Source: Content compiled from eenews
According to the World Semiconductor Market Statistics (WSTS), the global semiconductor market size in August 2024 increased by 28.0% compared to the same month last year, significantly exceeding the 18.0% growth rate in July 2024. However, this is because the memory market has shown very strong growth, rather than the situation in the non memory market continuing to be unfavorable. The main products of many Japanese semiconductor manufacturers are microcontrollers, analog devices, and discrete devices, and the current situation is that the growth in these product areas is lower than last year. The mid-term financial performance plans of each company will be announced from late October to early November 2024, and many companies may disclose the current difficult situation of their semiconductor business. This time, I would like to express my personal opinion on the current situation and future prospects of the semiconductor market.
Significant growth in storage
Figure 1 shows the trend of the global semiconductor market size compared to the same month last year, as well as the trend chart of the total amount of semiconductors, memory, and non memory. The total semiconductor market has maintained double-digit growth since the beginning of 2024, with the latest increase of 28.0% compared to the previous year (August 2024). However, if we look at the chart, the growth rate of the memory market is very impressive, with a recent year-on-year increase of up to 147.9%. On the other hand, markets outside of memory have barely maintained positive growth, with recent performance showing a year-on-year increase of 5.4%.
In fact, based on the recent growth rate of the product market, besides memory, the only product that has achieved double-digit growth is Logic, which has grown by 18.2%. Sales of discrete components decreased by 16.2%, optical semiconductors increased by 0.3%, sensors and actuators increased by 2.7%, analog sales decreased by 0.0%, and micro sales decreased by 5.7%.
The discrete market composed of small signal transistors and power transistors continues to face severe market conditions, with a cumulative decline of 14.2% from January 2024 to August 2024 compared to the previous year. The small signal transistor market has been significantly lower than the previous year since early 2023, but has been gradually recovering since hitting bottom in early 2024. The temporary demand increased due to the COVID-19 pandemic has become inventory, but it can be seen that this inventory may be cleared. On the other hand, the power transistor market has been experiencing negative growth since early 2024, and it is unclear when it will bottom out. This is not a temporary demand, but the actual demand should continue to increase because it is a key component for automotive electrification. However, when the shortage lasts for more than two years, the temporary demand seems to increase significantly. It would be great if the bottom situation could be confirmed before the end of the year, but the adjustment phase may continue until mid-2025. Due to the fact that power transistors account for approximately 70% of the discrete device market, it may take some time for the entire discrete device market to recover positive growth.
The optical semiconductor market continues to experience unfavorable market conditions, with a cumulative decrease of 4.1% from January to August 2024 compared to the previous year. Nearly half of the optical semiconductors are image sensors (based on value), with over 70% of image sensor shipments used in smartphones. As the number of cameras installed in a single smartphone increases, the demand for image sensors will also increase. However, the image sensor market has successfully maintained positive growth and is strong enough to drive the entire optical semiconductor market. The smartphone market is expected to remain sluggish in 2024, so we hope to see a recovery starting from 2025.
The sensor and actuator market experienced a cumulative year-on-year decline of 9.0% from January to August 2024, and has been experiencing negative growth since the end of 2022. In August 2024, it recorded a period of positive growth for the first time. The uniqueness of this device lies in the fact that approximately 50% of the devices are used for automobiles, 30% for smartphones, and 20% for other applications, and the device continues to grow in the wave of increasing demand for automotive ADAS. The reason why it fell into negative growth for the first time in 2023 and this trend continued until July 2024 is likely due to sluggish demand for automobiles. However, the automotive market has not fallen into a slump, and the problem seems to be the excessive accumulation of equipment inventory, so growth is likely to turn positive from 2025 onwards.
The semiconductor market for Japanese manufacturers is expected to emerge as early as early 2025.
Expected to continue stable growth
The simulated market has experienced a cumulative year-on-year decline of 4.2% from January to August 2024, with negative growth since the beginning of 2023, but finally showing signs of turning positive growth. I would like to draw special attention to the fact that the general simulation market is showing signs of rebounding from hitting bottom at the end of 2023. The original demand should have been stable, but the epidemic has temporarily increased the demand, and the solution to this situation is only a matter of time. The sales of simulation products for specific applications vary greatly, with strong sales in communication and weak sales in automobiles, but overall they still maintain positive growth. Although the downturn in the automotive industry may continue, the entire simulation industry is expected to grow steadily.
There are still many concerns
The micro market composed of MPU and MCU has accumulated a year-on-year growth of 4.6% from January to August 2024, which is positive growth, but the growth rate has dropped to negative growth from July to August 2024. This is a question. In 2023, the weak MPU market will be offset by the strong MCU market. However, since the beginning of 2024, the MCU market has fallen into negative growth, which has been offset by the bottoming out rebound of the MPU market. However, in the sluggish PC market, the recovery of MPU lacks strength, indicating that the overall decline cannot support the decline of MCU market. Only the MPU used for servers performs well, but considering that this demand is being eroded by GPUs (statistical logic) and the bottom period of MCUs mainly used for automobiles has not yet been determined, it is expected that there may still be worrying issues by 2025 and 2020.
The logic is still very strong
From January to August 2024, the logic market experienced a cumulative year-on-year growth of 17.8%, making it the only market outside of memory that maintained double-digit growth. This growth typically occurs when the smartphone market is strong, but recently the demand for IT infrastructure such as data centers and communication infrastructure has been the driving force. NVIDIA has almost a monopoly on GPUs installed in AI servers, but in terms of ASSP and ASIC for data centers and communication operators, not only American companies, but also Japanese companies such as Socionext are improving performance. It is expected that this stable state will continue temporarily, and if combined with the demand for smartphones, the growth rate of the logic market is expected to further increase.
Memory with high growth potential
The memory market maintains a very high growth rate, with a cumulative year-on-year increase of 95.1% from January to August 2024. The main applications for memory demand are PCs, smartphones, and data centers, but the demand for PCs and smartphones is not very active, while the demand for data centers has been exceptionally strong recently. Especially, the demand for DRAM (high bandwidth memory) that supports GPU high-speed I/O is constantly increasing, and DRAM manufacturers are planning to increase production to follow SK Hynix, which is leading in the HBM field. Compared to this, people pay less attention to NAND flash memory, but the demand for it in data centers is still growing rapidly. The investment in future data centers is expected to accelerate further, so the memory market is expected to continue to grow rapidly in 2025. I hope Kaixia can also seize the opportunity to go public.
The above is an analysis of the current status and future prospects of the semiconductor market.
From an application perspective, only IT infrastructure is thriving, benefiting only memory vendors and some logic vendors. On the other hand, the inventory problem in the automotive industry has not been resolved, and for the industrial equipment industry, the macroeconomic downturn in China is a negative factor. The solution to the inventory problem is only a matter of time. China's macroeconomic situation seems to have bottomed out, and there is a high possibility of improvement from 2025 onwards. However, some device markets have not yet bottomed out, so the timing of recovery may vary. Many Japanese semiconductor manufacturers may have to wait until early 2025 or mid-2025 at the latest for market conditions to improve. The WSTS autumn forecast will be released in late November 2024, so I would like to take another look at the semiconductor market situation at that time.
Reference link https://eetimes.itmedia.co.jp/ee/articles/2410/15/news085_2.html
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