The semiconductor imports by China have seen a modest decline in the month of April, falling from the all time high that the region recorded last month. The news arrives amid the booming sales of chips across the globe.According to an SCMP report, the latest figures were revealed by the nation’s customs authorities, as the shortage of semiconductors affect various industries worldwide. As per data released by the General Administration of Customs, China shipped 54.7 billion semiconductor units in April alone. These were worth 33.1 billion US Dollars. This marked a slight decline of 7 percent quarter on quarter, falling from 58.9 billion semiconductor units shipped in March 2021.

However, it was still a 23 percent surge when compared to the same month from back in 2020, which had imports worth 27 billion US Dollars from 44.4 billion units. Notably, the country’s semiconductor imports are also up by 30.8 percent this year compared to the same period last year. Shipments during this time reaching 210 million units, being valued at 126 billion US Dollars in just the first four months. This news arrives as the world faces a global semiconductor shortage that has caused issues in production of automobiles, smartphones, computers, and even home appliances as well.

Back in 2020, the global semiconductor market’s revenue had risen by 10.8 percent, reaching 464 billion US Dollars. This is expected to further grow this year due to accelerated demands for chips despite the ongoing shortage. It is expected that the industry will see a 12.5 percent growth overall, reaching 522 billion US Dollars this year thanks to growth in consumer products, computing, 5G, and automotive applications as well.

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The overall shipments of semiconductors are expected to cross the 1 trillion unit mark this year. This includes shipments of ICs along with optoelectronics, sensor/actuator, and discrete (O-S-D) devices.

According to a DigiTimes report, the semiconductor shipments will rise by 13 percent in 2021, reaching a record high of 1.135 trillion units. This would also be the third time that semiconductor units have surpassed the one trillion mark in a calendar year. Furthermore, the 13 percent rise that arrives a year after the coronavirus pandemic had adversely impacted the global economy and affected shipments for the industry as well.

Back in the period between 2004 and 2007, the shipments broke through the 400, 500, and 600 billion unit levels, just before the global financial meltdown led to a sharp fall in shipments in 2008 and 2009. Since then, the industry and the shipments bounced back strong, with 2010 seeing shipments surpass 700 billion units. Since then, another strong increase was back in 2017, with a 12 percent growth that had it reach 900 billion units.

The first time shipments crossed the one trillion unit mark was back in 2018. Notably, the news also arrives despite the world suffering from a major shortage of semiconductors. This has caused various industries like the automobile industry. On the other hand, the growth of the shipments saw industries like autonomous systems, cloud computing systems, contactless systems, and more see the strongest rise.

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The expenditure on fab equipment has increased by 16 percent year on year in 2020, as per a new report. This is also expected to carry forward in this year, with spending expected to rise by 15.5 percent in 2021.

According to TheElec report, the rise of 15.5 percent in this year will have the expenditure reach over 70 billion US Dollars. Furthermore, the percentage of rise is expected to fall to 12 percent in 2022, reaching a total value to just over 80 billion US Dollars. Between the three year period between 2016 and 2018, fab equipment spending saw a notable increase due to a ‘super cycle’ in the semiconductor industry, which marked the first time spending for three straight years since the mid 1990s.

Additionally, the focus of the expenditure will be on foundry and memory. The spending in foundry equipment is also expected to increase by 23 percent this year as well, reaching 32 billion US Dollars. Although, these expenditures are expected to remain flat in 2022. Talking about memory, spending is expected to reach 28 billion US Dollars in 2021, which would be mark about a single digit growth from last year.

Similarly, the expenses on DRAM is expected to surpass those for NAND flash memories as well. Meanwhile, the spending will increase by 26 percent next year, due to investments expected to rise for both DRAM and NAND flash in 2022. The trend will also be reflected in the power semiconductors and microprocessor units, with the former expected to see a 46 percent rise this year and 26 percent in 2022 while the latter expected to record a 40 percent rise in 2022.

