January, the 'Bisugi' Off-Season, World Semiconductor Sales Surpass $40 Billion for the First Time... Signal of a Long-Term Boom?

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Global semiconductor sales exceeded $40 billion (approximately 44.76 trillion KRW) in January this year. This is the first time in history that sales surpassed $40 billion in January, a seasonally slow month. The surge in semiconductor demand linked to the COVID-19 pandemic has driven up the sales of related companies, signaling the start of a supercycle (period of extraordinary prosperity).

On the 1st (local time), the Semiconductor Industry Association (SIA) of the United States cited data from the World Semiconductor Trade Statistics (WSTS) and announced that global semiconductor sales in January this year reached $40.01 billion, up 13.2% year-on-year and 1.0% month-on-month. The data released by SIA includes sales from 98% of the U.S. semiconductor industry and about two-thirds of semiconductor companies outside the U.S.

This is the first time since records began in 1996 that global semiconductor sales exceeded $40 billion in January. Generally, January is considered a seasonal low period in the semiconductor industry due to fewer new IT device launches. In January, semiconductor sales were around $26.9 billion in 2016, rose to $37.6 billion during the boom in 2018, and then fell to the $35 billion range in 2019-2020.

On a monthly basis, global semiconductor sales exceeded $40 billion only during the boom period from August to November 2018. The year 2018 recorded the highest-ever global semiconductor sales of $468.8 billion, with an average monthly sales of about $39.1 billion. Considering this, the fact that global semiconductor sales exceeded $40 billion in January this year is an exceptional level.

John Neuffer, president of SIA, said, "Global semiconductor sales started strong in 2021," adding, "Semiconductor production is increasing in response to rising demand and the semiconductor shortage affecting sectors such as automotive." By region, semiconductor sales in Asia increased the most, rising 16.0% year-on-year, followed by the U.S. (15.4%), China (12.4%), Japan (9.6%), and Europe (6.4%).

With such a rapid increase in semiconductor sales, expectations have grown that the semiconductor supercycle will start early this year. Although semiconductor demand has surged, supply remains insufficient, causing product prices to rise sharply. DRAM prices have increased by more than 50% in three months, fueling the semiconductor boom theory. Some predict that the semiconductor supercycle will continue into next year, suggesting a long-term boom.