October 2024 Global Semiconductor Sales +2.8% MoM & +22.1% YoY

In October 2024, the global semiconductor continued its uptrend by posting another healthy sales growth. According to the Semiconductor Industry Association, global semiconductor sales during the month stood at USD56.9bn (+2.8% MoM, +21.1% YoY) versus September 2024’s of USD55.3bn. This marked YoY sales recovery for the 12 th consecutive month, while MoM increased for 8th successive month. This shows that the global semiconductor market is currently in an upcycle. The strong YoY improvement was mainly contributed by all regions except Europe. The Americas led the sales growth (+54.0% YoY), followed by China (+17.0% YoY), Asia Pacific/All Other (+12.1% YoY), and Japan (+7.4% YoY).

Seeing MoM Sales Growth for 8th Straight Month

By geography, October 2024’s sales increase of 2.8% MoM was driven by America (+8.3% MoM), Europe (+1.3% MoM), China (+1.0% MoM), and Japan (+0.2% MoM). Meanwhile, the slowdown was observed in Asia Pacific/All Other (-0.7% MoM).

WSTS Revises Upward Its 2024 Annual Sales Forecast

The World Semiconductor Trade Statistics Organisation (WSTS) has recently revised its 2024 global semiconductor sales forecast upwards to USD 629.9bn (+19.0% YoY). The global semiconductor market is closing out 2024 on a high note, driven by strong demand from investments in AI data centres, despite the consumer, automotive, and industrial segments experiencing a slower pace of recovery. In 2025, global sales are projected to reach USD697.2bn, a YoY growth of 11.2%.

Maintain Overweight

Generally, the local semiconductor space is expected to continue seeing gradual earnings recovery, underpinned by an anticipated healthy recovery in global demand. On top of that, we expect most of the local tech companies to report a forex recovery in the upcoming quarter, given the recent retreat of the Ringgit against the US dollar. Meanwhile, we believe that any further protectionist policies adopted by U.S. President-elect Donald Trump will create more trade diversion opportunities for Malaysia under the China Plus One strategy.

We reiterate our OVERWEIGHT stance on the semiconductor sector. Maintain Buy recommendations on INARI (TP: RM4.10), UNISEM (TP: RM3.62), MPI (TP: RM35.80), and ELSOFT (TP: RM0.50).

Key downside risks include: i) heightened geopolitical tensions weighing on economic growth and disrupting supply chains, ii) weaker-than-expected sales, iii) further weakening of the USD against the Ringgit, and iv) a sudden spike in commodity prices.

Source: TA Research - 9 Dec 2024