Evidence mounts for semi slowdown

August 2, 2010 – Chip sales continue to top record numbers, but there will be practically no growth through the rest of the year, according to trending growth figures and expectations from the Semiconductor Industry Association.

Here’s the basic breakdown of the SIA’s latest semiconductor sales numbers:

  • June: $24.93B; flat (0.5%) with May, up ~49% Y/Y.
  • 2Q10: $74.8B, up 7.1% from 1Q10 ($69.9
  • 1H10: $144.6B, up 50% from 1H09 ($96.1B)

Three notable changes/updates in the numbers:

— The SIA’s final numbers for May are slightly tweaked from its preliminary estimates, adding significantly to North America (~$120M).

— In Y/Y growth, the Americas again got a nice boost in June from May’s Y/Y comparison; Europe and Japan traded some percentage points and A/P remained basically flat.

— The moving three-month average is another story, and indicates an industry slowing down. Total 3mo. average growth was 7.1% in June, but that’s down from nearly 12% in May. By region, Europe went from almost 10% growth to practically flat (1%); and growth was cut in half in both Japan (4.6%) and Asia-Pacific (6.6%).

New SIA president Brian Toohey suggested that 2H10 could see a slowdown from a combination of macroeconomic factors, including "consumer confidence, job growth, and overall economic growth."

The SIA’s midyear forecast suggested ~29% growth to ~$290B. "We expect that sequential growth rates will moderate in the coming months" to arrive at that forecast peg, Toohey stated. So, with $144.6B of chip sales already in the bank through 1H10, that means the industry will have to slow to zero (flat) growth to accumulate roughly $145B in sales in 2H10. (That’s somewhat more pessimistic than a recent forecast change from IC Insights’ Bill McClean, who now sees 7% growth in 3Q and a -4% dip in 4Q.)


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