Chip sales are in decline as the market faces major economic headwinds, most notably in mainland China. Credit: Fancycrave Worldwide semiconductor sales are down 0.5% in September, on a month-to-month basis, according to statistics released by the Semiconductor Industry Association, and down 3% compared to September 2021, as demand continues to soften in the face of multiple macroeconomic difficulties. According to the SIA’s report, September chip buying in the Americas region rose by 11.5% compared to the same month in 2021, to a total of just over $12 billion, and upticks to $4.53 billion and $4.05 billion, respectively were seen in Europe and Japan. Those gains, however, were more than offset by the mainland Chinese market falling by 14.4% to $14.43 billion in the same time frame, along with a 7.7% decline to $11.97 billion in all other markets. The decline is the first year-on-year slowdown since January 2020, according to a statement issued by SIA president and CEO John Neuffer. “The long-term market outlook remains strong, however, as semiconductors continue to become a larger and more important part of our digital economy,” he said. While Nueffer’s bullishness is echoed by other longer-term forecasters, several other indicators of a short-term decline for the world’s silicon makers exist, including recent Intel earnings news that saw the company’s third-quarter revenue drop 20% on a year-on-year basis. Net income for the US-based chipmaker plummeted from $6.8 billion in the third quarter of 2021 to $1 billion in the most recent report, a drop of 85%. The chip industry is facing structural upheavals caused by changing US trade policy toward China, supply chain disruptions caused by Russia’s invasion of Ukraine, and a prevailing view that the global economy is headed for a recession, which has blunted demand. A study released earlier this month by MIT and published in the Harvard Business Review highlighted that the “vast majority” of chip manufacturing takes place in Taiwan, the People’s Republic of China and South Korea, and that recent US moves— including the CHIPS Act—aimed at reducing the country’s dependence on overseas supply will take a long time to bear fruit. “The optimistic estimate [for the construction time on new semiconductor facilities in the US] is at least two years,” the study’s authors wrote, noting that effective dependence on East Asia for chip supplies is a matter of assembly and testing facilities as much as raw manufacturing capability. The latest trade restrictions, enacted by the US Commerce Department earlier this month, are likely to cause major problems for the Chinese domestic silicon industry, most prominently in the area of advanced chips. Overall, experts agree, current supplies of silicon have outstripped demand, even as individual markets, like the automotive sector, struggle with continuing shortages. Related content opinion Can AI tools help reduce Zoom fatigue? When it comes to meetings, whether in person or on video, can anything make them better? Yes, but it’s not the technology. By Steven Vaughan-Nichols May 06, 2024 5 mins Augmented Reality Generative AI Zoom Video Communications news analysis Apple earnings: About that iPhone 'slump' in China Based on information from Thursday's earnings report, it seems that data pointing to an iPhone slump in China were over-baked. By Jonny Evans May 03, 2024 9 mins iMac iPhone Apple news Microsoft begins to phase out ‘classic’ Teams Microsoft is encouraging Teams customers to move to the new, faster version of the collaboration app; the older version will be switched off next year. By Matthew Finnegan May 03, 2024 3 mins Microsoft Teams Collaboration Software Productivity Software news analysis Apple confirms it will open up the iPad in Europe this fall The latest efforts to comply with Europe’s Digital Markets Act mean developers can offer to side load apps to both iPhones and iPads in the EU. Apple has also taken steps to improve what it offers to smaller and non-commercial developers in the By Jonny Evans May 02, 2024 6 mins iPad Apple Mobile Apps Podcasts Videos Resources Events SUBSCRIBE TO OUR NEWSLETTER From our editors straight to your inbox Get started by entering your email address below. Please enter a valid email address Subscribe