Global semiconductor revenue is projected to decline 11.2% in 2023, according to the latest forecast from management consulting firm Gartner. In 2022, the market totaled $599.6 billion, which was marginal growth of 0.2% from 2021.
The short-term outlook for the semiconductor market has deteriorated further. Global semiconductor revenue is forecast to total $532 billion in 2023.
“As economic headwinds persist, weak end-market electronics demand is spreading from consumers to businesses, creating an uncertain investment environment. In addition, an oversupply of chips which is elevating inventories and reducing chip prices, is accelerating the decline of the semiconductor market this year,” said Richard Gordon, Practice Vice President at Gartner.
Read more: Global PC industry suffers 30% shipment decline
Memory revenue decline
The memory industry is dealing with overcapacity and excess inventory, which will continue to put significant pressure on average selling prices (ASPs) in 2023. The memory market is projected to total $92.3 billion, a decline of 35.5% in 2023. However, it is on pace to rebound in 2024 with a 70% increase, the report observed.
The DRAM market will witness significant oversupply for most of 2023 due to weak end-equipment demand and high inventory levels despite flat bit production by DRAM vendors. Gartner analysts foresee DRAM revenue will decline 39.4% in 2023 to total $47.6 billion. The market will move to undersupply in 2024 and DRAM revenue is set to increase 86.8% as pricing rebounds.
Over the next six months, Gartner expects the dynamics for the NAND market will be similar to the DRAM market. Weak demand and significant vendor inventory will create oversupply resulting in strong price declines. As a result, NAND revenue is projected to decline 32.9% to $38.9 billion in 2023. In 2024, NAND revenue is projected to increase 60.7% due to a deep supply shortage.
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