The Semiconductor Industry Association announced today that global semiconductor industry sales in October 2022 will be $46.9 billion, a slight decrease of 0.3% compared to the $47.0 billion in September 2022 and a decrease of 4.6% compared to the total of $49.1 billion in October 2021 .
Regionally, sales in the Americas (11.4%), Europe (9.3%) and Japan (3.9%) increased year-over-year, but decreased in Asia Pacific/All Other (-10.1%) and China (-16.2%) . Monthly sales increased in the Americas (2.2%) and Europe (0.2%), but decreased in Japan (-0.1%), China (-1.5%) and Asia Pacific/All Other (-1.6%).
The global chip industry is in a downturn
The head of a global technology giant said that the global chip industry is going through a downturn, but it is still important that demand for memory and storage will continue to grow in the long run.
Micron was the first major chipmaker to warn of falling demand for PCs and smartphones, telling the company to cut chip production by about 20% and to suspend hiring.
Similarly, Taiwanese chipmaker TSMC has slashed its annual investment budget by at least 10% this year, while South Korea's SK Hynix, whose clients include Apple, cut its investment in half next year.
The situation is in stark contrast to a year ago, when a lack of supply led to a surge in demand for chips and there was a shortage of chips.
One of the factors driving this growth at the time was that many consumers who needed to work from home bought laptops, webcams and monitors during the new crown.
Automakers who made deep cuts early in the pandemic boosted demand as an unexpectedly quick rebound in vehicle sales sent them scrambling to buy chips, plus supply from Chinese smartphone maker Huawei Technologies rushing to build inventories in response to U.S. sanctions austerity. Global shortages have stalled car production and delayed consumer electronics launches. Broadband providers also face months-long delays in internet routers.
DRAM revenue fell 40% in the second half of the year
The DRAM market typically enjoys strong sales in the second half of the year, with system makers placing orders for flash memory in next-generation products they plan to release during the year-end holidays, ICinsights reported. That hasn't happened this year. Weak economic conditions have slowed global demand for personal computers, mainstream smartphones and other consumer electronics. Therefore, DRAM demand is on a downward trend.
The DRAM market saw strong sales in the first few months of the year, after which the first signs of a major correction in the DRAM market began to appear towards the end of the second quarter of 2022. For example, Micron reported an 11% sales increase in its Q3 FY22 (ended May), but then the company's actual sales fell -23% in Q4.
SK Hynix (23%) and Samsung (-20%) also announced sharp declines in their memory sales in 3Q22, and the weak DRAM market is expected to persist through the end of the year, at least until 1Q23.
The car seems to be the only healthy part. Texas Instruments, STMicroelectronics, Infineon and NXP all said growth in the automotive sector largely or partially offset declines in other sectors. Of the ten companies providing guidance for the fourth quarter of 2022, only Nvidia (+1.2%) and STMicroelectronics (+1.8%) expect revenue to increase. The weighted average revenue change for the nine non-memory companies providing guidance is a 9% decline in Q4 2022 versus Q3 2022.
Weakness in key end markets such as PCs and smartphones is evident in IDC's shipment forecast for the third quarter of 2022. PCs are down 15 percent from a year ago, and smartphones are down 9.7 percent. Before data becomes available in the third quarter of 2022, IDC expects PC shipments to decline 12.8% in 2022 and smartphone shipments to decline 6.5%.