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The semiconductor sales rose by 6.5 percent overall across the globe last year. The main recovery of the chip sales arrived after the final quarter saw a strong performance that offset the initial sharp decline of the industry owing to the Coronavirus pandemic.

According to a Reuters report, the global chip sales in 2020 reached 439 billion US Dollars, out of which, 208 billion US Dollars or about 47 percent of all sales were from US chipmakers. Notably, chip sales in the US alone accounted for 94.15 billion US Dollars, which is up by 19.8 percent year on year over 2019, as per information from Semiconductor Industry Association (SIA).

As per Falan Yinug, director of industry statistics and economic policy at SIA, the primary reason for the chip sales rise in the US was driven by the rising demand for high end memory chipsets that are used in applications like data centers. This was further backed by major American tech giants like Microsoft, Amazon, and Google seeing a surging rise in demand in the use of cloud computing during last year as business shifted towards the digital realm for online education to even remote working.

Despite American firms accounting for nearly half of all semiconductor sales during this time, the companies only represented about 12 percent of the chip manufacturing capacity in 2020. This marks a decline from 37 percent in 1990, after most US based companies now outsource their chips to factories established in Asia. John Neuffer, president and chief executive of the industry group also added that “Over the next 10 years, semiconductor manufacturing is going to grow 56 percent. We want to make sure we’re getting a bigger piece of the manufacturing pie.”

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The sales of semiconductors are expected to grow across the globe. Back in November 2020, semiconductor sales reached 39.4 billion US Dollars, which is up from 7 percent year on year.

According to an SIA report (Via DigiTimes), “Global sales of semiconductors continued to rise in November, increasing on a year-to-year basis by the highest percentage since March. Annual sales in 2020 are tracking well ahead of the total from 2019, despite substantial headwinds caused by the pandemic and other macroeconomic factors,” as per John Neuffer, SIA president and CEO.

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He further added that, “Sales into the Americas remained strong in November, increasing year-to-year by a double-digit percentage for the eleventh consecutive month.” The report states that sales of semiconductors had risen by 14.2 percent year on year in the Americas during November, while sales in China rose by 6.3 percent and grew by 5.3 percent in the Asia Pacific/All Other regions.

Despite most areas regions seeing growth, sales in Japan and Europe declined by 1 percent and 4.8 percent respectively. The sales of semiconductors in November also marked an increase across every region, on a month on month basis. This includes the growth of 6 percent in Europe, 3.2 percent in Americas, 2.9 percent rise in China, the Asia Pacific/All other regions saw a 2.8 percent raise, and finally Japan with a surge of 1.6 percent as well.

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The prices of semiconductors are expected to rise due to shortages in production capacity in comparison to their demand. This has already caused certain companies to inform their customers about the increase in prices.

According to TheElec report, the world’s largest contract chip maker, TSMC, recently reversed its price cut policy for its major customers, due to the higher demands. Furthermore, this is also reflected in the actions of other foundry based firms like GlobalFounderies, which reportedly is operating all of its fabs at near 100 percent capacity. The South Korean tech giant, Samsung Electronics, is apparently also in a similar position at the moment.

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Other chipmakers in Taiwan, including UMC and VIS, have also increased chip production prices, and in the case of DB HiTek from South Korea, prices have hiked as high as 20 percent despite their fabs running at 100 percent capacity. Thus, the shortages of supply in the market are expected to cause a rise in memory and semiconductor systems prices.

Similarly, the fixed prices of DRAMs are also expected to rise by around 5 percent in the first quarter of 2021. These chips spot prices were around 3.46 US Dollars back in December 2020, marking a rise of 30 percent from November 2020. This price hike also being witnessed by Chinese companies like Goodix, and LCD components makers like Novatek.

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The chip exports from South Korea to China are expected to take a hit after recent US sanctions were adopted against Huawei. This is likely due to South Korea’s heavy reliance on the neighboring country.

