Japan's chip market contracts year-on-year

LONDON – Japan's averaged chip market in April was smaller than it was a year ago, according to figures published by the Semiconductor Industry Association. The three-month averaged chip sales in April showed the Japanese chip market contracted 7 percent in U.S. dollar terms compared with the same period in 2010.

In April Japan's three-month averaged chip sales (the average of February, March and April) were $3.42 billion down 7.0 percent on $3.68 billion in April 2010. On the same comparison all the other major regions showed growth. The Americas region was up 9.5 percent year-on-year at $4.50 billion, Europe was up 6.0 percent at $3.26 billion and the Asia-Pacific region, responsible for more than half of global chip sales, was up 4.8 percent at $13.49 billion.

Although Japan has been the weakest region in terms of growth throughout 2011, according to SIA and World Semiconductor Trade Statistics, the collapse of annual growth into a contracting market has been steep and steady.

In January 2011 Japan's three-month average growth year-on-year was 9.6 percent. In February growth fell to 6.1 percent. In March Japan's averaged sales – which also represent first quarter performance – were flat at just 0.2 percent growth and in April the comparison is a contraction of 7.0 percent.

The strength of the U.S. and European markets for chips was able to counteract the weakness of the Japanese market which is likely to be partly due to the aftermath of the great earthquake that struck Japan in March. However, the steepness and steadiness of Japan's growth collapse from a time before the earthquake struck on March 11 implies that something else is having a larger effect. This is possibly the movement of finished goods manufacturing from Japan to elsewhere in Asia-Pacific at a rapid rate. This will have been exacerbated by the impact of the earthquake.

The fact that this effect is showing up in three-month-moving average numbers means the effect will be more marked in actual sales figures. The SIA and the European Semiconductor Industry Association publish three-month averaged sales figures to smooth out the monthly data that would otherwise show troughs at the beginnings of the quarters and peaks at the ends of the quarters.

Related links and articles: 

Global April chip sales show softness

Global averaged chip sales dip in February

February 'actual' chip sales show 6.8% drop

Global averaged chip sales up 14% in January