Pandemic set to drive chip market down 6% in second quarter
The market research company looked at the 2Q20 guidance of 21 leading semiconductor companies and found in aggregate they are forecasting a non-seasonal 5 percent sequential decline in their chip revenues. These companies were responsible for $62.9 billion in revenues in 1Q20 out of a total market estimated by WSTS at $104.6 billion.
The average sequential increase Q2/Q1 in the years 2010 to 2019 was 3.6 percent with a sequential decline only posted in one year. In 2011 the market contracted in Q2 by 1.7 percent.
IC Insights sees the total market performing less well than these market leaders. However, it is notable that within the 21 that some are seeing increased sales due to the Covid-19 pandemic and other effects.
Six companies expecting an increase in 2Q sales; 15 anticipating a decline or flat sales. The numbers shown in Figure 1 represent the mid-point of the guidance.
A sampling of 2Q20 semiconductor sales guidance. Source: IC Insights.
MediaTek is doing well partly because Huawei is switching orders to that company to try and get round an effective ban imposed by the United States on it receiving chips from foundry.
Similarly SMIC maybe the beneficiary of increased domestic ordering in China in the wake of heightened US-China trade tension. AMD and Western Digital/SanDisk and Nvidia are likely benefiting from increased sales into datacenters, which have become heavily used during lockdown.
Broadline semiconductor companies are suffering the most with double-digit sales declines anticipated by Europe’s Infineon, NXP and STMicroelectronics as well as by Texas Instruments and Skyworks.
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