Worldwide semiconductor revenue to decline 3.6% in 2023
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Worldwide semiconductor revenue to decline 3.6% in 2023: Gartner

Worldwide semiconductor revenue to decline 3.6% in 2023: Gartner

The revenue is forecast to total $596bn in 2023, down from the previous forecast of $623bn

Gulf Business
semiconductor

Global semiconductor revenue is projected to decline 3.6 per cent in 2023, according to the latest forecast from Gartner.

The revenue is forecast to total $596bn in 2023, down from the previous forecast of $623bn.

In 2022, the market is on pace to grow 4 per cent and total $618bn.

“The short-term outlook for semiconductor revenue has worsened,” said Richard Gordon, practice vice president at Gartner. “Rapid deterioration in the global economy and weakening consumer demand will negatively impact the semiconductor market in 2023.”

Semiconductor revenue forecast, worldwide, 2021-2023 (millions of US dollars)

  2021 2022 2023
Revenue 595 618 596
Growth (%) 26.3 4.0 -3.6

Currently, the semiconductor market is polarised between the consumer-driven markets and enterprise-driven markets. Weakness in the consumer-driven markets is being driven largely by the decline in disposable income caused by rising inflation and interest rates, but also by the reprioritisation of consumer discretionary spending to other areas such as travel, leisure and entertainment, which are having a negative knock-on effect on technology purchases.

On the other hand, the enterprise-driven markets, such as enterprise networking, enterprise compute, industrial, medical and commercial transportation, have, so far, been relatively resilient despite looming macro-economic slowdown and geopolitical concerns.

“The relative strength in the enterprise-driven markets comes from strategic investments by corporations that are looking to strengthen their infrastructure to continue supporting their work from home workforce, business expansion plans and ongoing digitalisation strategies,” said Gordon.

Memory revenue to decline 16% in 2023
For the remainder of 2022, the memory market is witnessing faltering demand, swollen inventories and customers pressing for considerably lower prices. As a result, the memory market will remain flat in 2022 and is forecast to decline 16.2 per cent in revenue in 2023.

The worsening economic outlook is negatively impacting smartphone, PC and consumer electronics production which is positioning the DRAM market for oversupply for the remainder of 2022 and the first three quarters of 2023. Gartner analysts foresee DRAM revenue to decrease 2.6 per cent to reach $90.5bn in 2022 and will further decline 18 per cent in 2023, to total $74.2bn.

The NAND fab outage which occurred in the first quarter of 2022 increased prices and masked the rapidly deteriorating demand environment, resulting in excess inventory in the third quarter of 2022 which is expected to carry into the first half of 2023. NAND revenue is projected to increase 4.4 per cent to $68.8bn in 2022, but it is on pace to decline 13.7 per cent in 2023 to $59.4bn.

“While the deterioration in the macroeconomic environment will weaken consumer demand, we expect relatively better semiconductor consumption from business investments. Consequently, markets such as industrial, telecom infrastructure and data center will be less impacted by consumer sentiment and spending in the short term,” said Gordon.

Read: Gartner unveils top eight cybersecurity predictions for 2022-23

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