor Industry Association (SIA) reporting World Semiconductor Trade Statistics (WSTS) figures.
As a result, the three-month average global chip market in January was $35.39 billion down 2.2 percent compared with December and down 0.3 percent on January 2019. While the recovery would normally signify a return to growth in the following year, in 2020 there is currently uncertainty about how the spread of Covid-19 will affect the global economy.
Covid-19 could produce an effect similar to, or larger than, the dot-com bubble bursting in 2001 and the financial crisis of 2007-2008.
Evidence of the return to growth could be seen in the China market, which recorded averaged January sales total of $12.23 billion, up 5.2 percent on January 2019. Because sales figures are averaged over a given month and its two predecessors the impact of Covid-19 will feed in gradually over the next few months.
Three-month average of chip sales by geographic region for January 2020 and December 2019. Source: SIA/WSTS.
“The global semiconductor market got off to a solid start in 2020, with the industry nearly posting positive year-to-year sales growth for the first time in more than a year,” said John Neuffer, CEO of SIA, in a statement. “Still, the global market faces significant macroeconomic headwinds, including global trade unrest and ongoing concerns about worldwide spread of the coronavirus, which could limit continued market recovery.”
Next: Uncertain prospects
In 2020 and 2021, global sales were expected to increase by 5.9 percent and 6.3 percent, respectively prior to the arrival of Covid-19.
Monthly data is given by the SIA as a three-month average although the source of the data, the World Semiconductor Trade Statistics organization (WSTS), tracks actual 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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