Chip market weakness lingers in second quarter

August 06, 2019 //By Peter Clarke
Chip market weakness lingers in second quarter
Global sales of semiconductors in the second quarter were 16.8 percent down on the same quarter a year before, according to the Semiconductor Industry Association. This is in part attributable to economic uncertainty related to US-China trade tension.

Second quarter 2019 sales were flat compared to the first quarter, although seasonally this is time when quarterly sales values are usually up sequentially.

Market difficulties are lingering in June despite some faint signs of an turn in the declining market in May. This is probably fuelled by reduced trade under the influence of tariffs and the prospect of more tariffs that could be applied.

The three-month average for sales in June – a proxy for the second quarter's sales – were $98.2 billion, a small increase of 0.3 percent over the previous quarter. The America's region continued to show the largest year-on-year fall in geographical semiconductor markets being down 29.5 percent compared with the same quarter a year before.

All the regions had sales contraction year-on-year but China and Japan managed to show sequential sales growth compared to the first quarter, by 6.1 and 3.7 percent respectively.

Cumulatively, year-to-date sales during the first half of 2019 were 14.5 percent lower than they were through the same point in 2018.

"At the midpoint of 2019, the global semiconductor market remains in a period of decreased sales, with revenues through June lagging the mid-year totals from last year by nearly 15 percent,” said John Neuffer, SIA president and CEO. “Year-to-year sales were down across all major regional markets and semiconductor product categories."

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

Monthly data is given by the SIA as a three-month average although 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.

Related links and articles:

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Signs of semiconductor market cycle reaching bottom

US pain continues as chip market decline deepens

US hurting under global chip market's February fall

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