Chip sales struggle amidst soft demand, market malaise

Article By : Dylan McGrath

Global chip sales hit ₹ 1.74 lakh crore in May, an increase of 0.4% from April. It was the largest month-to-month increase in chip sales in six months.

Semiconductor sales showed a modest sequential uptick in May, but remained hamstrung by soft demand and global economic malaise, according to the Semiconductor Industry Association (SIA) trade group.

Global chip sales hit ₹1.74 lakh crore ($26 billion) in May, an increase of 0.4% from April, the SIA said. It was the largest month-to-month increase in chip sales in six months, the SIA (Washington) said.

However, the May total was still 7.7% lower compared with sales of ₹1.88 lakh crore ($28.1 billion) in May 2015.

Sales held relatively steady month-to-month across all regions, the SIA said. Sales in China showed the highest sequential growth, 3.1%.

"Most regional markets have struggled to gain traction in 2016, with the Americas falling well behind sales posted through the same point last year,” said John Neuffer, SIA’s president and CEO, in a statement. “Sales of analogue products were a bright spot in May, notching both month-to-month and year-to-year increases.”

The SIA said last month that it now expects chip sales to decline by 2.4% in 2016 compared with 2015. The trade group, which reports sales figures gathered by the World Semiconductor Trade Statistics (WSTS) organisation, acknowledged that it is expected to be a down year for chips after the WSTS updated its forecast. All major market research firms that cover the semiconductor industry are also calling for an annual sales decline.

Chip sales in the Americas region declined by 0.1% month-to-month, while sales in Europe and the Asia-Pacific region each declined by 0.8%, the SIA said. Sales in Japan declined 1.8% sequentially, according to the trade group.

On a year-to-year basis, sales were down by 15% in the Americas region, 11.5% in the Asia-Pacific region and 8.8% in Europe. Chip sales in Japan increased sequentially by 0.4%, the SIA said.

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__Figure 1:__ *Global semiconductor sales in millions of dollars*

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