Semi industry awaits rebound as flat year-end results pour in

semiconductors on board
According to the SIA, semiconductor sales were flat in November after rising slightly in October. They were still below 2018 levels. (Pixabay)

The semiconductor industry ended the last decade with a whimper, but recent evidence seems to confirm the forecast should brighten at the beginning of the new decade.

First, the not-so-good news. The Semiconductor Industry Association (SIA) announced that global sales of semiconductors reached $36.7 billion for the month of November 2019, down 0.3% from the previous month's total and 10.8% lower than the November 2018 total of $41.1 billion. Monthly sales are compiled by the World Semiconductor Trade Statistics (WSTS) organization and represent a three-month moving average. SIA’s members account for approximately 95% of U.S. semiconductor sales.

November’s semiconductor sales were flat compared with the previous month, where sales inched up from September but were remained down from year-ago levels.

"As 2019 winds down, global semiconductor sales continue to lag behind last year's total, but we've begun seeing indications of the modest rebound projected for next year," said John Neuffer, president and CEO, Semiconductor Industry Association, in a statement. "Regionally, the Americas market was the only major market to grow on a month-to-month basis, but sales into the Americas were down substantially year-to-year."

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Sales increased in November 2019 compared to October 2019 in the Americas (2.3%), held flat in China, and decreased in Europe 0.6%, Asia Pacific/All Other  (-1.8 percent), and Japan (-1.9 percent). November 2019 sales were all down from year-ago November 2018 levels in all regions. The table below has details.

November 2019

     

Billions ($)

     

Month-to-Month Sales                              

     

Market

Last Month

Current Month

% Change

Americas

7.28

7.44

2.3%

Europe

3.37

3.35

-0.6%

Japan

3.14

3.08

-1.9%

China

13.00

13.00

0.0%

Asia Pacific/All Other

9.95

9.78

-1.8%

Total

36.75

36.65

-0.3%

       

Year-to-Year Sales                         

     

Market

Last Year

Current Month

% Change

Americas

9.58

7.44

-22.3%

Europe

3.64

3.35

-8.0%

Japan

3.39

3.08

-9.1%

China

13.82

13.00

-6.0%

Asia Pacific/All Other

10.67

9.78

-8.3%

Total

41.11

36.65

-10.8%

       

Three-Month-Moving Average Sales

     

Market

Jun/Jul/Aug

Sept/Oct/Nov

% Change

Americas

6.40

7.44

16.3%

Europe

3.27

3.35

2.6%

Japan

3.07

3.08

0.5%

China

12.10

13.00

7.4%

Asia Pacific/All Other

9.69

9.78

0.9%

Total

34.53

36.65

6.1%

Another promising sign for the semiconductor sector is a recent decline in inventory levels. Last year’s industry downturn caused inventories to bloat at many semiconductor and component companies, who responded by cutting production. The effects are now starting to be felt.

Ron Ellwanger, Senior Research Analyst for Hayden Ferry Lakeside, said in a recent e-mail to FierceElectronics that third quarter 2019 semiconductor inventories dropped 7.1% from the previous quarter. Inventories also decreased substantially at fabless and foundry vendors, he added. Ellwanger expects semiconductor vendors to continue keeping a lid on inventory levels.

 

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