Chip sales are set to cool more than previously expected as the global economy struggles under the weight of rapid interest rate increases and rising geopolitical risks, fueling fears of a recession.
World Semiconductor Trade Statistics (WSTS), a non-profit body that tracks shipments, lowered its market outlook to 13.9 percent growth this year from 16.3 percent. For next year, it sees chip sales rising just 4.6 percent, the weakest pace since 2019.
The market is still expected to surpass US$600 billion this year, WSTS forecast. Next year’s forecast growth would be the weakest since a 12 percent drop in sales at the height of the US-China trade dispute.
Photo: Reuters
Chip sales are an important indicator of global economic activity as households and firms increasingly rely on digital devices and online services to consume and expand.
US President Joe Biden this month signed the so-called CHIPS and Science Act aimed at strengthening the US semiconductor industry as China races to expand its own chipmaking capacity.
Japan is likely to see the strongest sales growth at 5 percent next year, followed by the Americas at 4.8 percent and the Asia-Pacific region at 4.7 percent, WSTS said. Europe, where Russia’s invasion of Ukraine is reverberating across the continent’s economy, is likely to post an expansion of just 3.2 percent.
Based in Morgan Hill, California, WSTS includes among its members Texas Instruments Inc, Samsung Electronics Co, Sony Semiconductor Solutions Corp and Yangzhou Yangjie Electronic Technology Co (揚州揚傑電子科技), according to its Web site.
Separately, US-based market information advisory firm IC Insights yesterday said it has adjusted its global semiconductor capital expenditure forecast this year to grow 21 percent year-on-year to US$185.5 billion, compared with the previous estimate of a 24 percent increase to US$190.4 billion it made at the beginning of the year.
The downward adjustment came as the semiconductor industry faces soaring inflation and a rapidly decelerating worldwide economy, causing many semiconductor manufacturers to re-evaluate their aggressive expansion plans, IC Insights said in a press release.
“Several (but not all) suppliers — particularly many leading DRAM and flash memory manufacturers — have already announced reductions in their capex [capital expenditure] budgets for this year,” it said. “Many more suppliers have noted that capital spending cuts are expected in 2023 as the industry digests three years of robust spending and evaluates capacity needs in the face of slowing economic growth.”
Despite the downward adjustment, the revised capital expenditure forecast for this year still represents a new record high and would mark the first three-year period of double-digit gains in the semiconductor industry since 1993 to 1995, IC Insights said.
Additional reporting by Chen Cheng-hui
Nvidia Corp chief executive officer Jensen Huang (黃仁勳) on Monday introduced the company’s latest supercomputer platform, featuring six new chips made by Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), saying that it is now “in full production.” “If Vera Rubin is going to be in time for this year, it must be in production by now, and so, today I can tell you that Vera Rubin is in full production,” Huang said during his keynote speech at CES in Las Vegas. The rollout of six concurrent chips for Vera Rubin — the company’s next-generation artificial intelligence (AI) computing platform — marks a strategic
Enhanced tax credits that have helped reduce the cost of health insurance for the vast majority of US Affordable Care Act enrollees expired on Jan.1, cementing higher health costs for millions of Americans at the start of the new year. Democrats forced a 43-day US government shutdown over the issue. Moderate Republicans called for a solution to save their political aspirations this year. US President Donald Trump floated a way out, only to back off after conservative backlash. In the end, no one’s efforts were enough to save the subsidies before their expiration date. A US House of Representatives vote
REVENUE PERFORMANCE: Cloud and network products, and electronic components saw strong increases, while smart consumer electronics and computing products fell Hon Hai Precision Industry Co (鴻海精密) yesterday posted 26.51 percent quarterly growth in revenue for last quarter to NT$2.6 trillion (US$82.44 billion), the strongest on record for the period and above expectations, but the company forecast a slight revenue dip this quarter due to seasonal factors. On an annual basis, revenue last quarter grew 22.07 percent, the company said. Analysts on average estimated about NT$2.4 trillion increase. Hon Hai, which assembles servers for Nvidia Corp and iPhones for Apple Inc, is expanding its capacity in the US, adding artificial intelligence (AI) server production in Wisconsin and Texas, where it operates established campuses. This
US President Donald Trump on Friday blocked US photonics firm HieFo Corp’s US$3 million acquisition of assets in New Jersey-based aerospace and defense specialist Emcore Corp, citing national security and China-related concerns. In an order released by the White House, Trump said HieFo was “controlled by a citizen of the People’s Republic of China” and that its 2024 acquisition of Emcore’s businesses led the US president to believe that it might “take action that threatens to impair the national security of the United States.” The order did not name the person or detail Trump’s concerns. “The Transaction is hereby prohibited,”
RSS