Coronavirus Semiconductor Watch: IC $ sales rebounded last week above 5-year TMA levels as chip makers sought to capitalize on lower chip prices and avoid being unprepared to address end-market demand when this issue ends. IC sales were higher than in past pandemics at week+3 after a WHO global emergency announcement. COVID-19’s impact for week+3 was similar to the Ebola Virus outbreak, which also had a strong week+3 rise and about a week behind that of the Sendai earthquake. IC unit volumes also rebounded in week+3, showing even more strength than last week. This is reflecting a similar business optimism among IC buyers to that of semiconductor equipment.
Overall, there was not an infection of Semiconductor market sales in week+3, which jumped above 2019 levels for the same week a year ago. The price decline did abate last week, which is a very positive sign that the market remains healthy. While, semiconductor demand remains weak due to the Coronavirus, VLSIresearch’s Semiconductor Supply-Demand index did jump from Loose to Balanced, as the Coronavirus continued to disrupt the supply chain in a way that’s causing IC buyers to stock up on chips. DRAM and NAND Supply-Demand conditions jumped to Tight, as chip buyers worried the impact of COVID-19 in South Korea could delay shipments from Samsung and SK Hynix, who also have wafer fab production centers in China as well. IMDs moved up to Balanced. Foundry & OSAT remained unchanged at Saturated while Analog & Power stayed Balanced. Last week, Logic and Auto nowcast for the 1st quarter of 2020 held with little change. DRAM and Analog slipped slightly, while NAND improved by more than 4 points.
As for semiconductor manufacturing equipment, the Coronavirus has had no substantial impact on overall Wafer Fab Equipment shipments in 1Q20. 2Q20 is likely to be lower than VLSIresearch forecasted in January 2020. Test and Assembly are expected to have lower shipments. The semiconductor manufacturing equipment supply chain is stressed because of lower component availability from China.
Chipmakers have not slowed wafer starts or expansions plans so far, according to VLSIresearch’s surveys of the market last week. Logic producers in particular are locked in the EUV implementation race so spending for them remains strategic. Memory spending is more suspect and could come up short this year if the virus disruption persists because memory inventories are already above normal levels. For more detail and weekly updates on the subject, please access VLSIresearch’s reports, including The Chip Insider: Equipment and Emerging Markets, The Chip Insider: Strategy and Tactics, and Semiconductor Industry Analytics.
