Global semiconductor industry beats $100 billion for the most recent quarter, says IHS Markit

Analyst firm IHS Markit has reported a fruitful second quarter for the global semiconductor industry in 2017, stating to be the sector’s best quarter in three years.

Having witnessed a 6.1% growth on a year-on-year basis, it generated revenue of $101.4 billion, up from $95.6 billion in the first quarter of 2017. The memory chip market, too, witnessed a successful second quarter by growing 10.7% to a new high of $30.2 billion with DRAM and NOR flash memory leading the charge, growing 14% and 12.3% quarter-on-quarter, respectively.

According to IHS Markit, in terms of application, consumer electronics and data processing increased in revenue by 7.9% and 6.8%, respectively, quarter-on-quarter. Despite the supply was tight, the continual growth in memory pricing is attributed to the growth. During the same period, industrial semiconductors saw the third highest growth rate at 6.4%. This is attributed to multiple segments, such as commercial and military avionics, digital signage, network video surveillance, HVAC, smart meters, traction, PV inverters, LED lighting and medical electronics.

The surge in factory automation alone is driving the growth for discrete power transistors, thyristors, rectifiers and power diodes. The market for these devices is expected to reach $8 billion in 2021, up from $5.7 billion in 2015. Intel still retains the topmost position in the world when it comes to supplying semiconductors. It is followed by Samsung Electronics by a slight margin. Among the top 20 semiconductor suppliers, AMD and Nvidia achieved the highest revenue growth quarter-on-quarter by 24.7% and 14.6%, respectively.

IHS Markit’s executive director of research and analysis, mobile infrastructure and carrier economics, Stéphane Téral, said that as telecom service providers are increasingly focusing on customer satisfaction and retention and on business and network transformation, which require increasing dedicated resources. In order to achieve a significant revenue growth, it is necessary to de-emphasise network operations through outsourcing and managed services as well as network sharing to preserve margins and sustain cash flow, he added.

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