US, China driving global chip market higher

Market news | March 5, 2024

By Peter Clarke

semiconductor silicon market

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The value of the global chip market continued to climb in January with China’s market increasing by 26.6 percent on an annual basis, according to figures from the Semiconductor Industry Association (SIA).

The Americas regional market – predominantly the US – also jumped ahead on a yearly basis, by 20.3 percent.

The SIA reports figures as a three-month moving average based on data collected by the World Semiconductor Trade Statistics organization. The market grew to US$47.63 billion, up 15.2 percent compared with US$41.33 billion in January 2023. This compared with an 11.6 percent rise for the month before, and 5.3 percent increase the month before that.

The strong Americas and Chinese regional growth indicates a return of consumer electronics demand, likely driven partly by an extended replacement cycle and partly by AI. China’s annual rebound also reflects the depth of dip a year before born partly of temporary covid restrictions.

But while the Americas and China regions are now building sales strongly the European and Japanese regions have moved into reverse. The European and Japanese retreat indicates that component stockpiles may have accumulated in the automotive and industrial sectors that lead in those geographies.

Current forecasts for the growth of the 2024 global chip market vary between about 13 and 20 percent.

Three-month average of chip sales by geographic region for January 2024 and December 2023. Source: SIA/WSTS.

“The global semiconductor market started the new year strong, with worldwide sales increasing year-to-year by the largest percentage since May 2022,” 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, 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.