Goldman Sachs: Most semiconductor shipment growth in September was below seasonal levels, but overall shipments remained above the long-term trend

Did shipments weaken in September?

According to Semiconductor Industry Association (SIA) data, integrated circuit shipments excluding memory chips rose about 13% month on month in September, but the increase was below the historical seasonal level for the same period; most subcategories showed a similar pattern. This result followed exceptionally strong shipments in August.
Over a longer observation window, the three-month moving average of overall semiconductor shipments was about 13% above the long-term demand trend, compared with about 10% in August. A below-seasonal increase in a single month is not inconsistent with the cumulative recovery over recent months.

Analog chip shipments rose about 15.6% month on month in September, slightly below the historical level for the same period; however, their three-month moving average was 13.3% above the long-term trend, compared with 11.0% above it in August.
Microcontroller (MCU) shipments rose about 21.7% month on month in September, outperforming historical seasonality, but their three-month moving average remained 18.7% below the long-term trend, compared with 20.9% below it in August. The recovery is narrowing the gap, while shipment levels remain below trend.

DRAM shipments rose 3% month on month in September, below historical seasonality; revenue rose 17% month on month, well above seasonality.
NAND shipments rose 8% month on month, making it one of the few categories to exceed seasonal levels; however, revenue rose 7% month on month, slightly below seasonality. Goldman Sachs believes NAND shipment performance is consistent with its positive view on NAND’s growing role in AI inference.

Goldman Sachs expects semiconductor shipments to stabilize above the long-term trend over the medium term. Its reasons include shipments having remained below trend for an extended period over the past four years and more positive comments about improving demand from management teams at analog chip companies it covers.
The bank highlighted improving demand in data centers, aerospace and defense, and industrial markets, and favors Microchip, NXP and Analog Devices: these companies’ shipments deviated further below trend during the downturn, and they have greater exposure to end markets that Goldman Sachs believes will lead the analog chip recovery.