Chipmakers in Europe & Japan Hit Hardest in Q2

When the global electronics industry is humming along and all geographies are growing (when was the last time that happened?) it doesn’t seem to matter much where companies are headquartered. But when some regions are more economically challenged than others, location begins to make a difference.

For example, IHS’s recent examination of the global semiconductor market notes that European and Japanese chip companies were hit hardest by a dismal second quarter:

    “Amid rising economic concerns—including the Eurozone crisis, slowing manufacturing growth in China and stubbornly highly unemployment in the United States—second-quarter growth for the global semiconductor industry was highly disappointing,” said Dale Ford, senior director of electronics and semiconductor research at IHS. “Approximately two-thirds of the world’s semiconductor suppliers saw their revenues decline in the second quarter compared to the same period in 2011. This weak performance bodes ill for the semiconductor industry’s growth prospects for the entire year.”

Second-quarter global semiconductor revenues fell by 3 percent year-over-year, IHS reports, to $75.2 billion. European chip companies were hit hardest: IHS says revenues there fell by 8.3 percent year-over-year. In Japan, chip sales fell by 7.5 percent from the first quarter of 2012.

European chip suppliers STMicroelectronics and Infineon Technologies suffered revenue declines of 16.4 percent and 12.9 percent, respectively, according to the research firm. In Japan, the steepest declines were felt by Toshiba Corp., Renesas Electronics Corp., Fujitsu Semiconductor Ltd., and Mitsubishi.

But other regions don’t have a lot to feel smug about. In the Americas, IHS identified only two companies that had outstanding growth: Qualcomm, with 23.7 percent growth, and Broadcom, at 10.0 percent.

South Korea’s Samsung grew by 5.8 percent, boosted primarily by its acquisition of Samsung Electro-Mechanics, IHS reports.

12 comments on “Chipmakers in Europe & Japan Hit Hardest in Q2

  1. _hm
    August 24, 2012

    Main area of growth is innovative products. If innovation is not kept pace with time, perhaps there may be more hit to come. Innovation is the key.


  2. elctrnx_lyf
    August 25, 2012

    Japan's growth is slowing down and the Europe is lagging in the market. It looks like American and Asia pacific semiconductor are doing really good. Europe needs to encourage migration more skilled labour to gain the edge over other regions in the future.

  3. mfbertozzi
    August 25, 2012

    I am feeling that sector could, potentially, get back in a positive trend, quite soon. If we think, just for a moment, to the coming IOT (Internet of Things) and the need to deploy abroad chips and sensors, we can conclude the market will probably face sooner or later a new boost.

  4. _hm
    August 25, 2012

    Quite often, Japanese and European products have very nich market and designer may like to quickly employ it. But, both of them also lags in marketing products worldwide. They shloud take help of Americal marketing channel to enhance their market share.


  5. Mr. Roques
    August 26, 2012

    Should we link that decline with the actual final product decline or a change in supplier? Shouldn't it decrease proporcionally?

  6. bolaji ojo
    August 26, 2012

    This is merely a reflection of the economic changes taking place in Europe. The chip sector isn't immune to the problems of the continent.

  7. Taimoor Zubar
    August 27, 2012

    I wonder what it is that marks such substantial differences in the numbers been Asia Pacific and Japan. On papers both of these markets seem equal and are also faced with similar problems. Why is it that Japan has plunged so low..

  8. SP
    August 27, 2012

    Quite agreed.

  9. Himanshugupta
    August 27, 2012

    Is Japan still recovering from natural calamity disaster? The trend seems quite baffling as except Japan there is growth everywhere. Even EU, where the situation is bad, has shown positive signs.

  10. Anna Young
    August 28, 2012

    I'm not surprised by IHS report findings on the state of business activities and growth within electronic industry in Europe and Japan. A varied level of economic factors is at play: the on-going economic crisis in Europe and global economic situation in general are bound to permeate this sector too. However, Japan on the other hand still struggles to show significant growth ever since its economic malaise. I hope things pick up soon enough in this market segment.

  11. Taimoor Zubar
    August 31, 2012

    “Is Japan still recovering from natural calamity disaster? The trend seems quite baffling as except Japan there is growth everywhere”

    @Himanshugupta: Even Thailand suffered natural disaster in the form of severe floods but it's doing pretty well. I don't think Japan's performance has to do with the natural calamity that took place two years back.

  12. mfbertozzi
    September 2, 2012

    @Bolaji: I agree on that, it auto-explains why I told about; furthermore, I believe that sector could act as a new beginning for the other sectors, considering for instance, smart cities or green need absolutely electronics chip all over.

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