June 2025 Global Semiconductor Sales +1.5% MoM & +19.6% YoY

In June 2025, the global semiconductor sector sustained its positive momentum with another strong rise in sales. According to the Semiconductor Industry Association, global semiconductor sales for the month reached USD59.9bn (+1.5% MoM, +19.6% YoY), marking the 20th consecutive month of YoY sales growth, driven by sustained demand for AI and high-performance computing applications. The YoY improvement was primarily driven by all regions except Japan (-2.9% YoY). The Asia Pacific/All Other led the growth (+34.2% YoY), followed by Americas (+24.1% YoY), China (+13.1% YoY), and Europe (+5.3% YoY).

Figures 1 and 2 in the original report illustrate the cyclical nature of global chip sales, showing both the absolute sales in US$ billions and the year-over-year growth percentages. The charts indicate a strong recovery and upward trend from late 2023 through mid-2025.

Higher MoM Sales

By geography, June 2025’s sales increase of 1.5% MoM was mainly driven by the Asia Pacific/All Other (+5.8% MoM), and China (+0.8% MoM). Meanwhile, the slowdown was observed in Japan (-1.7% MoM), Europe (-0.7% MoM), and America (-0.2% MoM).

Figure 3 shows the year-over-year sales growth by region, highlighting the strong performance of the Asia Pacific region. Figure 4 provides a breakdown of sales by region, confirming that Asia Pacific remains the largest market for semiconductors.

Source: SIA, TA Securities

Global Manufacturing Capacity Sees Healthy Expansion

According to SEMI, global sales of total semiconductor manufacturing equipment by original equipment manufacturers are forecast to reach a new industry record of USD125.5bn in 2025, representing a 7.4% YoY increase. Growth is expected to continue into 2026, with sales projected to hit another record high of USD138.1bn. This strong momentum is primarily driven by the leading-edge logic and memory segments, as robust AI-fuelled demand for chip innovations continues to spur investments in capacity expansion and advanced manufacturing technologies.

Figure 5: Equipment Forecast by Segment (US$ Billion)

Source: SEMI

Wafer fab equipment sales are projected to increase by 6.2% and 10.2% in 2025 and 2026, respectively, reaching USD110.8bn and USD122.1bn. Meanwhile, assembly and packaging equipment sales are forecast to rise by 7.7% YoY to USD5.4bn in 2025, while test equipment sales are expected to jump 23.2% YoY to a new record of USD9.3bn. Overall, the back-end equipment segment is anticipated to see continued growth in 2026, supported by the increasing complexity of device architectures and rising performance demands from AI and high-bandwidth memory applications. Nevertheless, this growth is partially offset by ongoing softness in the automotive, industrial, and consumer markets.

Trump Eyes 100% Tariff on Semiconductor Imports

According to US Commerce Secretary Howard Lutnick, the U.S. will soon announce the findings of a national security investigation into semiconductor imports. To recap, the Department of Commerce previously initiated a Section 232 investigation to assess the potential risks that such imports may pose to national security. Meanwhile, President Donald Trump has stated that the U.S. will impose a tariff of around 100% on imported semiconductor chips, but exemptions will be granted to companies that have committed to manufacturing in the U.S. We believe he is likely awaiting the outcome of the investigation before finalising the tariff rate and implementation framework.

In our view, any potential tariffs on semiconductor imports could significantly disrupt the global supply chain, given that the semiconductor industry is highly globalised. The design, fabrication, testing and packaging activities are usually carried out across multiple countries. The imposition of tariffs would raise production costs, some of which would likely be passed on to consumers, ultimately resulting in higher end-product prices and weaker demand.

Overall, we believe that more conditional exemptions will be announced over time, given the complexity and interdependence of the global semiconductor supply chain. It would be extremely difficult for the U.S. to fully repatriate the semiconductor value chain in the near term, as building a self-sufficient ecosystem would take decades.

Maintain Neutral

Despite the projected continued growth in global semiconductor sales, we maintain a cautious outlook due to lingering uncertainties surrounding U.S. trade policy. On the other hand, we believe the Malaysian government will remain committed to implementing the National Semiconductor Strategy, with the aim of enhancing the country’s position in the global semiconductor value chain. Overall, we maintain our NEUTRAL stance on the semiconductor sector. We upgrade ELSOFT (TP: RM0.36) from Hold to Buy, with the recent share price weakness presenting a more attractive upside potential. Meanwhile, we maintain our Buy recommendation on UNISEM (TP: RM2.60), Hold on MPI (TP: RM21.63), and Sell on INARI (TP: RM2.11).

Key downside risks include: i) U.S. policy risks that may weigh on economic growth and disrupt supply chains, ii) weaker-than-expected sales, iii) a weakening of the US dollar against the Ringgit, and iv) a sudden spike in commodity prices.

Table 1: Peers Comparison

Source: Companies, TA Securities

Sector & Stock Recommendation Guideline

Disclaimer
The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein.

As of Thursday, August 07, 2025, the analyst, Chan Mun Chun, who prepared this report, has interest in the following securities covered in this report: (a) nil