News briefing

According to the announcement made by US Semiconductor Industry Association (SIA) on April 6, the sales volume of global semiconductors fell to $39.7 billion in February - a sharp drop of 20.7% from the recorded sales volume of $50 billion during the same period last year. This is the largest recorded volume of shrinkage since 2009. Furthermore, if the recorded volume of sales is measured month on month, sales volume in February was also reduced by 3.9% against a recorded $41.3 billion in January.

 

Impact analysis

Although the sales volume of global semiconductors hit a record high of $574.1 billion in 2022, there has been a downward trend from the second half of last year, and it has been declining for six consecutive months. The main reason for the decline can be attributed to the decreasing popularity of consumer electronics such as computers and mobile phones which has led to a sag in the market which in turn has dragged down the demand for chips. Among them, the memory market has been hit the hardest. The prices of DRAM and NAND Flash memory chips, which soared tremendously in popularity during the epidemic, have plummeted significantly in recent days. As a result - Samsung, the world's largest memory chip maker, witnessed its revenue drop by 19% year-on-year in the first quarter of 2023 and its operating profit declined by 96% year-on-year, being the lowest since 2019. To sustain chip prices, Samsung, SK Hynix, and Micron have jointly implemented production cuts. On the other hand, the manufacturing business for high-end wafers has also displayed bleak prospects. Because of this, it was rumored that Apple had temporarily suspended the production of M2 series processors from January to February this year. Although production was resumed in March, the output fell to less than half against that of the same period last year. As a result, this has rendered the utilization rate of the nanometer production capacity of TSMC for 7nm and 6nm lower than anticipated, making its consolidated revenue in the first quarter reach only 508.6 billion New Taiwanese Dollars, and this figure was markedly lower than that of the previous financial forecast.

Since the market of the semiconductors industry has displayed such a slump, it is hard for the PCB industry to boom well by itself. In addition to mobile phones and computers, the two main PCB markets in Taiwan remain in the doldrums. The substrate, which has driven industry growth in the past, has also exhibited a decline in the first quarter of this year, and this is again the first quarter to be found with negative growth since 2019. To trace the root cause, it can be surmised that the past epidemic has already depleted consumers' demand for end products, whereas the environment of high inflation, as well as high-interest rates, has further inhibited the recovery of the global economy. As such, it is suggested that manufacturers should, on one hand, wait for the market demand to pick up, but also dynamically adjust layout planning as they persistently invest in high-end technology development to maintain competitiveness. By utilizing this strategy, the growth momentum can be regained after the terminal inventory is successfully depleted in the second half of the year.

 

Sourse:SIA