2019 is a turning point in the semiconductor industry. Many semiconductor companies are facing challenges this year because of the slowdown and decline of the market. It is reported that global semiconductor revenue will reach 429 billion US dollars in 2019, down 9.6% from 475 billion US dollars in 2018, which is the smallest increase in the global semiconductor market since 2009. Last year, the actual production of the global semiconductor industry increased by 22%, but the market only digested 15% of the increase. At present, there are still 7% surplus capacity to be digested. Oversupply will be the biggest challenge for the semiconductor industry in 2019.

Why is the semiconductor industry declining?

There are many reasons for the decline of semiconductor industry. The most direct reason is the trade war and the slowdown of demand growth. Influenced by the rise of trade protectionism in Korea's major semiconductor trading target countries, such as the United States, as well as the financial turmoil in developing countries and the interest rate hike by the Federal Reserve, the downside risks of ICT industry exports accumulate. With the intensification of global competition and the increase of overseas production, the production and export of ICT industry will increase slightly and then stabilize. At present, due to the slowdown of growth of smartphones, data centers, automobiles and the demand suppression caused by Sino-US trade friction, the downstream demand of the semiconductor industry is weak, but considering the continuous emergence of innovative applications such as 5G, AI, IOT in the future, the demand recovery of the semiconductor industry is only a matter of time.