Worldwide semiconductor revenue rose by 6 percent in October

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The Semiconductor Industry Association (SIA) recently reported that global semiconductor sales grew by 6 percent in October year-over-year. That means the sector experienced its largest annual expansion since March.

In addition, the World Semiconductor Trade Statistics (WSTS) organization, the agency that collates information for the SIA, raised its full-year electronic components revenue projections for 2020 and 2021.

Global Semiconductor Sales Spike in October

In October, worldwide electronic component sales reached $39.03 billion, up from September’s total of $37.86 billion.

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The positive change was largely driven by improved revenue generation in the Americas and China. The regions sold $8.3 billion and $13.84 billion in semiconductors last month, up 14.2 and 6.3 percent year-over-year. Manufacturers in both areas saw expanded sales due to the coronavirus pandemic acting as a digitalization accelerator.

The SIA reports the Asia Pacific region also experienced a healthy 5.3 percent uptick in revenue from 2019 last month.

Unfortunately, Japan and Europe did not enjoy similar gains; their respective semiconductor industries shrank by 1 and 4.8 percent. Both regions’ electronic components revenues have steadily contracted since June because of COVID-19 and the ongoing U.S.-China trade war. Their chip sales probably took another big hit after Washington issued new export controls limiting Huawei’s access to certain technologies in mid-September.

Before the American government curbed the Chinese conglomerate’s access to U.S. derived semiconductor technology, the firm spent billions of dollars buying parts from Japanese and European companies.

Despite the difficult year component manufacturers in those regions have had, their fortunes seem to be improving. The SIA notes Japan’s chip income rose by 1.6 percent month-to-month in October while Europe’s semiconductor revenue climbed 6 percent.

Improved 2020 and 2021 Outlook

The WSTS forecasts the global semiconductor industry will generate $433 billion in sales in 2020, excluding optoelectronic and discrete products. The organization’s new outlook represents a 5.1 percent improvement in the sector’s performance from 2019. It is also a positive revision from its July full-year projection of 3.3 percent year-over-year growth.

The organization explained its updated forecast is partially due to a predicted 12.2 percent annual increase in memory product sales.

This year’s digitalization trend played a big role in boosting the segment’s expansion via increased sales to data centers, corporations, and individual computer owners. The recent launch of Microsoft and Sony’s ninth-generation video game consoles also bolstered memory module purchases.

Next year, the WSTS anticipates worldwide semiconductor sales will top 2019’s revenue total by 8.4 percent. This summer, the group projected the industry’s income would only jump by 6.2 percent in 2021.

Two factors are driving the organization’s new robust forecast. First, it expects the memory and optoelectronics segment to experience double-digit growth in the New Year. And second, its most recent data indicate the pandemic did not negatively impact the worldwide component industry to the extent it expected.

The WSTS’ outlook aligns with a positive forecast offered by market research firm Future Horizons in September.

COVID-19 significantly disrupted the entire component sector in early 2020, but it bounced back with remarkable speed. In fact, the outbreak generated enough demand for electronic parts to reverse the losses of its 2019 downturn. By all indications, the global semiconductor industry is prepared to continue enabling societal digitalization in 2021.


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