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Chip sales hit record $10B in a week despite Covid
by Matt Hamblen |Dec 10, 2020 10:30am



For the first time ever, global semiconductor sales topped $10 billion for a single week in the first seven days of December, a positive sign for a pandemic-troubled industry.

Improved sales for the chip market first emerged in the third quarter leaving many experts cautious after a difficult second quarter with supply chain disruptions due to chip factory closings mainly in Asia. The impact was severe enough that car companies couldn’t get chips and components and closed factories in April and May followed by reopenings in the summer.

Lately, however, there are signs that rising COVID-19 cases and stay-in-place orders, despite the emergence of vaccines, will bump up electronics prices and add uncertainty to early 2021.

VLSI Research reported that the first week of December saw sales of chips surpass $10 billion, representing a 10% year-over-year gain over 2019. But that improvement was just 2% higher than the prior week, an indication that sales are slowing to their seasonal peak, according to VLSI analyst Dan Hutcheson.

In one example, TSMC based in Taiwan, reported on Thursday that November revenues were up by nearly 16% over a year earlier while cumulative revenues for 2020 through November had grown 26% from a year earlier.

Sales of logic chips have accelerated in early December, while NAND “is clearly the hottest segment now, with DRAM following,” Hutcheson added. Analog and Power chips have improved enough to pass DRAM. Most surprisingly, there is a V-shaped recovery for auto-related chips in place, taking that segment to the positive direction.

Hutcheson also reported a DRAM shortage driven by a Dec. 3 1-hour power outage at a Micron fabrication plant in Taiwan. According to reports, that single facility makes 9% of the global DRAM supply, or about 125,000 wafers per month. The plant produces DDR4 and LPDDR4 memory on 10nm technology.

While a 1-hour outage might sound innocuous, it means that stopped DRAM production cannot quickly resume when stopped unexpectedly. Depending on the stage of manufacturing, the power outage could have damaged product and caused them to be dumped. IT World Canada speculated the sudden drop in DRAM supply atop of a pandemic-related uptick in PC sales due people working at home may result in an increase in DRAM prices in 2021.

Micron did not describe the extent of the damage, just that power was restored and the plant was operating normally with production expected to resume within a few days of the outage, according to Reuters.

While many chipmakers are cautious about 2021 with COVID-19 cases increasing, the World Semiconductor Trade Statistics organization recently projected that global sales will increase by 5% in 2020 and increase again by 8.4% in 2021. “The semiconductor market is not that negatively impacted by the COVID-19 pandemic as originally expected earlier this year,” the group said in a statement.