[ET Net News Agency, 7 November 2019] Weakened demand from key smartphone and computer
markets and unfavorable pricing environment will drive the global semiconductor industry
towards its steepest decline in annual sales (-15%) since the dot-com bubble burst in
2001, Euler Hermes' latest sector research report revealed.
While annual semiconductor sales rose by 21.6% and 13.7% in 2017 and 2018 respectively,
this year's steep sales decline could wipe out US$70 billion in revenue.
Euler Hermes expects the slump to continue into 2020, with a further sales contraction
of 3%. Apart from weakened demand, semiconductor companies have found themselves with
excess inventories and production overcapacities, which has led to fierce price
competition.
With China-U.S. trade tensions added to the mix, the semiconductor industry saw its
monthly sales sharply drop by -30% between September 2018 and January 2019 alone. (KL)