Semiconductor Sales Demand
Very Soft  

The Semiconductor Industry Association (SIA) announced August 2011 sales of $25.03 billion. This is the second consecutive month in which sales declined on a year-over-year comparison.

The following chart displays the year–over-year change in sales of connectors and semiconductors. 

World Sales Performance: Connectors and Semiconductors
Year-Over-Year Change in Sales

Semiconductor Source = SIA

• Semiconductors have recorded six consecutive months of single-digit or worse growth. Connectors have recorded only three consecutive months of single-digit growth.

• Connectors have outperformed semiconductors in the last six months, and through August 2011, have not reported a year-over-year decline in monthly sales. 

• Semiconductors are up 2.2% year to date. Connectors are up 9.2%. We suspect some of the difference in year-to-date growth may be price erosion. Connector prices have been relatively stable throughout 2011. We have not heard any recent information about semiconductor pricing, but historically, semiconductor pricing becomes very competitive during periods of soft demand.

The following graphs display sales performance by geographic regions. 

North America
Semiconductors and connectors are both experiencing soft demand in North America.

North America Year-Over-Year Percentage Change in Sales

Europe
Connector demand is still surprisingly strong in Europe, but semiconductors reported a 2% drop in sales in August. 

European Year-Over-Year Percentage Change in Sales

Japan
Sales of both components are declining in Japan. 

Japan Year-Over-Year Percentage Change in Sales

Asia Pacific
Asia’s (includes China) growth is very soft. Both semiconductors and connectors have only achieved single-digit growth in the past seven months. In 2011, both Europe and the U.S. have achieved better sales growth than Asia.

Asia Pacific Year-Over-Year Percentage Change in Sales

Conclusions and Outlook
Demand for electronic products slowed considerably beginning in early 2011. This trend will probably continue into the fourth quarter of 2011. However, we do believe that 4Q11 will result in modest growth. In 2012, we’ll probably see soft demand for electronics in the beginning of the new year, but business will begin to pick up in the third and fourth quarters.

No part of this article may be used without the permission of Bishop & Associates Inc.

If you would like to subscribe to the Connector Industry Forecast, go to www.connectorindustry.com and select “Research Reports.” You may also contact us at bishop@bishopinc.com, or by calling 630.443.2702.