Record monthly sales a boon for semiconductor sector
KUCHING: Worldwide sales of semiconductors grew strongly in June this year, buoyed by healthier demand from the automotive, storage and healthcare markets and overall leading to a positive stance on the sector in Malaysia.
MIDF Amanah Investment Bank Bhd ( MIDF Research) saw that June’s worldwide sales of semiconductors grew strongly by 23.7 per cent year on year (yo-y) to US$ 32.6 billion. Such pace of sales growth was last seen in September 2010 when sales increase by 25 per cent y- o-y.
“This also marks the highestever sales recorded for the month of June,” it said in a note yesterday. “Inclusive of this, global semiconductor sales (GSS) has been growing on a year- overyear basis for the past 11 months since August 2016.
“Notably, the GSS has been growing at a faster pace of more than 20 per cent y- o-y for the past three consecutive months since April 2017.”
All markets posted strong double digit growth on an annual basis of at least 18 per cent y- o-y, MIDF Research added. The American market was particularly robust, growing by 33.4 per cent y- o-y to US$ 6.6 billion. This was followed by China at 25.5 per cent y- o-y.
Cumu l at ive ly, globa l semiconductor sales fir the first half this year amounted to US$187.9 billion -- an increase of 20.8 per cent y- o-y. This is within the World Semiconductor Trade Statistics’ ( WSTS) expectation, accounting for 49.7 per cent of full year 2017 sales forecast of US$ 377.8 billion.
To recall, the healthy increase was partly driven by lower volume order in 1H2016 which was caused by elevated inventory levels as well as strong dollar in some regions.
This led MIDF Research to expect stronger months ahead.
“Historically, positive June month- over-month growth in 2016 and 2014 led to a very strong second half. On the contrary, negative June month-over-month growth in 2015, 2012 and 2011 led to a stagnant second half.
“Taking cue from June 2017 sales which grew by teo per cent month- on-month (m- o-m), we are expecting that the monthly semiconductor sales should increase steadily throughout 3Q2107 before tapering off toward the end of the year.
“Premised on this, we do not discount the possibility that there could be further upward revision for full year 2017 sales projections.”
Moving forward, the research house expect sales growth momentum emanating from China to remain robust in the foreseeable term.
This is in-tandem with the anticipated heavy investment in fab equipment in the upcoming years, it said.
“In the immediate term, we expect the global semiconductor sales to continue to record positive sales growth on a yearover-year basis. Our view is reinforced by June 2017 sales f igure which remained encouraging.
“Apart from the smart devices segment, we also expect healthier demand from the automotive, storage and healthcare markets. The automotive market will driven by the continuous effort 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. Meanwhile, higher demand for the storage market would be supported by the cloud computing and data centre industries.
“All factors considered, we maintain our positive stance for the technology sector.”