LONDON – Actual global chip sales in October, rather than the three month average, were $23.41 billion down 20.5 percent from the preceding month and down 4.1 percent on the $24.40 billion recorded for October 2010, according to figures published by the World Semiconductor Trade Statistics (WSTS).
The sales came in below a range predicted by market analyst Mike Cowan and indicate the chip industry is likely to achieve meager or zero growth for the full year after starting with strong annual growth in the first quarter of the year. They are also likely to be seen as a disappointment after a relatively strong September, ended the third quarter.
WSTS also published the three-month average sales data which attributes the average of August, September and October sales to October. This is promulgated by the Semiconductor Industry Association in the United States and other regional semiconductor industry bodies because it smoothes out the actual data that usually show troughs at the beginnings of the quarters and peaks at the ends of the quarters.
The three-month-average of global chip sales for October is $25.74 billion, flat with the $25.76 billion recorded for September and also behind the equivalent figure for October 2010 of $26.20 billion.
However, when considering the actual data in comparison with previous years it can be seen that a sequential fall in chip sales in October of about 20.5 percent is close to the ten-year average of 18.3 percent Indeed, in the previous ten years in five years the October sales fall was greater than this and in five years it was less.
On a geographic basis the actual chip sales data shows that all the regions experienced sharp sequential falls in chip sales, as would be expected.
The Asia-Pacific region, which now represents more than half of global chip sales, and Europe did worse than the global average falling back by 22.0 to $12.58 billion and 22.3 percent to $2.79 billion respectively. The Americas region declined in line with the global market by 18.7 percent to $4.38 billion. The Japanese market declined by the least, by 15.4 percent to $3.69 billion.
The year-to-date global chip sales for January through October 2011 stands at $251.28 billion, compared with $247.26 billion for the equivalent period in 2010, according to the WSTS data.
Taking the latest WSTS data into account Cowan is forecasting 2011 with see global chip sales of $304.71 billion, an increase of 2.1 percent on 2010 and that 2012 will see annual growth of 7.3 percent to take the market to $326.86 billion.
It does not surprise me (given the articles explanation of yearly trends being off for October) that the numbers are a little more down than one might expect. I am pleasantly surprised that the numbers are not worse given the impact on chip production in Japan and the economy in general. I think we must continue to watch the market and see where it goes. If the holiday season sales hold out maybe it won't be so bad for the IC industry in the long run.
It's not that bad.
As I explain in the article for October sales to be down 20 percent on September sales is not unusual.
And, of course, we do not see from these figures how units and average selling prices (ASPs) are performing separately.