Report: Global semiconductor market grew by 4.9 percent in July from 2019

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Gartner reports component market down due to coronavirus.

The Semiconductor Industry Association (SIA) recently reported the global integrated circuit (IC) market grew by 4.9 percent year-over-year in July. The group also revealed the sector’s worldwide sales expanded by 2.1 percent from June.

However, microelectronics market health varied significantly by region in the first month of Q3 2020.

Semiconductor Market Growth Remains Strong Despite Coronavirus Headwinds

The SIA determined global IC sales totaled $35.2 billion in July using data collected by the World Semiconductor Trade Statistics (WSTS) organization. In the same timeframe last year, the market’s worldwide value stood at $33.5 billion. In addition, chipmakers sold $34.5 billion worth of electronic components in June.

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Early this year, the coronavirus pandemic significantly disrupted the semiconductor industry by prompting global production shutdowns and international travel restrictions. However, many major microelectronics production hubs, like China, started to recover from the outbreak’s impact in March.

The region’s quick rebound helped the worldwide semiconductor industry grow by 6.9 percent annually in the first quarter of 2019.

The global health crisis caused a spike in cloud services usage and computer hardware purchases as millions of employees and students started working from home. Online application providers, telecoms, and electronics manufacturers bought large quantities of chips to meet demand.

Those two trends acted as drivers for worldwide IC segment growth in the second quarter.

The SIA’s report on July’s global semiconductor sales suggests the market will continue growing into the latter half of 2020. That said, the organization cautioned that the pandemic had muddled near-term forecasting accuracy.

Geographic Variances in Semiconductor Sales

WSTS’ data indicated the Americas saw the greatest amount of annual microelectronics sales growth in July. The region’s vendors moved $7.69 billion in IC products that month, a year-over-year increase of 26.5 percent.

The SIA found China’s semiconductor market experienced the second-highest rate of growth in July. The sector’s value reached $12.29 billion, up 3.5 percent from 2019.

The Asia Pacific region, excluding China and Japan, sold $9.43 billion worth of semiconductors, a year-over-year uptick of 1.43 percent.

Unfortunately, the rest of the world did not experience the same level of electronic components purchasing activity as America and China. Japan’s microelectronic sales totaled $2.99 billion in July, down 0.4 percent from 2019.

Europe fared even worse in the first month of the second quarter, logging $2.79 billion in IC transactions. Since the area generated $3.28 billion in electronic components revenue last July, its semiconductor market contracted by 14.7 percent annually.

On the plus side, the SIA noted the region’s chip sector grew by 3.2 percent sequentially.

Nevertheless, market watchers believe the European chip sector will decline in 2020 because of the lingering effects of the pandemic. DMASS, a European semiconductor market analyst group, recently predicted the area’s yearly microelectronics revenue would fall by double-digits in 2020.

Hopefully, the global semiconductor growth trend will help the continent’s microelectronics market return to growth in a timely manner.

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