Semiconductor Outlook Worsens: "Shipments Expected to Decline for the First Time Two Consecutive Years"

Source: IC Insights

[Asia Economy Reporter Changhwan Lee] Global semiconductor shipments are expected to decline for the second consecutive year for the first time.

On the 23rd, IC Insights, a U.S.-based semiconductor market research firm, released a report predicting that this year's global semiconductor (IC·integrated circuit) unit shipments will decrease by 3% compared to the previous year.

This follows last year's shipment volume, which fell 6% compared to 2018, marking the first time in semiconductor history that shipments have declined for two consecutive years.

Semiconductor shipments have previously shown a year-over-year decline four times: in 1985, 2001, 2009, and 2012. Since 2013, shipments grew consecutively for six years, experiencing rapid growth.

However, last year saw a downturn. Oversupply and stagnation in the smartphone market are cited as causes. This year, compounded by the impact of the novel coronavirus disease (COVID-19), it is forecasted that shipments will decline year-over-year for two consecutive years for the first time ever.

IC Insights recently projected that the global semiconductor market size will shrink by 4% to $345.8 billion this year compared to the previous year. The firm had initially forecasted an 8% growth in January, then lowered it to 3% last month, and has now further downgraded its outlook this month.

They diagnosed that as COVID-19, which began in China, spreads to major semiconductor consumer countries such as the U.S. and Europe, a decrease in demand is inevitable.

The situation in South Korea's semiconductor industry has also recently worsened. According to the Korea Customs Service, semiconductor exports from April 1 to 20 decreased by 14.9% compared to the same period last year, marking the largest decline this year. Semiconductor spot prices (based on DDR4 8Gb), which reflect short-term market conditions, have also recently shown a downward trend.

A representative from the semiconductor industry said, "Due to COVID-19, market demand for smartphones and PCs in major markets such as the U.S. and Europe is decreasing, so semiconductor shipments are also expected to decline," adding, "The possibility of a turnaround in the semiconductor market depends on how quickly COVID-19 is resolved."

This content was produced with the assistance of AI translation services.