Semiconductor sees strongest yearly growth since May 2022

KUCHING: January 2024 saw the global semiconductor sector recording its strongest year on year (y-o-y) sales growth since May 2022.

According to the Semiconductor Industry Association, global semiconductor sales during the month stood at US$47.6 billion versus December 2023's of US$48.7 billion.

This marked yearly sales recovery for the third consecutive month, signalling that it could be the beginning of a new upcycle. The substantial y-o-y improvement was largely driven by China, Americas, and Asia Pacific.

As the global semiconductor market is on track to recovery, the team with TA Securities Holdings Bhd (TA Research) saw that the market growth is projected to continue over the remainder of the year, with annual sales forecasted to increase by double-digits in 2024, largely fuelled by robust doubledigit growth from memory and single-digit growth from discrete, sensors, analogue, logic and micro.

"By geography, January's sales decline of 2.1 per cent month on month (m-o-m) was on the back of easing across all regions, mainly from Japan, Europe, and China," it said in its notes yesterday.

"Meanwhile, slowdown was also observed in other regions including Americas and Asia Pacific/All Other.

"According to the World Fab Forecast report, the global semiconductor capacity is expected to grow by 6.4 per cent, reaching a record high of 30 million wafers per month (wpm) in 2024.

"The growth will be mainly supported by capacity increases in leading-edge logic and foundry, applications including generative AI and high-performance computing, and end-demand recovery for chips."

Moving forward, TA Research believed that the global semiconductor industry will likely see 42 new volume fabs in 2024, mainly backed by healthy expansion from China and Taiwan.

The Chinese chip manufacturers are expected to begin the operation of 18 new fabs in 2024, with a 13 per cent yo-y growth to 8.6 million wpm.

Additionally, Taiwan is expected to register 4.2 per cent y-o-y growth to 5.7 million wpm in 2024, with an additional five new fabs to begin operation soon.

"In all, we reiterate our overweight stance on the technology sector.

"We expect the sentiment of the semiconductor sector in Malaysia to improve gradually, underpinned by an anticipated recovery in the global demand as well as increasing trade diversion opportunities as a result of the China Plus One strategy."