Thursday, January 20

Strong Dec sales cap record-breaking year for semiconductors


KUCHING: Global semiconductor sales (GSS) for the month of December 2014 has been positive with sales amounting to US$29.1 billion as compared to December 2013 sales of US$26.6 billion.

MIDF Amanah Investment Bank Bhd’s research arm (MIDF Research) noted that GSS has been above the US$29 billion level for the fourth consecutive month since September 2014.

It also exceeded the World Semiconductor Trade Statistics (WSTS) sales projection of US$28.9 billion, imputed based on its full year sales forecast of US$333.1 billion.

“GSS for 2014 was US$335.8 billion, a new record. This was an increase of 9.9 per cent as compared with 2013 annual sales of US$305.6 billion, exceeding WSTS sales forecast of nine per cent.

“This was mainly due to the broad and sustained growth across nearly all regions and product,” said the research house.

Double digit growth in sales was recorded for the Americas and Asia Pacific regions at 12.7 per cent year on year (y-o-y) and 11.4 per cent y-o-y respectively. Meanwhile, sales from the European region grew by 7.4 per cent y-o-y. In a turnaround event, sales from Japan recorded a marginally growth.

Nonetheless, this is the first time sales from Japan recorded growth since 2010.

MIDF Research stated that the North America based manufacturers of semiconductor equipment posted a book to bill (BTB) ratio of 0.98 times for the month of December 2014.

The BTB ratio went below parity after recovering in the month of November 2014.

However, MIDF Research was not overly concerned because bookings have increased by more than 10 per cent on quarter in the month of December 2014.

“Unfortunately, the increase in billings has outpaced that of bookings,” it added.

Semiconductor equipment bookings came in at US$1,216.8 million for the month of December 2014.

On a monthly sequential basis, this translates into an increase of 12.3 per cent. Billings for the month of December 2014 grew slightly by 17 per cent on month to US$1,391.9 million.

The billings figure was also 3.1 per cent y-o-y higher in comparison to December 2013 billings of US$1,349.7 million.

GSS has been consistently outpacing itself for the 20th consecutive month. This level of optimism is expected to continue into 2015 and 2016 as concurred by WSTS. The positive growth will be mainly supported by higher demand from the smartphones and automotive industries.

In the foreseeable term, the adoption of smartphones remains one of the key driving catalysts for the sector.

The transition of 2G to 3G and 4G will inevitably create stronger demand of low to mid-priced smartphones, especially in emerging markets.

Thus, affordability of these smartphones also serves as a vital success factor.

In the longer term, the availability and acceptance of wearable devices are expected to contribute to the positive sentiments for the semiconductor industry.