Super Cycle Projected to Lose Steam in 2019

super cycle
The ongoing semiconductor super cycle is projected to continue this year but lose steam next year.

World Semiconductor Trade Statistics (WSTS) has recently revised upwards its earlier forecast on the growth of the global semiconductor market.

WSTS is a non-profit corporation that provides services for the world semiconductor industry, including management of the collection and publication of semiconductor industry forecasts.

The organization said in a market forecast report released early this month that worldwide semiconductor sales this year were estimated at US$463.4 billion, up 12.4 percent from last year's US$41.22 billion.

Yet the report said next year, the so-called semiconductor super boom would gradually come to an end, with the market growing a mere 4.4 percent to post US$ 483.7 billion.

The growth rate of 4.4 percent is a much lower than last year's (21.6 percent), but has been revised up from an originally expected one.

The WSTS organization pessimistically forecast in a report in June of last year that semiconductor sales would climb a mere 2.7 percent this year, and rather shrink 0.2 percent next year, saying, “There is a possibility that the semiconductor market will enter a slump.

WSTS raised this year's growth rate forecast to 7.0% in a report released last November.

"Sales of major items are expected to inflate at the same time in the semiconductor market this year," the report said. “In particular, memory sales will increase 26.5%, spearheading the growth of the semiconductor market."

As for a market outlook for next year, "We expect growth to continue in the sensor and optoelectronics sectors," the report said.

"Even a year ago, we did not expect the super-boom of the semiconductor market to last for such a long time," said an official of the semiconductor industry. “WSTS revised up its growth forecast due to the steady demand for semiconductors from the server and mobile markets and continuing discoveries of new sectors which need semiconductors.”

However, “The memory market led by Samsung Electronics and SK Hynix of Korea and Micron of the US recorded a whopping 60-percent increase in sales last year, but an increase in supply will gradually slow down the upward trend," the official said.

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