Faint signs of chip market turn as slump continues

Faint signs of chip market turn as slump continues
Market news |
The chip market slump that has taken hold in 2019 continued in July with the three-month average of global chip sales 15.5 percent down on the same period a year before, according to the Semiconductor Industry Association.
By Peter Clarke


The chip market slump is attributable to multiple causes including the end of a high-priced memory cycle, a slowing of consumer electronics replacement cycles effecting smartphone and other sales, and US-China trade tension.

The only minor comfort in the figures is that the contraction in the market is slightly smaller than it was in June after a rising throughout 2019.

The three-month average for sales in July were $33.37 billion compared with $39.5 billion in the same period a year before. The America’s region continued to show the largest year-on-year fall in geographical semiconductor markets being down 27.8 percent. All the regions suffered contractions in sales year-on-year but with Europe suffering the least dip at 8.6 percent.

“While global semiconductor sales in July were once again down on a year-to-year basis, month-to-month sales were up slightly,” said John Neuffer, SIA CEO, in a statement. “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.”

Three-month average of chip sales by geographic region for June and July 2019. Source: SIA/WSTS.

Monthly data is given by the SIA as a three-month average although the source of the data, the WSTS organization, tracks actual monthly data. The SIA and other regional semiconductor industry bodies opt to use averaged data because it evens out the actual data that typically shows troughs at the beginnings of quarters and peaks at the ends of quarters.

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