Key Highlights
- According to statistics released by the Semiconductor Industry Association (SIA), global semiconductor sales dropped 0.5% in September every month and down 3% compared to September 2021.
- According to the SIA’s report, September chip buying in the Americas region increased by 11.5% compared to the same month in 2021, to a total of just over $12 billion, and upticks to $4.53 billion and $4.05 billion, respectively, were seen in Europe and Japan.
- However, those gains were more than offset by the mainland Chinese market falling by 14.4% to $14.43 billion in the same time frame and a 7.7% decline to $11.97 billion in all other markets.
According to a statement issued by SIA president and CEO John Neuffer, the decline on the global semiconductor sales is the first year-on-year slowdown since January 2020. He said that the long-term market outlook remains strong as semiconductors continue to become a more significant and critical part of the digital economy.
Several indicators of a short-term decline for the world’s silicon makers exist, including the latest Intel earnings news that saw the third-quarter revenue of the company drop 20% on a year-on-year basis.
Net income for the US-based chipmaker dropped rapidly from $6.8 billion in the third quarter of 2021 to $1 billion in the most recent report, a drop of 85%.
Spend Management Startup Pleo Lays Off Nearly 15% Of Its Employees
The chip industry is seeing structural upheavals caused by shifting US trade policy toward China, supply chain disruptions caused by Russia’s invasion of Ukraine, and a prevailing view that the global economy is made for a recession, which has blunted demand.
A study unveiled earlier this month by MIT and published in the Harvard Business Review highlighted that the “vast majority” of chip manufacturing occurs in Taiwan, the People’s Republic of China, and South Korea.
The latest trade restrictions, enacted by the US Commerce Department earlier this month, are likely to cause significant problems for the Chinese domestic silicon industry, most prominently in the area of advanced chips. Experts agree that current silicon supplies have outstripped demand, even as individual markets, such as the automotive sector, struggle with continuing shortages.
Also Read: Alibaba shares fall by 20%, struggling to maintain the growth trajectory
