Tech 3/03/2014 @ 3:35PM 1,349 views
January Semiconductors Break Sales Record
The Semiconductor Industry Association (SIA) today announced that worldwide semiconductor sales for the month of January reached $26.3 billion, an increase of 8.8% over last January’s sales of $24.2 billion. The month posted the industry’s highest-ever January total and the largest year-over-year increase in nearly three years.
The numbers represent a 3-month moving average compiled by the World Semiconductor Trade Statistics (WSTS).
January sales were not the highest month on record. Revenues were down slightly from those of December, with a 1.4% drop, but this is in line with normal seasonal trends.
Sales in the Americas region grew the most and were 17.3% higher than a year ago. Other regions grew more slowly, with Europe increasing 11.3% and Asia Pacific up 8.3%, but Japan’s sales declined by 4.7%, partly due to last year’s devaluation of the yen.
Semiconductor Industry Association
The team at my company, Objective Analysis, is unsurprised that 2014 started the year by breaking records. We have been notifying our clients that this would happen for some time now, since capital spending on new semiconductor plants (called “Wafer Fabs”) slowed starting in 2011, and hasn’t yet turned back on. Over the history of semiconductors booms and busts have been triggered by reductions and increases in capital spending two years earlier.
The uneven growth between regions is sure to change shortly, as Asia Pacific and Europe rise to match the growth level of the US. Over the course of the year growth will improve across all regions, leading to a year-over-year increase exceeding 20%. Semiconductor growth will be turbo-boosted in 2014.
Investors need to take a hard look at the semiconductor share of their portfolio to ensure that they are aligned to take advantage of this growth. It will impact not only semiconductor makers, but also semiconductor capital equipment companies, since semiconductor makers will soon try to right past wrongs by spending at a significantly higher rate than they have in the past couple of years.
Objective Analysis helps members of the semiconductor ecosystem to understand when industry up-cycles will occur and how long they will last. We welcome opportunities to help management to plan their capital spending and investors to time their investments to their best advantage.
