The Semiconductor Industry Association (SIA) recently reported global chip sales increased by 14.7 percent year-over-year in February.
The group ascertained its members generated $39.59 billion in gross income two months ago.
The SIA also determined that the sector’s income fell 1 percent worldwide between January and February. That negative change likely reflects the impact of the global semiconductor shortage, which began in late 2020.
Why Chip Sales Increased 14.7 Percent in February 2021
The SIA recorded a double-digit increase in chip revenue this February because the industry has rebounded from coronavirus pandemic-related disruption.
National governments worldwide initiated regional self-quarantine mandates to halt the spread of COVID-19 in early 2020. As a result, many semiconductor fabrication hubs temporarily ceased operations and grappled with transportation restrictions. But in the succeeding 12 months, countries lifted their lockdown mandates, and the world embraced digital solutions to adjust to the health crisis.
China-based chip manufacturers saw the greatest amount of year-over-year positive change, earning $13.74 billion in February, up 18.9 percent annually.
The SIA also found that the Asia-Pacific region greatly improved its semiconductor income in the period, jumping 18.2 percent year-over-year. Similarly, Japan grew its revenue by 7.6 percent from the year previous. Those positive results indicate vendors in both areas successfully bounced back from the multibillion-dollar loss of Huawei’s business.
In addition, the Americas and Europe saw their markets grow by 9.7 and 6.5 percent, respectively.
The post-pandemic digitalization boom served as a surging tide that raised all ships in the component industry.
Semiconductor Revenue Fell by 1 Percent in February
The worldwide chip sector’s 1 percent month-to-month contraction could be attributed to two possible causes.
On the one hand, the minimal decline of the industry’s income during the traditionally soft post-holiday quarter could be good news. Global semiconductor sales fell by 2.4 percent in February 2020 and 7.3 percent in February 2019. The slighter than normal revenue reduction could indicate the marketplace is benefiting from businesses and consumers adapting to the post-pandemic landscape.
But on the other hand, the sector’s slipping performance could indicate the worldwide component shortage’s debilitating influence.
Since last December, several large automotive markets recovered from the debilitating impact of COVID-19 earlier than expected. Simultaneously, consumers moved to snap up new electronic devices to facilitate living and working remotely. Taken together, those off-cycle trends created an imbalance between demand and supply in the semiconductor space.
Initially, the flood of orders bolstered manufacturers’ bottom lines. But as raw materials and production capacity became increasingly scarce, providers could no longer address interest in their products quickly. Without products to sell, part suppliers worldwide could experience significant revenue shortfalls as 2021 goes on.
Although the global chip shortage is disrupting the semiconductor marketplace, it is important to remember that the crisis is temporary. Once the imbalance is corrected, the industry will continue expanding to serve an increasingly digitalized world. In fact, manufacturers and world governments are working to establish more cutting-edge foundries in response to that paradigm shift.
At present, analysts expect that the component crunch will persist into 2022. But once it has passed, the sector will be considerably stronger.