With tariffs expected, global chip market growth starts to decline
The global three-month average chip market grew by 17.1 percent for February, down from 17.9 percent in January, according to the Semiconductor Industry Association, reporting data collected by the World Semiconductor Trade Statistics organization.
All the geographic regions monitored by WSTS saw year-on-year market growth decline in February with exception of Asia-Pacific. Asia-Pacific excludes China and Japan but does include such upcoming countries and territories as India and Vietnam.
Europe is the world’s weakest region has not been enjoying the market growth seen elsewhere. In February the market continued to contract and was down to US$4.01 billion in February, a fall of 8.1 percent. The Japanese market showed annual growth of 5.1 percent in February, a slower rate than in the previous month.
The fastest growing region is the Americas where the chip market in February was 48.4 percent higher than a year before. But that is also dropping from the previous month’s growth of over 50 percent.
It iss noticeable that sequentially all the geographic regions suffered declines although this is a seasonal effect with the inclusion of the month of February and the exclusion of November in the 3MMA.
The market figures continue to reflect the trends seen throughout 2024; of some companies and markets driven by an AI boom while others are faced with sluggishness impacting the automotive, industrial and infrastructure markets.
The expected introduction of chip tariffs by the US of 25 percent or more and the potential for retaliatory tariffs are likely to have a chilling effect on chip markets as 2025 plays out.
Three-month average of chip sales by geographic region for February and January 2025. Source: SIA/WSTS.
“Despite a slight decline in month-to-month sales, the global semiconductor industry hit its highest-ever monthly sales total for the month of February, driving strong year-to-year growth,” said John Neuffer, CEO of the 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.
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Europe’s chip market continues to shrink amidst global growth
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Americas chip market soars as Asian growth slows
Europe’s chip market shrinks as WSTS trims forecasts for 2025
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