Chart of the month: Semiconductors sales are electric in H1

Semiconductor

Semiconductors are a constant within the ever-changing high tech sector. Through digitization and Internet of Things applications, we see new products shaping the way traditional manufacturing and supply chain networks are operated. However, using semiconductors as a metric for assessing the changes in the high tech sector remains useful.

It is also a very good indicator of air freight growth. This graph produced by the International Air Transport Association (IATA) in November 2016 shows how well freight tonne kilometre growth has tracked semiconductor (specifically silicon material shipments) growth in the past.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The semiconductor market in 2016 was worth $334m. Analysis by the Semiconductor Industry Association (SIA), suggests a strong start to the year for the industry. Total sales are up 18.6% in year-over-year comparisons in the first five months of 2017.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

John Neuffer, President and CEO of the SIA, commented, “The global semiconductor market has settled into a period of significant and steady growth in 2017, with sales through May well ahead of the total from the same point last year. Significantly, recent market growth has been consistent across all major regional markets and semiconductor product categories, with sales of memory products continuing to lead the way.”

Year-over-year growth in all four regions was in the double digits (Europe: +22.1%, Americas: +10.2%, Japan: +12.8%, All other +19.9%). It should also be noted within the data that the industry experienced a dip in 2016, but the strong bounce back is clearly significant.

Backing up this data, SEMI, a global industry association serving the manufacturing supply chain for the micro- and nano-electronics industries, released information of their own. Their measure of quarterly shipments of silicon materials in million square inches is shown below. Silicon is a fundamentally important building material for semiconductors.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The data shows 11.3% year-over-year worldwide volume growth in the first half of 2017.

Last week, DHL announced that it had revamped its logistics offering in this sector by bundling its services under DHL Semiconductor Logistics. Its suite of services covers the entire value chain from inbound to manufacturing facilities through to final distribution to end users.

This was a global announcement too, matching the growth seen across regions, with its teams positioned in 50 facilities worldwide in China and the US (where the battle for market position is particularly fierce), as well as in Europe and Asia Pacific.

It is expecting strong growth over the next few years. In 2017, it estimates industry sales expansion of 16.8%. The SIA is similarly predicating double-digit growth. If the market keeps going as it is, LSPs ought to seriously consider how they can best cater to the high tech sector and airlines should watch with great excitement and interest.

Source: Transport Intelligence, August 1, 2017

Author: Andrew Ralls

For more industry-wide data, as well as information on key providers, markets, vertical sectors and geographies, please visit Ti’s new Global Supply Chain Information platform.