Global semicon industry records weak Q2

BANGALORE, INDIA: According to a report released by IHS iSuppli, Global semiconductor market revenue in Q2 2012 fell by 3 per cent year-on-year (YoY) to $75.2 billion, resulting in widespread revenue declines for chip suppliers, particularly those headquartered in Japan and Europe.

In 2012, Q2 revenue increased by less than 3 per cent compared to the typically weak first quarter. If the semiconductor industry were on a trajectory for stronger annual growth in 2012, sequential growth would be expected to amount to at least 4 per cent or more in Q2, as per market research firm, IHS.

"The disappointing sequential growth came amid economic concerns such as the Eurozone crisis, slowing manufacturing growth in China and stubbornly highly unemployment in the US. Approximately two-thirds of the world's semiconductor suppliers saw their revenues decline in the second quarter compared to the same period in 2011.

This weak performance bodes ill for the semiconductor industry's growth prospects for the entire year," said Dale Ford, senior director of electronics and semiconductor research at IHS.

Global semiconductor revenue grew by a marginal 1.4 per cent in 2011 but IHS forecasts that the growth could be even weaker in 2012.

IHS has ranked the world's Top 10 semiconductor suppliers in the second quarter based on revenue ($M).

The degrowth of the global semiconductor industry could be attributed primarily to the economic crisis in European region and the seasonal slump in Japan. Among all semiconductor suppliers in Europe, combined revenue in the second quarter fell by 8.3 per cent compared to a year earlier. This has been the worst performance when compared to other regions, globally. Two-thirds of all European suppliers saw their revenues fall during the period.

STMicroelectronics and Infineon Technologies, the top European semiconductor suppliers, saw double-digit year-over-year revenue declines of 16.4 per cent and 12.9 per cent, respectively.

Most of the Japanese chip suppliers had to incur huge losses. Collective revenue for Japanese semiconductor suppliers retreated by 7.5 per cent in the second quarter compared to the first quarter. Major chip suppliers of Japan such as Toshiba, Renesas Electronics, Fujitsu Semiconductor Ltd. and Mitsubishi aggravated the overall decline.

"This has become a standard pattern for revenue growth for Japanese chip suppliers, as they typically see strong growth during their fiscal year ending March each year -- followed by a decline during their first fiscal quarter ending in June. The expectation is that Japanese suppliers will see a rebound in their revenues in the quarter ending in September," said Ford of IHS.