We are delighted to share May’s semiconductor update from Future Horizons. Find out more about the current outlook of the market below:
Executive Overview
March’s total IC sales were up 22.1 percent in value vs. the same period last year, with total Discretes down 9.9 percent and total Opto down 8.9 percent. The overall year-on-year total Semiconductor market grew 15.7 percent.
By comparison, the same datapoints for February were plus 14.3 percent for total Semiconductors, plus 23.1 percent for total ICs, minus 22.3 percent for total Discretes, minus 12.7 percent for total Opto.
The overall semiconductor year-on-year growth in value, at 15.7 percent, was the fifth consecutive month of double-digit growth since the market turned positive in September 2023.
These double-digit growth numbers clearly look like a strong market recovery but, as can be seen for the relevant charts later on, with the IC unit demand, Analog, Discrete and Opto sectors still stubbornly weak, this apparent ‘market recovery’ is predicated by a strong rebound in IC ASP monthly annualised growth.
Given the long-term average ASP growth is zero, our concern is this ASP rebound is purely a counter reaction to the previous year’s period of harsh ASP decline. There is a real danger this will evaporate during 2H-2024 as fast as it suddenly appeared.
Memory and AI processors aside, demand in the other IC sectors, along with Analog, Discretes and Opto, remains sluggishly weak. As we have cautioned many times before in this Report, you cannot call a real market recovery without IC units and Discretes growth.
Market Outlook
As commented on in last month’s column, our 3 percent growth assumption for Q1-2024 was looking optimistic. With the first quarter data now in, our fears were confirmed … the first quarter crashed, wiping US$13 billion off the quarter, which, in turn, reduced our full year forecast by US$50 billion.
Low unit sales, driven by ‘take of pay’ long-term price agreements (LTAs) from the Covid-boom era, are exacerbating industry attempts to rein back excess inventory.
Just like the emperor’s new clothes, the supposed 2024 Super-Cycle has evaporated in a puff of smoke. It always was a delusion, Q1 removed all doubt.
Future Horizons hosted their spring Forecast Webinar at the beginning of May. For the webinar highlights, click here and watch the full webinar by clicking here.
For any further details, please reach out to the Future Horizons team.
