PETALING JAYA: It looks like its good news for the semiconductor sector with the World Semiconductor Trade Statistics organisation raising its global semiconductor sales forecast for this year, backed by a healthy growth trajectory.
Factors contributing to such optimism include an acceleration in digitalisation for businesses, which inadvertently will require more chips produced by the sector.
In its report, TA Securities said it was reiterating its “overweight” stance on the semiconductor sector.
The research house noted that in April 2021, global semiconductor sales advanced a further 1.9% month-on-month and 21.7% on a year-on-year (y-o-y) basis to US$41.9bil (about RM173bil).
“Effectively, it was also the 15th consecutive month sales grew on a y-o-y basis.
“In tandem with the robust growth trajectory, the World Semiconductor Trade Statistics organisation has raised its global semiconductor sales forecast for 2021 from US$488.3bil (RM2.01 trillion) to US$527.2bil (RM2.17 trillion), ” TA pointed out.
“We continue to favour outsourced assembly and test providers including Inari, Unisem, and MPI for their strong sales pipelines and earnings growth prospects.
“We view that they are well positioned to benefit from the strong chip demand fuelled by accelerating digitalisation amid the Covid-19 pandemic, emerging trends including 5G rollout, and prospects of a global economic recovery, ” said the research house.
Still, it noted risks to such expectations include a prolonged pandemic weighing on economic growth and sentiment as well as a prolonged and heightened trade war, weaker-than-expected sales and a weaker US dollar in which most chip sales are made.
In its latest press release posted on its website, international body Semiconductor Industry Association (SIA), quoting its president and CEO John Neuffer, said: “Global demand for semiconductors remained high in April, as reflected by rising sales across a range of chip products and throughout each of the world’s major regional markets.”
“The global chip market is projected to grow substantially in 2021 and 2022 as semiconductors become increasingly integral to the game-changing technologies of today and the future, ” he said in the press release.
The SIA in the same release also noted that it had endorsed the WSTS Spring 2021 global semiconductor sales forecast, which projects the industry’s worldwide sales to be at US$527.2bil (RM2.17 trillion) in 2021, a 19.7% increase from the 2020 sales total of US$440.4bil (RM1.81 trillion).
WSTS projects year-to-year increases in Asia Pacific (23.5%), Europe (21.1%), Japan (12.7%), and the Americas (11.1%), it said.
In 2022, the global market is projected to post slower – but still substantial – growth of 8.8%, SIA said.
According to the release, WSTS tabulates its semi-annual industry forecast by gathering input from an extensive group of global semiconductor companies that provide accurate and timely indicators of semiconductor trends.