Semiconductor demand down


PETALING JAYA: Semiconductor sales have been losing momentum, with macroeconomic headwinds starting to weigh on demand, especially out of China due to Covid-19 lockdowns.

Global chip sales in July fell 2.3% month-on-month to US$49bil (RM220bil), the second consecutive month of moderating sales after the record US$51.8bil (RM233bil) in May.

This was as sales in all regions were softer, with the exception of Japan and Europe, according to the World Semiconductor Trade Statistics Organisation’s (WSTSO) latest report.

On a year-on-year (y-o-y) basis, July sales were up 7.3%, which is the lowest growth rate since December 2020, albeit after 30 consecutive months of y-o-y growth.

Year-to-date chip sales are up 14.4% y-o-y to US$346.7bil (RM1.56 trillion) and on track to meet the WSTSO’s 2022 sales forecast of US$633.2bil (RM2.85 trillion), which is slightly lower than the US$646.5bil (RM2.91 trillion) sales forecast earlier.

Sales for 2023 have also been forecast to grow at a much lower rate of 4.6% y-o-y to US$662.4bil (RM2.98 trillion).

Based on the prospects for sustained growth of the sector moving ahead, TA Research has maintained its “overweight” stance on the semiconductor sector, with a “buy” call on companies like Inari Amertron Bhd (target price or TP of RM3.30), Unisem (M) Bhd (TP: RM3.50) and Malaysian Pacific Industries Bhd (TP: RM36.80).

“We favour players that offer near-term resilience and growth prospects,” it said.

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