Because the performance of memory products in 2017 was well, the whole semiconductor market was booming. But, owing to memory product price fluctuations, mobile phone market and virtual currency market, the growth of semiconductor market began to decline in the second half of 2018. The trade conflict between China and America has been going through the whole first half of 2019. Not only semiconductor industry between China and America but also other countries’ semiconductor market has been affected on the way to solve trade conflict. Recently, there is a trade war between Japan and South Korea. At the same time, 2019 is also seen as the first year of 5G. Although the market is generally optimistic about the prospect of 5G, 2019 is not the outbreak period of 5G application market.
Under this circumstance, according to the predictions of major authoritative research institutions, 2019 is a year for semiconductor companies to resist the pressure. Halfway through 2019, what is the real status of the semiconductor industry?
According to the new predictions of IDC semiconductor application report, the revenue of global semiconductor has continued to go up for three consecutive years. After a year-on-year growth rate of 13.2% in 2018, revenue will fall to $440 billion in 2019, a decrease of 7.2% from $474 billion in 2018. It is reported that the revenue of semiconductor in 2020 will recover. Besides, the compound annual growth rate (CAGR) for the period from 2018 to 2023 is 2.0%, reaching $524 billion by 2023.
Meanwhile, World Semiconductor Trade Statistics Organization also predicts that the sales of semiconductors will decline across all major markets in 2019. Besides, this organization also lists the predictions of semiconductor sales in the global every regions in detail. They pointed out that the America market is likely to decline by 23.6%. The Japanese market may fall by 9.7%, the Asia-Pacific market including China will fall by percent and the European market may fall by percent. However, the situation may improve next year. The World Semiconductor Trade Statistics Organization estimates that global semiconductor sales may increase by 5.4% in 2020.
According to the predictions of major authoritative research institutions mentioned above, the semiconductor market will not be optimism. But, at the same time, they point out that the semiconductor market will perform well in 2020.
In response to the current market downturn in the market, Goldman Sachs pointed out in a report that semiconductor equipment market conditions will improve as manufacturers reduce production and pressure from Japan-Korea trade disputes. Therefore, the equipment demand for the overall semiconductor industry is expected to increase substantially in 2020.
Toshiya Hari, an analyst of Goldman Sachs, points out in a report that despite the limited recent exposure, the memory industry's supply and demand situation will improve as a result of memory manufacturers' production reduction strategies, coupled with the recent trade war between Japan and South Korea. And the improvement will be faster than originally expected. In fact, in the past year, the memory industry’s spending on semiconductor equipment has plummeted sharply than previous downturns with the lowest point down 44% from its peak. This implies that the timing of the rebound is approaching.
Toshiya Hari also points out that according to the statistical data, the fundamentals of semiconductor equipment vendors are expected to improve faster. In addition, it is estimated that the chip foundry equipment market will grow by 7% in 2020 compared with the previous year, which is better than the original estimate of zero growth. The capital expenditure on NAND flash memory will also increase by 15% from the previous year, which is better than the original estimate of 10%. Capital support for DRAM remained flat, which is also better than the previous estimate of a 5% decline from the previous year. In addition, capital expenditures for foundry are also flat while logic chip capital expenditure estimates will be increase by 10%. The semiconductor equipment market is expected to grow substantially in 2020.
Before, SEMI has already predicted that Semiconductor equipment sales will return to growth in 2020. At the same time, it will increase by 11.6% from the previous year, reaching a scale of $58.8 billion. SEMI also points out that China, Taiwan and South Korea are still the top three global semiconductor device markets.