According to IHS Markit, chip sales for the first six months of 2019 fell by 13.9% compared to the same period last year, the largest decline since the first half of 2009.
According to IHS, global semiconductor revenues for the first half of 2019 totaled $203.7 billion, down from $236.6 billion in the same period in 2018. This is the worst performance since the market fell 26.5% in the first half of 2009.
Ron Ellwanger, senior research analyst at IHS Markit, said, “It’s hard to overstate the bad situation of semiconductor suppliers in the first half of the year.” “In the meantime, almost every product category and almost all application markets in each region experienced a decline. Therefore, the top 10 Nine of the big chip suppliers and 17 of the top 20 suppliers experienced lower revenues in the first six months. From almost any perspective, the first half was the worst six-month performance of the semiconductor market in half a year.
Among the top ten suppliers, SK hynix hit the biggest blow in the first half of 2019, and chip revenue fell 34.7% year-on-year - the company's worst in 10 years. However, South Korean supplier Samsung followed closely, with sales falling by 33.4%. US chipmaker Micron Inc. saw its third-largest decline in revenue, down 29.2%. IHS pointed out that all three suppliers were affected by the sharp decline in memory, down 36.4% - the biggest drop in all major product categories, and again the worst result in half a year since 2009.
Memory suffered the biggest drop in any semiconductor product division. According to IHS, the two largest memory product types, DRAM and NAND flash, fell 35% and 29.6% in the first half of 2019, respectively.
The other top ten suppliers mainly serve the non-memory market, so their losses are limited compared to SK hynix, Samsung and Micron. However, IHS said that most of these companies are still experiencing a decline.
The most striking thing about IHS disclosure is that Nvidia's revenue fell by 20.6% in the first half of 2019 due to the company's fierce competition in the artificial intelligence GPU market. Due to the excess of Qualcomm's mobile phone market, chip suppliers have excess inventory, and Qualcomm's revenue has dropped by 10.5%. Qualcomm's inventory days increased by 10 days, or 15%, from the second quarter of 2018.
IHS said that semiconductor market leader Intel managed to mitigate losses, only down 1.7% due to its strong performance in the wireless and industrial markets.
Overall, IHS Markit's second-quarter semiconductor ranking results are still slightly optimistic, despite losses. Compared with the first quarter, overall semiconductor revenue increased by 1% in the second quarter. Although this continuous growth is a seasonal pattern that usually occurs in the chip market every year, the emergence of growth in the second quarter is a positive sign in the terrible results of the first half of 2019.