3Q Global Semiconductor Sales Hit 'Record High'... Mixed Expectations and Concerns for 4Q

[Asia Economy Reporter Jeong Hyeon-jin] The global semiconductor market grew to an all-time high level in the third quarter of this year. As the semiconductor shortage continues, foundry (semiconductor contract manufacturing) is expected to maintain steady growth in the fourth quarter, while concerns persist that the memory semiconductor sector will face a short-term economic downturn.

On the 1st (local time), the Semiconductor Industry Association (SIA) of the United States announced that the global semiconductor sales in the third quarter of this year reached $144.8 billion (approximately 170.5 trillion KRW), an increase of 27.6% compared to the same period last year and 7.4% compared to the previous quarter. This is the largest quarterly figure in semiconductor history. The sales at the end of the quarter in September were $48.3 billion, showing monthly growth within the third quarter, SIA added. SIA cites data from the World Semiconductor Trade Statistics (WSTS), reporting monthly sales figures that include about 98% of the U.S. semiconductor industry and about two-thirds of semiconductor companies outside the U.S.

Global Semiconductor Sales Trends (Source=SIA)

John Neuffer, President of SIA, explained, "Semiconductor shipments reached an all-time high in the third quarter of this year," adding, "This is the result of strong global demand for semiconductors continuing and the industry's extraordinary efforts to rapidly increase production to meet this demand."

By region, as of September, China recorded the largest sales at over $16.7 billion. However, in terms of growth rate, the Americas region saw the largest increase with sales up 33.5% year-on-year, followed by Europe at 32.3%, Asia-Pacific and other regions at 27.2%, Japan at 24.5%, and China at 24.0%.

This expansion in the semiconductor market size was also confirmed in the performance of major domestic semiconductor companies. Samsung Electronics achieved record quarterly results with sales of 73.98 trillion KRW and operating profit of 15.82 trillion KRW, driven by strong performance in the semiconductor division. SK Hynix also recorded its highest-ever sales of 11.8053 trillion KRW and operating profit of 4.1718 trillion KRW, returning to the 4 trillion KRW level for the first time in two and a half years.

The issue lies in the fourth quarter. Within the semiconductor market, the foundry business continues to experience strong demand, with expected price increases and sales growth. In contrast, the memory sector is showing a noticeable price decline centered on DRAM since the third quarter due to customers securing inventory and supply chain disruptions, raising concerns that the market may worsen until the first half of next year.

According to the DRAMeXchange report released on the 29th of last month, the fixed transaction price of PC DRAM (DDR4 8Gb 2133MHz) in October averaged $3.71, down 9.51% from the previous month. This marks the first time in a year that DRAM prices have fallen this much since October last year’s 8.95% drop, and it is the largest decline since July 2019 (11.18%).

However, the industry expects that Samsung Electronics and SK Hynix will respond flexibly to uncertainties and operate their businesses conservatively. Overall, demand for semiconductors is expected to increase in the mid to long term, so the downcycle is unlikely to last long. Market experts predict that prices may return to an upward trend starting in the second half of next year.

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