Semiconductor sales growth from China to remain robust
KUALA LUMPUR: Semiconductor sales growth in China will stay upbeat robust in the foreseeable term, according to the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research).
In a technology sector update, the research arm said at present, the greater China market is the main export destination of Malaysian semiconductor products while also accounting for one third of global sales.
This – coupled with the increasing support and capital budgets the Chinese government has given its domestic semiconductor industry in recent years – has led to the greater China market gradually becoming a pivotal role in upholding the demand of semiconductor products.
And with no foreseeable changes to this development, MIDF Research expect sales growth momentum from China to soldier on while pushing global semiconductor sales (GSS) to continue recording positive sales growth on a year over year (y-o-y) basis.
In tandem, the research arm also anticipates heavy investment in fab equipment in the upcoming years and higher
Inclusive of this, the monthly GSS has come in above US$30 billion for eight consecutive months. MIDF Research
demand for the storage market as it continues to be supported by the cloud computing and data centre industries.
Currently, monthly GSS have grown at a faster pace of more than 20 per cent y-o-y for two consecutive months as May 2017 GSS figures saw a 22.6 per cent yo-y increase to US$31.9 billion.
“Inclusive of this, the monthly GSS has come in above US$30 billion for eight consecutive months,” reported the research arm.
This increase in semiconductor sales were purported to stem from a surging demand from the memory products segment and has affected markets worldwide as they continue to post strong double digit growth.
On a y-o-y basis, the Americas region grew at a pace of 30.5 per cent y-o-y, followed by China with 26.3 per cent y-o-y, Europe with 18.3 per cent y-o-y, Asia Pacific with 17.7 per cent y-o-y and Japan with 15.8 per cent y-o-y.
Meanwhile, beyond the smart devices segment, the research arm is also expecting a healthier demand from the automotive, storage and healthcare markets as well.
“The automotive market will be driven by the continuous efforts to increase the average semiconductor content per vehicle.
“Demand from this market is also less susceptible to seasonality factors, thus providing a steadier stream of revenue,” the research arm opined.
All factors considered, the research arm maintained its positive stance for the technology sector with an expectation that it will continue to be underpinned by demand from the Greater China market.