Like everything else, semiconductor revenue is expected to decline this year.


A semiconductor

Good news looks a little thin on the ground this year, and analyst company Gartner hasn’t changed that with its latest forecast. Semiconductor revenue, which totaled $599.6 billion in 2022, will decline 11.2 percent to $532 billion this year, the company said. While there is more uncertainty, things could pick up again in 2024, with Gartner forecasting an increase of 18.5 percent to $630.9 billion.

In 2022, it was clear that consumer demand was already low as growth was recorded at only 0.2 percent. This year, businesses are also losing interest in buying electronics due to the poor economic outlook. On top of these problems, there is an oversupply of chips in inventories that is pushing prices down. Eventually, inventories will run out and more purchases will have to be made.

Unsurprisingly, PC, tablet and smartphone semiconductor markets have stagnated after working from home during the pandemic. These represent 31% of semiconductor revenue in 2023. Fortunately, there are other sectors where demand is high. The automotive and industrial, military/civil aerospace semiconductor markets are expected to grow 13.8 percent to $76.9 billion this year.

in the future, Gartner believes. We will see smaller markets that could make demand for semiconductors a little more stable. These future markets include automotive, industrial, IoT, and military/aerospace. Commenting on the increasingly diverse markets, Richard Gordon, practice vice president at Gartner, said:

“End-market demand will be less exposed to consumer discretionary spending and more exposed to business capital spending. Supply chains will be more complex with many intermediaries and different channels to market, and different end-market needs. A variety of capabilities will be required to accomplish this.

One sector significantly hurting semiconductor demand is the memory industry. Revenue in this market is expected to decline by 35.5 percent this year. The problem with this market is that inventories are full, with low consumer demand. Oversupply means prices will fall, which will help them sell, but that will take time. Next year, Gartner says memory revenue will grow by 70 percent.


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