Worldwide semiconductor market recovered by 1% in Q2

22 August, 2016

While the slight improvement in Q2 is good news, the 5.8% drop in sales in 2016 is still the harsh reality for worldwide Semiconductor industry. Meanwhile, industry giants live in a parallel universe: the 20 leading Semiconductor sales grew by 7%

While the slight improvement in Q2 is good news,  the 5.8% drop in sales in 2016 is still the harsh reality for worldwide Semiconductor industry. Meanwhile, industry giants live in a parallel universe: the 20 leading Semiconductor sales grew by 7%INTEL-FAB

Q2 earning reports season has passed, and now is a good time to take stock of the semiconductor industry’s results in the passing quarter. The semiconductor industry has drawn a great deal of attention in the last months due to weakening demand and grim growth outlooks for 2016.

According to Semiconductor Industry Association (SIA), worldwide sales of semiconductors reached $79.1 billion during the second quarter of 2016, an increase of 1.0 percent over the previous quarter. Yet a comparison to the same quarter last year reveals the true width of the industry’s crisis: Q2 2016 represent a 5.8% decrease in semiconductor sales compared to the second quarter of 2015.

The main causes for this year’s slump are the ongoing slump in the global economy’s growth – mostly in Europe and China, the sharp decline in DRAM and NAND memory markets, and the weakening of PC and mobile markets.

Grim forecasts for 2016

The outlook for the second half 2016 is far from rosy. According to World Semiconductor Trading Statistics (WSTS), worldwide semiconductor market is forecasted to be $327 billion in 2016, a 2% decrease from 2015.

Some sectors of the worldwide semiconductor market grew in Q2 2016, but the growth of sectors such as Optoelectronics (1.8%), Sensors (7.6%), and Analog ICs (1.0%) is expected to be offset by declines in
Memory (-10.2%) and Logic (-2.5%). While the forecasts for 2016 remain grim, there is a light in the end of the tunnel – according to WSTS, growth is expected to commence in 2017 and 2018. For 2017 and 2018, all major product categories and all regions are forecasted to grow reaching US$341 billion in 2018. As a result, the worldwide semiconductor market is forecasted to be up ~2% year-on-year in both 2017 and 2018.

SENICONDUCTORS-1H2016
what crisis? The top-20 are booming

The 20 industry leaders grew by 7%

A further current research sheds another light on current semiconductor industry trends: IC Insights, a research company specializing in the semiconductor industry has published a report on the top-20 semiconductor supplier’s sales in 2016. The Reports shows that the sales of these 20 industry leaders have risen by 7% compared to the first quarter of this year.

From the top-20 supplier’s, 7 reported a double-digit increase in sales, while only two reported a decrease in sales: Intel (-1%) and Japanese Renesas (-3%). The company reporting the highest growth rate was Taiwanese MediaTek with a staggering 32% increase in sales, mainly due to a large volume of processors sold to Chinese mobile manufacturers such as OppO and Vivo. Intel, Samsung and TSMC remain firm on the top of the list.

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