Semiconductor sales hit record high in 2013 at $305.6B
According to a report from the Semiconductor Industry Association (SIA), the semiconductor industry logged record sales last year, climbing 4.8 percent to reach $305.6 billion with December 2013 sales the strongest on record at $26.6 billion.
"I think it's a very significant moment for the industry and, importantly, we see momentum going into 2014. We're on page for further increases in 2014 and 2015," Brian Toohey, SIA president and CEO, told EE Times. "It's pretty easy to see in the connected car, the connected home, the Internet of Things, the semiconductor is in really every type of product and are becoming ubiquitous. There's a very favorable macro story for the industry."
Total sales for 2013 narrowly exceeded expectations from the World Semiconductor Trade Statistics (WSTS) organization's industry forecast, consistent growth across most regions and product categories. The Americas semiconductor market grew at three times the rate of other markets, increasing annual sales by 13.1 percent in 2013. YoY sales also increased regionally in Asia Pacific (seven percent) and European (5.2 percent) markets but fell over 15 percent in Japan.
"Japan is a weird story, they've been artificially keeping down exchange rate to stimulate exports, which has put a damper on sales in that market place. There could be better growth in 2014," said Falan Yinug, SIA director of industry statistics and economic policy. "Europe was really, really, really dragging things down in 2012 and 1H13, but they're recovering."
It's difficult to determine whether 2013's YoY growth is significant in itself as the industry has fluctuated greatly since 2008. While the industry remains cyclical, feast-or-famine cycles are slowing in favor of small but steady growth as the industry matures.
As an example of the industry's cyclical nature, chip growth remained flat between 2009 and 2010, grew between 20-40 percent in 2009, and was negative in 2008 and 2007. While 2004 and 2005 had nearly 10 percent annual growth rates, Yinug said 1985 to 1995 boasted 20-40 percent growth.
"We expect growth to accelerate to more than eight percent in 2014 but many sectors within semiconductors including analog and PLDs have already discounted this growth," a Deutsche Bank Market Research release stated.
WSTS, however, forecast more consistent market growth in 2014 and 2015, up 4.1 percent to $317 billion this year. The market will grow 7.5 percent from 2013 to reach $328 billion by 2015.
SIA's Yinug added that he expects 2013's multi-sector growth to continue in 2014, with "a lot related to an improving macroeconomic posture, especially in the US and some of the other markets that, in 2012 and beginning of 2013, were... holding the industry back."
While memory-fueled growth in overall sales during 1H13, the SIA's Toohey said the industry "saw strength across the board in a number of segments."
Logic was the largest semiconductor category, increasing 5.2 percent YoY to $85.9 billion in 2013. Memory netted $67 billion, a 17.6 percent increase, with MOS micro-ICs at $58.7 billion rounding out the top three segments in terms of sales revenue.
"Logic is used in many end products and was not affected as much by depressed PC sales like micro-ICs," Yinug said. "The other end markets are growing pretty consistently. In 2014, I would expect that logic would lead in terms of sub-product segments; probable memory would be second."
Analysts at Deutsche Bank reported that December DRAM revenue was up five percent MoM to $3.36 billion, while aggregate flash revenue increased nine percent to $2.45 billion. The bank reported NAND memory as down 5.8 percent YoY, though SIA said NAND flash "experienced strong growth of 8.1 percent."
"We see that trend increasing in 2014 and beyond, we continue to see memory as a very healthy sector. There's clearly no shortage of need for enhanced memory in mobile and servers," Yinug said. "There are only about five major memory players and in 2014 there will be a little more rationality in terms of what industry is doing, competition within sector, and price."
Other positively performing product segments include optoelectronic products, which increased 5.3 percent annually to $27.6 billion in sales, and analog, which reached $40.1 billion in sales. Deutsche Bank said aggregate MPU revenue was up 15 percent MoM in December to $3.99 billion, but below typical seasonality of 26 percent growth.
Q4 overall sales reached $79.9 billion, a 7.7 percent increase over the previous year, the SIA said. While US remains the leader in headquartered semiconductor companies, Toohey and Yinug cited China and the Asia Pacific market as the largest for end users, and growing.
"The industry finished the year on a strong note with its best December on record, indicating that recent momentum is likely to carry over into 2014," Toohey said.
- Jessica Lipsky
|Related Articles||Editor's Choice|