Bengaluru, NFAPost: Year 2022 started with significant demand for semiconductor chips, however by mid 2022, the demand for semiconductor chips dropped and the revenues started showing quarterly decline.
The personal computer and smart phone market, the two big markets for semiconductors are going down in the third quarter of 2022, and so is the semiconductor sales revenue for these segments. The factors affecting the decline includes weakness in global economy, lower GDP growth, end of Covid driven demand, and most importantly some geopolitical decisions, such as banning of cutting-edge US semiconductor technologies getting into China.
US-based semiconductor body SIA reported global semiconductor sales for the month of September 2022 were down by 0.5% compared to August 2022 and 3.0% less than September 2021. SIA said the worldwide sales of semiconductors totaled $141 billion during the third quarter of 2022, a decrease of 3.0% compared to the third quarter of 2021 and 6.3% less than the second quarter of 2022.
Although global market has decreased, not all the geographic areas are seeing fall in growth. Except Asia-Pacific and China, the other regions are seeing some amount of growth. To share you the exact regional figures, SIA finds month-to-month sales increased in the Americas by 4.8%, Japan by 0.5%, and Europe by 0.1%, and in Asia Pacific/All Other sales decreased by 2.9%, and in China it is down by 3.0%.
Year-to-year sales increased in Europe by 12.4%, the Americas by 11.5%, and in Japan by 5.6%, but it decreased in Asia Pacific/All Other by 7.7% and in China down by 14.4%.
The badly hit among the semiconductor market is memory market. All the three major semiconductor chip makers Samsung, SK Hynix and Micron reported significant drop in revenues.
Samsung’ semiconductor revenue for its 3rd quarter 2022 in US can be approximated to $16.2 billion, approximately fell by 20% compared to its previous quarter of 2nd Q 2022. Another South Korean memory chip maker SK Hynix’ 3rd quarter 2022 revenue is around $7.7 billion, fell by 20% compared to it’s previous quarter. Earlier Micron had reported a revenue of $6.64 billion for its quarter ending September 1, 2022, a significant 23% drop compared its revenue for its quarter ending 1st Jun 2022.
PC market is still a major market for semiconductors, mainly for processor and memory. With the smart phone taking over personal computing space, PC market was turned into a less attractive market in the last 10 years, except it picked up fast-growth post-covid due to work-from-home demand.
Now with that demand waning, PC market goes for a downfall in 2nd quarter 2022 and the fall is continuing in 3rd quarter, it is estimated to have declined by 19.5%, as per latest findings by Gartner. The top four vendors of PCs namely Lenovo, HP, Dell and Apple estimated have registered a sequential fall in revenue in the range of 15- 20% in 3rd quarter 2022.
PC chipmaker Intel reported third-quarter revenue of US$15.3 billion, nearly flat compared to its previous quarter. Intel already seen a major sequential drop in its 2nd quarter 2022, where it’s quarterly revenue fell from US$18.4 billion in 1st Quarter 2022 to US$15.3 billion in 2nd Quarter 2022, down by 20.2% and it was $19.6 billion in 2nd Quarter 2021.
2nd biggest PC Market and server chip maker AMD reported a revenue of US$ 5600 Million for its third quarter of 2022 down by 14% compared to its previous 2nd Q 2022 revenues of US$ 6550 Million. Smart phone remains the top market for semiconductor chips. The smart phone market is also seeing decline since second quarter of 2022 and is continuing in third quarter of 2022.
Trend
Force has shared, the global smartphone production in the second quarter of 2022 is 292 million units, down by 6% compared to previous quarter. Compared to PC market, smartphone market is slightly better. Indian market, supposed to be always growing market in smartphones, see a 5% drop in shipment in 2nd Q 2022, compared to 1st Q 2022. Due to 5G, smart phone market to regain growth in 2023.
The two leading smart phone chipmakers Qualcomm and MediaTek yet to announce their latest quarterly revenues. DigiTimes Asia has quoted “MediaTek expects to post another sequential decline in fourth-quarter revenue, with revenue for all of 2022 likely to fall short of its target of 17-19% growth.” Qualcomm posted a revenue of 10.9 billion US$ for it’s latest quarter close to 2nd Q of 2022, compared its earlier quarter where it reported a revenue of US$ 11.2 billion, sequentially down by 2.7%.
Industrial electronics market excluding automotive:
This market is fragmented, with the presence of too many vendors in the market. Market research figures are not very reliable in this segment. However, a growth of 10% can be expected for the full year of 2022, with no significant fall in revenue-growth in the second half of 2022.
Texas instruments and STMicroelectronics are the leading chip makers for industrial electronics. Texas Instruments reported its third quarter 2022 revenue of $5.24 billion, a small increment compared to its 2nd Q 2022 revenue of 5.21 billion. TI reported revenue of 4.91 billion for it’s 1st Q 2022. STMicroelectronics reported a revenue of $4.32 billion for its 3rd quarter 2022, sequentially up by 12.6% compared to its revenue of $3.84 billion for its Q2 2022. STMicroelectronics reported a revenue of 3.55 billion for its 1st quarter 2022.
Automotive Market: Global automotive electronics market demand is anticipated to be valued at US$ 300.3 Billion in 2022, as per Future Market Insights. After looking into multiple market data, a 10% growth can be estimated in automotive electronics market in 2nd half of 2022 compared to 1st half of 2022. NXP, Infineon and Renesas are leading vendors for automotive semiconductor market.
Renesas reported a revenue of approximately US$ 2.61 billion for its 3rd quarter 2022 compared to approximately 2.55 billion US$ in 2nd Q 2022, a quarterly sequential growth of 2.3%. NXP delivered quarterly revenue of $3.45 billion, sequentially grew by 4.2%, compared to its revenue of $3.31 billion in 2nd Q 2022 and revenue of $3.14 billion in 1st Q 20222.
Semiconductor market is always cyclical with ups and downs every 2 to 3 years. For the people who know semiconductor industry this is not abnormal.