Semiconductor manufacturing monitor points to moderating industry contraction in Q2, SEMI reports
by CM staff
SEMI announced in its Q1 2023 publication of the Semiconductor Manufacturing Monitor (SMM) Report, prepared in partnership with TechInsights.
MILPITAS — The current global semiconductor manufacturing industry contraction is expected to moderate in the second quarter of 2023 and give way to a gradual recovery starting in the third quarter, SEMI announced in its Q1 2023 publication of the Semiconductor Manufacturing Monitor (SMM) Report, prepared in partnership with TechInsights.
In the second quarter of 2023, industry indicators including IC sales and silicon shipments – both partly supported by seasonality – point to quarter-over-quarter improvements. However, despite the gains, elevated inventories continue to dampen silicon shipments and fab utilization rates remain significantly lower than levels registered last year. In addition, semiconductor equipment sales continue to decline in parallel with capital expenditure adjustments by major industry stakeholders.
“The current market downturn is compounded by soft consumer demand and elevated inventory levels and has led to a sharp decline in semiconductor fab utilization,” said Clark Tseng, Senior Director of Market Intelligence at SEMI. “However, as the inventory correction comes to an end in mid-2023, a mild recovery is expected in the second half of the year driven by a pickup in demand for inventory and the holiday season.”
The indicators point to a likely bottoming of the current downturn in the second quarter of 2023 with a slow recovery expected to begin in the year’s second half.
“Despite ongoing uncertainties and risks, we expect continuing production cuts and capex reductions, especially in the memory market, will start having a positive impact on market fundamentals in the latter part of the year, resulting in a more balanced market environment,” said Risto Puhakka, VP of Market Analysis at TechInsights.