For those investors and technology fans who were hoping for a rapid rebound in the global semiconductor market, it seems as though the hope is going to have to take a backseat to reality. The Semiconductor Industry Association has released data from the summer showing that global sales of semiconductor have decreased by 15.5% covering July of 2019 versus the prior year. Those global chip sales did actually manage to increase by a slight amount on a month-to-month basis, but the data from the prior year was lower in all regions the SIA tracks.
Worldwide sales were $33.4 billion in semiconductor products in 2019. That’s up just 1.7% from the $32.8 billion total from the report covering June of 2019, but the 15.5% drop from the July 2018 total of $39.5 billion should tell the larger story here.
Perhaps the only saving grace here is that the data released represents a three-month moving average. On a month-to-month basis, sales in Asia Pacific/All Other rose by 3.1% and they rose by 2.5% in the Americas. China saw only a 1.1% gain and Japan saw just a 0.7% gain from the monthly reports, but Europe showed a decrease of -0.5%. On a year-over-year basis. The 27.8% drop in the Americas was the worst — followed by drops of 14.1% in China, 12.0% in Japan, Asia Pacific/All Other down 11% and Europe down 8.6%.
To put the importance of China in context ahead of tariffs and industry targeting the monthly sales data of $11.85 billion comes to a global share of about 35.5% of the total $33.37 billion market for the month.
Maybe it’s possible to look at this as good news on the monthly data by ignoring the annual changes. That said, the tariffs on goods are just now starting to kick into higher gear and the U.S. China trade war seems to not be going anywhere very fast. This trade and intellectual property issue is also going to make it more difficult for industry forecasters to use traditional lead times and historical inferences on predicting when a great recovery will be coming.
John Neuffer, president and CEO of the Semiconductor Industry Association, said of the report:
While global semiconductor sales in July were once again down on a year-to-year basis, month-to-month sales were up slightly. Month-to-month sales increased modestly across most regional markets in July, with Asia Pacific and the Americas posting the largest gains, although sales into the Americas remained down on a year-to-year basis.