Semiconductor Industry Growth – Still Positive but Varies by Region
Manufacturing activity continues to expand – but at a slowing pace (Chart 1). The Global PMI was 52.5 in August, down from 52.8 in July and its recent high of 54.5 in December. PMI values >50 indicate an expansion.
World manufacturing growth has slowed but its growth rate varies significantly by region. Chart 2 compares the PMI values over time for the World, USA, Europe and China. Recently China and Europe have registered slower growth but U.S. growth is expanding (based on the Institute for Supply Management’s PMI). How long U.S. manufacturing will continue to accelerate remains to be seen. Geopolitical issues abound.
In the semiconductor industry both semiconductors and SEMI capital equipment continued to register double-digit growth in July (Chart 3), but these growth rates are now moderating. In July, World semiconductor shipments were up 17.4 percent and SEMI capital equipment sales rose 13.9 percent on a 3-month growth basis.
However, SEMI equipment growth rates also vary widely by region. Per Chart 4, China growth is accelerating, Taiwan and South Korea are contracting, and Europe and the USA are still expanding but at slower rates.
Timely World and regional industry information is key to understanding present and future business conditions and this data requires careful watching in these fast-changing times.
Walt Custer of Custer Consulting Group is an analyst focused on the global electronics industry.