The global semiconductor industry, which has registered higher sales of US$31.9 billion in May, is expected to continue to record positive sales growth on a year-on-year basis in the immediate term, says Malaysian Industrial Development Finance (MIDF) Research.
“Going forward, we expect the sales growth momentum emanating from China to remain robust in the foreseeable term. This is in tandem with the anticipated heavy investment in fab equipment in the upcoming years,” it said a note.
MIDF Research said in recent years, the Chinese government has been supporting the domestic semiconductor industry with tremendous capital budgets and this has led to China gradually playing a pivotal role in upholding the demand of semiconductor products.
At present, it said sales from China has accounted for one-third of global sales and it is also the main export destination of Malaysia semiconductor products.
In May, the worldwide sales of semiconductors rose by 22.6% to US$31.9 billion, driven by the increased demand from the memory products segment.
Meanwhile, it said all markets continue to post strong double-digit growth on a year-on-year basis, with the US region growing at a faster pace of 30.5% year-on-year, followed by China (26.3%), Europe (18.3%), Asia Pacific (17.7%) and Japan (15.8%).
Apart from the smart devices segment, it also expects healthier demand from the automotive, storage and healthcare markets.
It said the automotive market will be driven by the continuous effort to increase the average semiconductor content per vehicle.
“Demand from this market is also less susceptible to seasonality factors, thus providing a steadier stream of revenue. Meanwhile, higher demand for the storage market would be supported by the cloud computing and data centre industries,” it added.