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Global chip sales to decline due to strong US dollar

Posted: 12 Nov 2015 ?? ?Print Version ?Bookmark and Share

Keywords:semiconductor industry? U.S. dollar? electronics industry?

The semiconductor industry is feeling the brunt of a strengthening U.S. dollar versus other major world currencies throughout 2015. As a result, worldwide chip sales are expected to contract this year.

According to a new report by market research firm IC Insights, the strengthening of the dollar versus the euro, yen, won and Taiwan dollar is expected to deflate the worldwide semiconductor sales growth rate by three per cent points in 2015, resulting in a sales decline of one per cent compared with 2014.

It is also expected to deflate the 2015 sales growth rate of the top 20 semiconductor suppliers by four per cent, according to a forthcoming release of IC Insights' semiconductor industry forecast.

The strengthening of U.S. currency deflates foreign sales and market results, since all of the figures in the IC Insights report are presented in U.S. dollars. Deflation of the other major currencies in relation to the dollar presents itself in the form of lower semiconductor average selling prices, which are forecast to decline by three per cent this year, IC Insights said.

IC Insights is at least the second major market research firm to issue a revised forecast projecting a decline in chip sales in 2015. Last month, Gartner Inc. revised its forecast, also calling for a 1-per cent decline in chip sales for the year.

The effect of the strong dollar is being felt across all multinational industries and has had a significant impact on the financial results of global companies in the electronics industry and beyond.

Sales leaders

Total sales of the top 20 chip firms are forecast to amount to $259.15 billion in 2015, a decrease of less than one per cent compared to the 2014 total of $260 billion, according to IC Insights. The top 20 firms for 2015 include eight U.S. companies, three headquartered in Japan, three in Taiwan, three in Europe, two in South Korea and one in Singapore. The ranking includes three pure-play foundries and five fabless chip companies, IC Insights said.

The IC Insights top 20 ranking also shows that South Korea's Samsung Electronics continues to gain ground on perennial semiconductor sales leader Intel Corp. Intel's 2015 sales are forecasted to be 21 per cent greater than Samsung's, down from a difference of 36 per cent in 2014. On a currency adjusted basis, Samsung's sales are forecast to be just 11 per cent lower than Intel's, IC Insights said. Intel has consistently been no. 1 in semiconductor sales since the mid-1990s.

Advanced Micro Devices Inc. (AMD), one of Intel's oldest rivals, is forecast to drop out of the top 20 in chip sales this year for the first time in years. IC Insights noted that AMD is forecast to have a particularly rough 2015, with sales expected to decline 28 per cent to about $4 billion.

Pure play foundry United Microelectronics Corp. (UMC) is forecast to replace AMD in the top 20 ranking this year, IC Insights said.

- Dylan McGrath
??EE Times U.S.

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