China continues to support global semiconductor market

KUCHING: Chinese officials’ efforts in supporting the Chinese domestic semiconductor industry have led to China playing a pivotal role in upholding the demand of semiconductor products globally.

In a technology sector update from the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research), global semiconductor sales (GSS) surged by 18.1 per cent year over year (y-o-y) to US$30.9 billion – marking the highest-ever sales recorded in March.

“Inclusively, the GSS level has consistently stayed above the US$30 billion mark for the past six consecutive months since Oct 2016.”

The surge in GSS was cited by the research arm to be led by China whose government has been supporting its local industry with tremendous capital budgets, with a 26.7 per cent y-o-y growth – making up approximately one-third of global sales.

This surge in semiconductor sales in China is favourable locally as the country is currently the main export destination for Malaysian semiconductor products.

Following this is the American region posting a growth of 21.9 per cent y-o-y and the European region with an encouraging sales growth of 11.1 per cent y-o-y.

According to the research arm, this is the first double digit growth in sales witnessed from the European region since August 2014.

Sequentially, billings for semiconductors also saw improvement as the North America-based manufacturers of semiconductor equipment posted March 2017 billings of US$2.0 billion, representing an accelerated billing growth of 69.2 y-o-y.

Looking beyond the semiconductor segment, MIDF Research is also expecting the technology industry to be driven by smartphone sales which saw growths of 4.3 per cent y-o-y in Q17 to 347.4 million units and sales in dual-lens smartphone which are expected to pick up in the second half of the year (2H17).

Both tech segments were observed to be driven by China-based smartphone vendors such as Huawei, Oppo, Vivo and Xiaomi.

“The growths in smartphone sales were mainly propelled by Huaiwei, Oppo and Vivo who are continuing to gain traction in increasing their respective market shares,” shared the research arm.

Similarly, the research arm also opined that camera lens manufacturers are set to benefit in 2H17 as Oppo, Vivo and Xiami are expected to launch their respective models of dual-lens camera smartphones later in the year.

Looking forward, the research arm is optimistic on the local technology sector as they expect sale growth momentum for tech products emanating from China to remain robust in the foreseeable term.

Additionally, in tandem with the anticipated heavy investment in fab equipment in the upcoming years, the research arm further expects the global semiconductor sales to continue to record positive sales growth on a year over year basis.

“All factors considered, we maintain our ‘positive’ stance for the technology Sector,” guided the research arm.