Global chip sales in November increased by 7.4 percent year-over-year to reach $31 billion—the largest gain since January of 2015. Semiconductor sales also grew by 2 percent over October’s level of $30.4 billion, according to the Semiconductor Industry Association (SIA).
Although December data has not yet been released there are indications that 2016 may be better than expected for chip makers. Overall manufacturing activity in the U.S. reached its highest level in December since 2014, according to the Institute for Supply Management, fueled in part by exports. The ISM’s leading index, the PMI, reached 54.7 percent in December, while new orders for exports increased by 4 percent to 56.0. Any number over 50 indicates the market is expanding.
In 2015, U.S. semiconductor company sales totaled $166 billion, according to the SIA.
Although chip sales in the Americas increased only modestly during November – by 3.2 percent over the prior year – demand in other regions was more robust. Year-to-year sales increased in China by 15.8 percent; Japan by 8.2 percent; and Asia Pacific/other by 4.8 percent; but fell slightly in Europe by 1.6 percent. Month-to-month sales increased modestly across all regions: in the Americas by 3.3 percent; China by 2.7 percent; Europe by 2.5 percent; Asia Pacific/other by 0.7 percent and Japan by 0.4 percent.
November’s jump in sales could bring the global semiconductor market to parity with 2015 levels, SIA executives said. "Global semiconductor sales continued to pick up steam in November, increasing at the highest rate in almost two years and nearly pulling even with the year-to-date total from the same point in 2015," said John Neuffer, president and CEO of the SIA, in a statement. Many market-watchers this past year had predicted a decrease in global chip sales in 2016. The November sales data indicates the global market could reach $335 billion for the year, roughly flat compared with 2015.
"The Chinese market continues to stand out, growing nearly 16 percent year-to-year to lead all regional markets,” Neuffer added. “As 2016 draws to a close, the global semiconductor market appears likely to roughly match annual sales from 2015 and is well-positioned for a solid start to 2017."
A similar view was expressed by Brad Holcomb, chairman of the ISM’s Manufacturing Business Survey Committee. Holcomb said that uncertainty around the U.S. presidential election has finally abated and consumer confidence is high. “We closed the year with people feeling good about the business environment,” he said. “Barring any unforeseen circumstances, 2017 should be a good year."
The SIA's monthly sales numbers are compiled by the World Semiconductor Trade Statistics (WSTS) organization and represent a three-month moving average.