Strong semiconductor sales growth in Americas to benefit local semiconductor players
08 Jul 2022
The strong semiconductor sales growth in Americas is set to benefit local semiconductor players, but analysts also foresee current global chip shortages to persist until 2023 even as the industry ramps up capacity expansion.
AmInvestment Bank Bhd (AmInvestment Bank) recapped according to the Semiconductor Industry Association (SIA), May 2022 sales increased 18 per cent year on year (y-o-y) to US$52 billion, compared to US$44 billion in May 2021.
“On a year to date (YTD) basis, sales grew 23 per cent to US$254 billion, on track to meet World Semiconductor Trade Statistics’ (WSTS) 2022 global sales projection of US$614 billion,” the research firm said.
“Amongst regions, Americas rose the most by 37 per cent y-o-y, followed by Japan (20 per cent), Europe (16 per cent), Asia Pacific (16 per cent) and China (nine per cent). We view the strong growth in Americas to be extremely beneficial to local semiconductor players as according to SIA, Malaysia accounted for 24 per cent of all US semiconductor global trade in 2021.
“Globally, Malaysia accounted for seven per cent of total semiconductor trade flows.”
However, AmInvestment Bank foresaw current global chip shortages to persist until 2023 even as the industry ramps up capacity expansion.
“Furthermore, as the pandemic revealed the shortcomings of global supply chains, more countries are strengthening their local output.
“With China being the world’s largest consumer or importer of semiconductors, we think that the nation will be most aggressive in capacity expansion as the government has committed to supply 70 per cent of its chip demand locally by 2025, up from just 17 per cent in 2021.”
The research firm also continued to see critical supply-demand imbalances in automotive chips.
“Reportedly, several US automakers are shipping vehicles with compromised functions and features, committing to install chips to drivers once supplies become more readily available.”
On the outlook for 5G smartphone demand, AmInvestment Bank said that it was uninspiring.
“While global smartphone shipments are expected to dip 5.8 per cent y-o-y in 2022, Greater China’s shipments could drop further by 18 per cent y-o-y, mainly from slower 5G smartphone demand.
“According to Gartner, China’s zero-Covid policy and resulting lockdowns have softened demand for non-essential items such as 5G smartphones.
“Globally, 5G smartphone penetration has reached 73 per cent for North America and 76 per cent for Western Europe as at January 2022, a dramatic increase since Apple introduced 5G with its iPhone 12 series.”
The research firm expected slower growth to persist from the smartphone segment as higher 5G smartphone penetration could mean lower demand for upgrades from 4G.
Source: The Borneo Post