The Semiconductor Industry Association (SIA) has released the World Semiconductor Trade Statistics (WSTS) for February. Revenues for the month were $25.9 billion, making it the highest February on record.
February is rarely a very good month in the semiconductor market, and even this record-breaking February is only the tenth-highest-revenue month in the history of the semiconductor business. The highest-ever revenue month was last November at $27.2 billion.
More importantly, 2013 was a good year, and this year's February was 11.4% higher than February of last year. That comes after a record-setting January. Things are lining up for 2014 to be a very strong year altogether, giving Objective Analysis confidence in our forecast for important revenue growth in 2014.
When we look at regional splits we see that the highest growth was chips shipped into the "Americas" region, which includes all of North, Central, and South America. This indicates greater growth in end-equipment production in this region, which is mostly shipments into the US. Other regions are likely to experience similar growth later in the year.
Despite this good growth, the industry is not yet experiencing a big hiring increase. I would anticipate this change relatively soon. After hiring picks up management is likely to increase capital spending, and this will have a strong positive impact on the semiconductor capital equipment market.
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Prior to this capital spending increase the market should remain in a condition of relatively flat prices and increasing profit margins.
There is still a lot of life left in the current semiconductor upturn. The low capital spending of the past three years has created a tightness in the market that has largely stabilized prices, a scenario that Objective Analysis expects to last well into 2015, if not longer.
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