According to a recent report released by Citi Research, although the Asian semiconductor industry has shown a strong recovery in the past quarter, the interruption of supply and demand caused by the novel coronavirus may lead to a slowdown in the rise in demand for semiconductors in Asia in February and March.
According to reports, before the outbreak of the virus, the total semiconductor exports of Asian countries continued to rise. In December last year, the inventory-to-shipment ratio of Korean semiconductors dropped to a new low since June 2009, showing a strong destocking of the memory chip industry and a recovery in the industry.
As the largest buyer of chip exports from Asian countries, China's purchases in 2018 accounted for about 52% of total Asian chip exports. As the virus epidemic continues to spread, various regional governments have successively adopted control measures. The Citi Research reports that these measures will lead to a significant reduction in China's semiconductor import demand.
In addition, some Chinese companies and factories have resumed work yesterday. The Citi Research estimates that as of today, only 30% of the Chinese labor force has returned to the work place. In addition, returnees must isolate themselves at home for 14 days to ensure that they are not infected by the virus. Enterprises are still facing a labor shortage, and it is difficult to resume work in the short term.
In addition, the full recovery of logistics services may take some time, which will keep the manufacturing capacity utilization rate low until the end of February. Therefore, it is expected that China’s semiconductor import demand will not begin to recover until the second quarter of this year.