Memory Boom is Pushing Semiconductor Sales Up 21%

9 August, 2017

Semiconductors sales grew 20.8% during the first half of 2017. IC Insights put the blame on the exceptional growth in the DRAM and NAND flash memory markets

Micron DRAM

The Global semiconductor market is about to reach unprecedented sales during 2017, forcing its observers to update former mild forecasts to catch up with the rapidly changing market. According to the Semiconductor Industry Association (SIA), the worldwide sales of semiconductors reached $97.9 billion during the second quarter of 2017, an increase of 5.8% over the previous quarter and 23.7%  more than the second quarter of 2016.

During June 2017, Global sales reached $32.6 billion, a surge of 23.7% compared to June 2016. Cumulatively, semiconductors sales during the first half of 2017 were 20.8% higher than in the same period in 2016. “The global semiconductor industry has posted its highest-ever quarterly sales in Q2 and record monthly sales in June,” said John Neuffer, president and CEO, SIA. “Sales into the Americas market were particularly robust in June, and all regional markets saw growth of at least 18 percent year-over-year.”

Updating the Annual Forecast

This surprising change brought the research firm IC Insights to re-evaluate its annual forecast. “Entering the second half of the year, it is clear the IC industry is on course for a much stronger upturn than was initially forecast in January,” the firm wrote in August 1.  IC Insights now expects the IC market to increase 16% in 2017 due to exceptional growth in the DRAM and NAND flash memory markets. The DRAM market is now forecast to grow 55% and the NAND flash market is now expected to rise 35% this year.”

Global Semiconductors Sales 2017
Global Semiconductors monthly sales. Compiled by the World Semiconductor Trade Statistics (WSTS)

In both cases, the rising sales is mainly a result fast-rising prices, rather than unit growth.  Excluding these two markets, the overall IC market growth is forecast to show just 6%.  The expected 16% increase would be the first double-digit gain for the IC market since the recession-recovery year 2010, when it expanded by 33%.


IC Insights says the DRAM market has had a notable impact on total IC market growth in recent years.  With market surges of 32% and 34% in 2013 and 2014, respectively, the DRAM market alone boosted the worldwide IC market growth rate by three percentage points in 2013 and four percentage points in 2014. “At $64.2 billion, the DRAM market is forecast to be by far the largest single product category in the IC industry in 2017, exceeding the expected second-ranked MPU market for standard PCs and servers ($47.1 billion) by $17.1 billion this year.

According to a report of DRAMeXchange, a division of TrendForce, that was published this week, the average contract price of PC DRAM modules rose by nearly 40% sequentially in the first quarter to US$24 and then by more than 10% sequentially in the second quarter to US$27. Furthermore, the average contract price of PC DRAM modules increased by about 4.6% between this June and July.

“The DRAM market in the second half of this year will be entering the busy season with tight supply made worse by the temporary suspension of N2 (Fab-2) owned by Micron Technology Taiwan (MTTW),” said Avril Wu, research director of DRAMeXchange. MTTW was formerly known as Inotera before Micron’s acquisition. The company’s fab N2, which is located in Taiwan, suffered a contamination event caused by malfunctioning gas equipment at the start of this July and halted production for two weeks for the cleanup.”

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Posted in: News , Semiconductors