Global semicon sales rebound in August

SIA says the overall outlook remains stagnant.

KUALA LUMPUR: Global sales of semiconductors rose 3.5% to US$28bil (RM115.89bil) in August from a month ago, boosted by the Americas market, according to the Washington-based Semiconductor Industry Association (SIA).

The SIA said on Wednesday the increase in the August sales marked the market’s largest month-to-month growth since May 2013 and its first year-to-year growth since June 2015. July's sales came it ad US$27.1bil. 

The association, which represents the US semiconductor industry, said the sales were also up 0.5% from the US$27.9bil in August 2015.

SIA president and CEO John Neuffer said following months of sluggish global semiconductor sales, “the global market recently has shown signs of a rebound, punctuated by solid growth in August,” 

“The Americas market was particularly encouraging, topping 6% month-to-month growth for the first time in nearly three years to lead all regional markets. 

“China also stood out, posting by far the strongest year-to-year growth of all regions in August. All told, global sales are still behind last year’s pace, but appear to be on the right track as 2017 draws closer.”

Month-on-month sales increased across all regions: the Americas recorded a 6.3% increase, Japan (4.8%), China (3.1%), Asia Pacific/All Other (2.7%), and Europe (0.7%). 

Year-on-year sales increased in China (7.1%) and Japan (2.2%), but fell in Asia Pacific/All Other (-2.7%), the Americas (-3.1%), and Europe (-3.3%).

Meanwhile, MIDF Equities Research said the North America-based manufacturers of semiconductor equipment posted a book-to-bill ratio of 1.03 times in August. 

“A book-to-bill ratio of 1.03 times indicates that US$103 worth of orders were received for every US$100 of products billed for the month. Inclusive of August 2016, the book-to-bill ratio has remained at or above parity for the ninth consecutive month,” it said.. 

The research house said that based on the Semiconductor Equipment and Materials International (SEMI) report, North American equipment suppliers were benefiting from strong investments by device manufacturers in the second half of the year. 

“China has been one the main investors in this domain. We remain sanguine that the strong purchasing activity in China will continue as it is stepping up efforts to become a major player in semiconductor design and manufacturing,” said MIDF Research.

SEMI had stated the August 2016 bookings increased by 5.0% on-year to US$1.754bil.

“Bookings have been growing for five consecutive months since April 2016. We attributed this to strong purchasing activity in China. 

“Due to higher bookings, billings for the month of August 2016 also grew at a faster pace of +8.4% on-year to US$1.708bil. This represents the fourth consecutive growth since May 2016,” the SEMI report said.

MIDF Research said smartphone shipment volumes in 2Q16 grew by 0.3% to 343.3 million phones. This was just a 0.3% on-year rise from 2Q15 shipment of 342.4 million units. Much of the decline in shipment growth was attributed to lower demand from developed regions as the number of first-time buyers dwindled. 

“We expect sales of smartphone to remain lackluster in the immediate term owing to slowdown in global economy and lack of innovation in new smartphone launches. 

“On another note, we take comfort in knowing that semiconductor players remain committed in its capital spending as seen in the positive book-to-bill ratio. This would ensure that the industry will continue to grow, albeit at a slower pace. All in, we are anticipating 2016 to be a lackluster year and we maintain our Neutral stance on the sector,” said MIDF Research.