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Semiconductor FFU Market Forecasts

The markets for semiconductors and electronics are currently experiencing a slowdown. On its blog, the industry association SEMI estimates that this state of affairs will continue through the end of 2019. However, there are some signs that an upturn is on the horizon.

The Current Picture
The tempered growth outlook for semiconductors and electronics is part of a larger picture involving a worldwide downturn: The International Monetary Fund (IMF) recently updated its World Economic Outlook, reporting that growth “remains subdued.” The IMF revised certain projections downward. While relatively minor on their own, these changes came on the heels of past downward revisions.

Though many countries are affected by this, some have fared better than others: The IMF also said that the United States and Japan surpassed performance expectations. Likewise, according to SEMI, the semiconductor and electronics slowdown in the United States has been less severe than in other places. However, the slowdown is still present.

The Rest of 2019
The remainder of 2019 will likely be a challenging time for the industry. According to SEMI’s post, along with the global downturn, lower demand in markets like computers, mobile phones, vehicles, and instruments has in turn softened the demand for semiconductors and other electronics-related components. (The IMF surmised that many families are holding off on major purchases that lead to “long-range spending” for the time being.)
Another factor pointed to by SEMI is a surplus of ordering and subsequent increases in inventory, which occurred in 2018. Additionally, memory prices have declined in 2019, adding to the downturn.

Hope after 2019
However, there are signs of hope, especially after 2019 passes. For example, the IMF believes that between 2019 and 2020, growth will improve. This improvement projection is largely based on the stabilization and growth of shaky economies across the world. Additionally, a prediction posted on forecasts a strong outlook going forward for the electronic-components industry.

Another hopeful sign specific to the industry is this: SEMI reports that in Taiwan, wafer foundry sales are increasing. Those transactions “are often a strong predictor for world semiconductor shipments,” per the association. Signs like these drive home the point that while the semiconductor and electronics markets may not be at their strongest right now, an upswing is likely coming in the near future.

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