As the trade dispute between China and the United States take a turn for the worst, global industries continue to suffer. The global semiconductor industry, in particular, is taking quite a beating with sales numbers now declining for the second consecutive quarter.
Global sales of semiconductors, the microchips used for modern technologies such as smartphones, televisions, the internet, and autonomous vehicles, reached only $98.2 billion in the second quarter of this year. This was a 16.8 percent decline when compared to the same quarter last year.
According to the Semiconductor Industry Association (SIA), the global semiconductor market still remains at a steady rate of decline. The trade body that represents US interest in semiconductor manufacturing, design, and research revealed that revenues throughout the year have lagged behind and midyear totals have dropped by nearly 15 percent when compared to last year.
In its statement released Monday, the SIA revealed that the drop in sales affected all semiconductor product categories globally.
The outlook for the coming quarters for the global semiconductor industry does not look good as a resolution to the ongoing trade dispute between two of the world's largest economies is unlikely to happen very soon.
The release of SIA's quarterly industry data comes just days after US President Donald Trump announced that the country would be imposing a 10 percent tariff on $300 billion worth of Chinese goods starting on September 1.
Trump's tariff threats immediately resulted in a quick response from China. In retaliation, China announced that it would be canceling its orders of US agricultural products. This was then followed by the devaluation of the Chinese Yuan in an attempt to cushion the blow of the US tariffs on its exports. The move prompted the US to label the country as a currency manipulator. The exchange of measures resulted in the rapid drop of global equities markets and the increase of negative sentiments.
Trump's new round of tariffs will undoubtedly have a significant negative impact on the global semiconductor industry. The new round of tariffs will essentially include all types of tech products being imported from China. This will include items such as laptops, smartphones, video game consoles, printers, solid-state drives, and televisions.
Industry experts have argued that the added tariffs on information technology (IT) products will not have a positive effect on the US economy. Tech firms do account for a huge chunk of the US economy, and any slowdown within the sector will have a ripple effect on other industries as well.
