Following The Money

By Jim Feldhan
There are many trends in the semiconductor industry that are easy to identify because the moves make a huge statement. A few of the major changes that we’ve all observed include the shift from a computer application focus to consumers, the growth of mobile devices, and the shift of semiconductor dominance from the U.S. to Japan to Asia Pacific.

One of Semico’s jobs is to not only assess the impact of the major trends but to identify the subtle shifts that signal industry change. The chart below shows the percent of semiconductor sales to the Americas, Europe, Japan and Asia Pacific by quarter over the past 20 years.

Figure: Percent of Semiconductor Sales by Geographic Region

Source: SIA/WSTS and Semico Research Corp.

At the beginning of 1990, Japan was the largest consumer of semiconductor devices, but by the third quarter, semiconductor sales to Japan as a percent of the world started to decline. By the second quarter of 1992, the Americas regained the reign as the largest consuming geographic region in the world. The Americas consumed 32% to 35% of the world’s semiconductors between the second quarter of 1992 to the second quarter of 2001. In the second half of 2000, semiconductor shipments to the United States as a percent of the total began to fall as Asia Pacific dramatically increased their consumption. Not surprisingly, Asia Pacific has continued to steadily consume more semiconductor devices as a percent of the total. By the second half of 2012, Asia Pacific was consuming approximately 58% of the world’s semiconductor devices as production of our electronic systems steadily moved to that region.

All this data confirms what many of us expected as China’s market share continues to grow. But there is one trend that is somewhat surprising. Since the third quarter of 2008, the Americas’ market share of semiconductor consumption has steadily increased from a low of 14% to its current peak of 20% in the fourth quarter of 2012. In other words, the Americas region is gaining at the expense of Japan and Europe. As of fourth quarter 2012, Japan consumes only 12.8% and Europe 10.7% of the world’s semiconductors.

It is interesting to note that in the first quarter of 2012 alone, semiconductor sales to the Americas grew by 2.1% while Japan and Asia Pacific experienced a decline of 6.8% and 4.9%, respectively.

The resurgence in semiconductor consumption in the Americas can be attributed to the resurgence in manufacturing in the following segments: automotive, high-end servers, industrial equipment and communication infrastructure. While many are lamenting the exodus of manufacturing jobs to Asia, the Americas, including the U.S. and Brazil, are holding their own in growing electronics markets.

Semico also looked at the quarterly seasonal cycles to see if there were any surprises. For more on that, contact Rick Vogelei ([email protected]) for a copy of the Semico IPI Report.

—Jim Feldhan is the president of Semico Research.