Global semiconductor industry sales in February increased by 32.4% year-on-year to reach US$52.5 billion, and 3.4% more than the January 2022 total of US$50.7 billion, according to the Semiconductor Industry Association (SIA). However, whether the growth momentum can continue depends on multiple factors.
The Omicron variant is imposing the largest uncertainty over the outlook for global supply chains and market demands. The recent lockdowns of Shanghai and Kunshan, an important manufacturing hub for panels, PCB and mechanism molds in China, will impact the supply chains if the lockdowns extend.
Logistics have also been disrupted by the lockdown measures as well, according to a DIGITIMES report quoting Taiwan manufacturers in the Kunshan area, saying that the supply chain manufacturers located there and Shanghai include those that produce key components, LCD modules, AIoT devices, packaging and assemblies, etc.
On April 5, Shanghai announced to extend its lockdown (imposed on March 28) over the city with a population of 25 million, as more than 13,000 new COVID cases were confirmed on the day before.
The war between Russia and Ukraine has limited impact on the demand side but is likely to affect semiconductor on the supply side if the war lasts more than six months due to disrupted supplies of noble gases.
In a recent webinar, analysts of Bain & Company's technology team said they expect overall chip shortage to continue, and improvements will start to be seen in the second half of this year. "But it's going to be a bumpy road into 2023, and even longer."
Bain analysts expect a lot more MCU capacity coming on in late 2022. Substrates, which are a key input into the package of a semiconductor, are causing some of the shortage on the most leading edge of technologies, such as MPUs, GPUs, some bleeding-edge ASICs, etc. Bain analysts projected that substrate shortage is to last almost into 2025.
On the demand side, 5G, Big Data, and edge computing are seen driving the need for more compute and data centers, according to Bain.
Another report issued by McKinsey pointed out that about 70% of the growth in global semiconductor market from now through 2030 is predicted to be driven by just three sectors: the automotive, computation and data storage, as well as wireless.
Global semiconductor sales remained strong in February, increasing by more than 20% for the 11th consecutive month on a year-to-year basis. Sales into the Americas continued to outpace other regional markets, increasing by 43.2% year-to-year in February. It is the second month that the Americas enjoyed growth of more than 40% from the same period in 2021.
It is notable that other regions also enjoyed very strong growth during the same period: Asia Pacific/All Other (41.4%), Europe (29.3%), China (21.8%), and Japan (21.6%), despite the fact that normally factories in Taiwan and China have fewer working days due to the Lunar lunar New Year, which happened to fall in February this year. Month-to-month sales increased in Asia Pacific/All Other (18.6%) and Europe (1.4%), but fell slightly in Japan (-1.3%), China (-2.3%), and the Americas (-3.0%).
Monthly sales are compiled by the World Semiconductor Trade Statistics (WSTS) organization and represent a three-month moving average. SIA represents 99% of the US semiconductor industry by revenue and nearly two-thirds of non-US chip firms.
Shanghai and Kunshan lockdowns are disrupting logistics and production.
Photo: AFP
