Global semiconductor sales saw double digit growth in the past six weeks, but industry officials still worry that fourth quarter sales will be soft.
COVID-19 has been a major contributor to continuing uncertainty for the semi segment for months, with its impact on both demand and the supply chain. In some chip end markets such as cloud servers and PCs, demand has soared with work and learning from home, but soured for auto chips. Disruptions to manufacturing of chips with factory closings in early 2020 seem to have leveled off, however.
Sales for the six weeks starting July 1 have exceeded the same period in the peak year of 2018, according to VLSI analyst Dan Hutcheson in a report issued on Wednesday. His forecast for all the third quarter calls for a 20% improvement over 2019, but he also raised concerns for the final quarter of 2020.
“The big question is: Will this counter cyclicality continue with a soft 4Q?” he asked in a report. “The signals for a drop are there.”
Worldwide semiconductor sales reached $34.5 billion in June, the latest month official figures were available. That’s an improvement of 5% over June 2019, and slightly down from the prior month, according to the Semiconductor Industry Association, which relies on a three-month moving average compiled by the World Semiconductor Trade Statistics organization.
For the entire second quarter, semi sales were flat compared to the first quarter. “The global industry continues to post year-to-year sales increases but significant uncertainty remains for the second half of the year due to ongoing macroeconomic headwinds,” said John Neuffer, SIA CEO in a statement from Aug. 3
SIA reported a major increase in sales in the Americas in June compared to a year earlier, with sales increasing to $7.6 billion, up from $5.89 billion. Second quarter growth was 3% over the first quarter, with nearly all growth coming in June, for a total of $7.6 billion for the entire quarter. China saw a 4.7% improvement in June, reaching $12.28 billion, up from 11.7 billion a year earlier.
Global semiconductor sales reached $468.8 billion in 2018, then dropped by 12% in in 2019 to $412.3 billion, according to SIA.
U.S. semiconductor sales account for 47% of the global market, a position held since the late 1990s, according to SIA. About a third of all semiconductors are used in communications, while 28% are used for computers and 12% are used for automotive, with another 12% for industrial.
Separately, the trade group SEMI reported on Thursday a strong start to second half 2020 semiconductor equipment billings for North America- based manufacturers. For July, equipment billings were $2.6 billion, up 27% over July 2019 and up 11.8% from June.
“The strength reflects the semiconductor industry’s criticality in today’s world and the driving forces in place for long-term industry growth,” SEMI CEO Ajit Manocha said in a statement.