SEMI, an electronic components industry trade organization, reported North American semiconductor equipment manufacturers recorded $2.65 billion in billings last month.
The sector experienced a 3.25 percent invoicing uptick from July and a 32.5 percent surge from August 2019. SEMI CEO Ajit Manocha said that demand for semiconductor manufacturing tools pushed the region’s buyers to make purchases despite market uncertainty.
Component Equipment Sales Recovering From Coronavirus Impact
As reported by the BBC, the U.S. economy experienced a 32.9 percent contraction during the second quarter of this year because of the coronavirus pandemic. That rapid negative change caused widespread unemployment and a major drop off in consumer spending.
However, SEMI’s data indicates the health crisis did not dissuade North American manufacturers from ordering new electronic component production machines.
The organization’s information indicates the region’s annual semiconductor equipment billings grew by an average of 21.1 percent from March to August. That said, the sector did experience a downward trend from March until May. Presumably, manufacturers reduced their capital expenditures due to minimal long-term visibility in the first half of 2020.
But a positive trend emerged by summer as semiconductor equipment billings rose by 11.1 percent from June to July. By that point, North American chipmakers experienced a jump in sales due to the increased need for electronic components. Due to the pandemic, online service providers and newly homebound employees bought processors, memory chips, and laptops to adjust to the “new normal” of working offsite.
Accordingly, semiconductor manufacturers have increased their equipment purchases to meet rising demand. In addition, researchers expect the segment’s expansion will continue even after the world adjusts to the remote work paradigm.
Long-Term Growth Predicted
Global Market Insights, a consulting firm, recently published a report indicating the component manufacturing tool market will reach $80 billion by 2026. The organization’s projection calls for a robust compound annual growth rate of 6 percent through the forecast period.
The group noted the coronavirus outbreak acted as a growth driver for computing-related sectors. However, the firm also identified other factors that will play a part in increasing the segment’s value. For example, it pointed to the high cost of advanced production equipment like extreme ultraviolet lithography (EUV) machines, which sell for around $150 million each.
Global Market Insights also determined the trend of national governments investing in their domestic semiconductor industries would bolster equipment purchasing. The firm’s research also indicates the adoption of emerging technologies like vehicle electrification, 5G, and Internet of Things (IoT) will prompt robust future chip production machinery sales.
Considering Global Market Insight’s findings, North American semiconductor equipment billings will likely continue to rise throughout the end of 2020. Society’s ongoing digital transformation should expand the segment for many years to come.