According to a YonhapNewsAgency report, the recent regulations that sought to ban Huawei from sourcing semiconductors that were made using US technology, software, or design, might affect the overall South Korean chip export to China. For those unaware, the new sanctions now require suppliers to acquire a special license to supply Huawei, which is granted by the US government.

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This move affects Samsung Electronics, the world’s largest memory chipmaker, and SK Hynix, by having them stop sending semiconductor shipments to the Chinese company. Huawei is one of the top five customers for Samsung, while SK Hynix reportedly depends on the Chinese tech giant for over 10 percent of its total sales. Thus, the issue has a far more outreaching effect than just pressuring Huawei.

Industry sources close to the matter stated that South Korean exports will likely take a hit after recent US sanctions, due to their dependence on China. Reports have indicated that China accounted for 41 percent of all South Korean chip export in the first seven months of this year and was valued at 22.49 billion US Dollars. Similarly, Hong Kong came second in this regard, being evaluated at 11.38 billion US Dollars.

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Samsung and Huawei are both competitors in the field of consumer-related products. But regardless of this, both companies are business partners as well with the latter representing a huge source of revenue for the former. This is especially true in the semiconductor business where Samsung particularly specializes in. But according to a new report, the South Korean tech giant might soon lose the revenue stream from Huawei in the arriving couple of years.

Notably, Samsung’s top five biggest clients at the end of Q4 2019 were companies like Apple, Best Buy, Deutsche Telekom, Verizon, and Huawei. Each of these companies also represents different areas where Samsung specializes in, like smartphones, semiconductors, displays, 5G networking and more.

Historically, Huawei has relied on Samsung’s semiconductor business for DRAM and NAND flash memories for its smartphones. However, this may come to an end due to the new Chinese Government initiative to encourage local industries and minimize reliance on imported components in the next 5 years. This marks a major shift in China’s manufacturing field by the year 2025.

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China Manufacturing 2025 is favorable to companies like Huawei, helping them become more self-sufficient in the next couple of years. This will also help in reducing its reliance on Samsung, who may suffer a huge blow in the wake of this market shift, particularly in the semiconductor segment. Meaning, the South Korean company will lose a large source of revenue which would take time to recover from.

Huawei has seen great success in the Chinese smartphone market (which is the largest market for handsets) which has also led to Samsung enjoying a healthy source of revenue in recent years. But if Huawei adopts local alternatives, Samsung might be in trouble. Fortunately, Samsung also has Intel as one of its clients in the semiconductor field which has become an important client recently with the production of 14nm CPU chipsets being manufactured in Samsung’s facilities.

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(Via)

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The Semiconductor Industry Association (SIA) has announced that the worldwide sales of semiconductors have reached $98.2 billion during the second quarter of 2019. This represents a small increase of 0.3 percent over the previous quarter.

However, the numbers also indicate a 16.8 percent decline compared to the second quarter of last year. Global sales for the month of June 2019 were $32.7 billion, a decrease of 0.9 percent compared to last month’s total of $33.0 billion, and 16.8 percent less than the June 2018 total of $39.3 billion.

Cumulatively, year-to-date sales during the first half of 2019 were 14.5 percent lower than they were through the same point in 2018. However, the report says that when looking at regions, sales increased on a month-to-month basis in Japan (2.6 percent), but decreased in America (-0.7 percent), the Asia Pacific/All Other (-0.7 percent), China (-1.5 percent) as well as in Europe (-2.6 percent).

John Neuffer, SIA president and CEO, said: “At the midpoint of 2019, the global semiconductor market remains in a period of decreased sales, with revenues through June lagging the mid-year totals from last year by nearly 15 percent. Year-to-year sales were down across all major regional markets and semiconductor product categories. One silver lining was that sales during the second quarter of 2019 narrowly outpaced sales during the first quarter.”

On a year-to-year basis, sales were down across all regional markets. While Europe registered a decline of 10.9 percent, Japan registered a decline of 12.8 percent. The Asia Pacific and all other region reported a 13.7 percent decline while China and the USA reported a decline of 13.9 percent and 29.5 percent respectively.

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