Global semiconductor revenue up in Q1

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3 trends influencing the semiconductor industry in a coronavirus world.

The Semiconductor Industry Association (SIA) reported on Monday that the global component market grew 6.9 percent year-over-year in the first quarter.

However, the organization warned that the coronavirus pandemic would likely impact sales as the year wears on.

Global Semiconductors Market Expanded in Q1

World Semiconductor Trade Statistics (WSTS) found global component sales totaled $104.6 billion in the March period. Despite COVID-19 disrupting chip production and distribution worldwide, the agency found Q1 revenue increase by nearly 7 percent annually. The WSTS also noted the global semiconductor sales began to climb in March, increasing 0.9 percent from February and 6.9 percent from 2019.

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The SIA data aligns with the first-quarter earnings reports recently made by several chipmakers, including America’s Intel and Qualcomm, Japan’s Murata, Norway’s Nordic Semiconductor, Taiwan’s ASE Technology and UMC, and South Korea’s Samsung and SK Hynix.

WSTS’s analysis also included a regional breakdown of semiconductor sales in the last quarter. Chip purchases in the Americas improved by 21.8 percent yearly while China and the Asia-Pacific region saw increases of 4.5 and 4.6 percent, respectively. Japan experienced the smallest Q1 growth at 1 percent, and European component revenue shrank by 1.1 percent from 2019.

Near-Term Semiconductor Industry Outlook

The SIA did not offer an in-depth outlook for the semiconductor market in the second quarter. However, CEO John Neuffer said, “Ongoing macroeconomic turmoil related to the pandemic has caused significant uncertainty for the global semiconductor market that is likely to persist in the months ahead.”

The organization’s view is supported by the Q2 forecasts offered by many chipmakers, including Xilinx and NXP Semiconductor. Several manufacturers have noted COVID-19 could disrupt production and shipping operations in the June quarter, which would hurt sales. In addition, electronics makers will likely cut their component orders significantly due to coronavirus weakened consumer demand.

Digitimes recently posted a forecast indicating worldwide annual smartphone shipments would decrease by 15 percent in 2020. As the SIA reports communications chip sales represented 33 percent of the semiconductor sold last year, consumer mobile device demand will shape the global component market.

Ideally, a global coronavirus recovery will take place in the latter half of 2020 and prompt a revival in public spending. Otherwise, the semiconductor industry might experience a significant market contraction heading into 2021.

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