Semiconductors

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Market analysis

All the companies tracked reported negative revenue growth in Q4 2015 except for Intel which reported a marginal growth of 1%. The average decline annually was 8%. On a sequential basis, revenues dropped by 2%. Intel and Qualcomm reported revenue growth of 3% and 6%, respectively, on a sequential basis.

The global semiconductor industry registered total sales of US$335.2 billion in 2015, a dip of 0.2% compared to last year’s total sales. Global sales for the month of December 2015 reached US$27.6 billion, down 4% compared to the previous month and 5% lower than sales from December 2014. Q4 2015 sales of US$82.9 billion were 5.2% lower than the total of US$87.4 billion from the fourth quarter of 2014.

Some of the major semiconductor products that stood out in 2015 were logic (US$90.8 billion sales) comprising 27% of the total semiconductor market, memory (US$77.2 billion sales) and micro-ICs (US$61.3 billion sales). The other product segments that grew in 2015 were Optoelectronics with 11% growth, sensors and actuators which reached US$8.8 billion in sales for a 4% annual increase, NAND flash memory (US$28.8 billion) a 2% increase, and analog (US$45.2 billion) also a 2% increase.

Annual sales in China increased by 8%, whereas all other leading regional markets like Americas (-1 %), Europe (-9%), Japan (-11%), and Asia Pacific/All Other (-0.2%) – saw decreased sales compared to 2014.

US legislation was finally approved for a permanent extension of the R&D tax credit. This will enhance the ability of the US semiconductor industry to innovate and continue to improve incentives for domestic research, allowing US semiconductor companies to plan investments for years to come.1

In company news, Samsung Electronics and Apple remained the top semiconductor buyers in 2015, constituting 18% of the total semiconductor market. Samsung Electronics and Apple together consumed US$59.0 billion in semiconductors in 2015, an increase of US$0.8 billion from 2014. Samsung Electronics and Apple have topped the semiconductor consumption table for five consecutive years, but the growth of Samsung and Apple’s design total available market (TAM) stood at -4% and 7% in 2014-2015.

Worldwide semiconductor capital spending is projected to decline 5% in 2016, to US$59.4 billion. This is down from the 3% growth predicted by analysts last quarter.

The 2016 outlook for the semiconductor manufacturing equipment market reflected a pessimistic outlook for end-user electronics demand and the world economic environment. The capital investment policies of leading semiconductor vendors have remained cautious against the background of sluggish electronics demand. However, the long-term outlook shows a return to growth, although the wafer-level manufacturing equipment market is expected to face a downturn due to the loss of the supply and demand balance in the DRAM market.2

 

1Semiconductors.org, Nov 2015
2Gartner.com, Jan 2016