According to the Semiconductor Industry Association (SIA), overall semiconductor sales remained poor in July after the decline in chip sales in May and June, down 15% from the same period last year to $33.4 billion.
In terms of regions, sales in the United States were the worst in July, down 27.8% year-on-year, followed by China, with sales down 14.1% year-on-year.
In the first half of this year, global semiconductor revenues totaled $203.7 billion – down from $236.6 billion in the first half of 2018 – the worst performance since the market fell 26.5% in the first half of 2009. Analysts believe that this shows that chip vendors still face weak demand and high inventory.
According to data from market research firm IHS Markit, chip sales in the first six months of 2019 fell 13.9% from a year earlier. Among the top 10 chip suppliers, SK Hynix suffered the most in the first half of the year, with chip revenue down 34.7%. Samsung followed closely, with sales down 33.4% year-on-year. US chip maker Micron's revenue fell 29.2% year-on-year, ranking third.
Nvidia's revenue has fallen by 20.6% due to fierce competition in the artificial intelligence (AI) graphics processing unit (GPU) market. Due to the oversaturation of the mobile phone market, chip suppliers have excess inventory, and Qualcomm's revenue has dropped by 10.5%. Semiconductor market leader Intel's revenues fell only 1.7% due to its strong performance in the wireless and industrial markets.
According to Bloomberg, Nomura Securities analyst David Wong said that the semiconductor industry is still facing a headwind, which is in line with the future guidance given by many chip makers in the past six weeks, and will become an indicator of the chip-related market.
Both Citibank and Morgan Stanley said that chip sales in July did not meet their expectations. Morgan Stanley believes that due to poor sales of memory chips, even if the logic chip performs well, it can not make up the gap. Morgan Stanley analyst Joseph Moore said that as the demand in the end market continues to change, the overall chip market performance is still weak.
Researcher Longbow Research believes that demand will not pick up in the second half of the year, analyst Shawn Harrison said that the market is now too optimistic about the general view of the fourth quarter of this year.
However, RBC Capital Markets believes that the semiconductor industry may have bottomed out in the light of the poor sales for several months, and the downside may not be high.
The Philadelphia Semiconductor Index fell 2.2% on Tuesday, except for the poor data released by the Semiconductor Industry Association, which was also affected by the new tariffs imposed on September 1. "Bloomberg" pointed out that China is not only a big source of profit for chip makers, but also an important part of the supply chain, making chip makers far-reaching from the Sino-US trade war.