Global chip market still falling

August 16, 2016 // By Peter Clarke
A slower rate of annual decline in the global semiconductor market in June did not prevent most regions recording smaller sales than for the same period a year before. China was the only market to grow year-on-year and Japan, which had been doing well in relative terms in the last few months, slipped back in June to an annual decline.

The global three-month averaged chip market in June was worth $26.36 billion, down 5.8 percent from the same period a year before, according to the European Semiconductor Industry Association (ESIA) reporting numbers from the World Semiconductor Trade Statistics (WSTS) organization. The year-on-year fall was smaller than the 7.7 percent decline recorded in May (see Falling sales raise prospect of chip market recession).

In June the Asia-Pacific region, which is responsible for more than 60 percent of the global chip market continued to show an annual decline in the three-month average for chip sales, increasing the likelihood that 2016 will be a declining market for semiconductor sales.

The aggregate global chip market for the first half of 2016 is 5.8 percent smaller than where it was in 2016 although this could change if the industry can pull out a bumper third quarter, the quarter that is seasonally largest as vendors prepare for the winter consumer buying season that runs from US Thanksgiving through Christmas and on to the Chinese New Year.

However continued weakness in the PC and smartphone markets and the failure of a wearable or IoT market to yet take off significantly makes that unlikely.

Three-month average of sales for June and May 2016. Source: ESIA/WSTS.