TECHCET Comments: In the last two days both WSTS and Gartner gave negative growth for semi market in 2023.
WSTS Semiconductor Market Forecast Fall 2022
The World Semiconductor Trade Statistics (WSTS) has released its new semiconductor market forecast generated in November 2022.
The Worldwide Semiconductor Market is expected to slow to 4.4 percent growth in 2022, followed by a decline of 4.1 percent in 2023.
Following a strong growth of 26.2 percent in the year 2021, WSTS revised its forecast down to a single digit growth for the worldwide semiconductor market in 2022 with a total size of $580 billion, up 4.4 percent.
WSTS forecast lowered growth estimation as inflation rises and end markets seeing weaker demand, especially those exposed to consumer spending. While some major categories are still expected to see double-digit year-over-year growth in 2022, led by Analog with 20.8 percent, Sensors with 16.3 percent, and Logic with 14.5 percent growth. Memory is expected to tourns negative in the forecast and decline with 12.6 percent year over year.
In 2022, all geographical regions are seen to show double-digit growth except Asia Pacific. The largest region, Asia Pacific, is expected to decline 2.0 percent. The Americas region is expected to show growth of 17.0 percent, Europe 12.6 percent, and Japan 10.0 percent.
Worldwide Semiconductor Market is expected to decline slightly in 2023
For 2023, the global semiconductor market is projected to decline by 4.1 percent to US$ 557 billion, driven by the Memory segment. In this latest forecast, this category is projected to fall to US $112 billion in 2023, dropping by 17% compared the previous year. Some other major categories showing single digit growth like Optoelectronics, Sensors, Discrete and Analog.
All regions are expected to remain flat in 2023, only Asia Pacific is estimated to decline with 7.5 percent year over year.
World Semiconductor Trade Statistics (WSTS) was founded in 1986 as a non-profit organization of semiconductor product companies and is the industry’s only source for monthly industry shipment statistics.
Original article: Recent News Release (wsts.org)
Gartner Forecasts Worldwide Semiconductor Revenue Growth to Decline 3.6% in 2023
Oversupply Becomes Inevitable with the Worsening Economic Situation
Global semiconductor revenue is forecast to total $596 billion in 2023, down from the previous forecast of $623 billion (see Table 1).
Table 1. Semiconductor Revenue Forecast, Worldwide, 2021-2023 (Billions of U.S. Dollars)
Source: Gartner (November 2022)
Currently, the semiconductor market is polarized 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 reprioritization 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 digitalization 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% 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% to reach $90.5 billion in 2022 and will further decline 18% in 2023, to total $74.2 billion.
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% to $68.8 billion in 2022, but it is on pace to decline 13.7% in 2023 to $59.4 billion.
“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.
Gartner clients can read more in “Forecast Analysis: Semiconductors and Electronics, Worldwide.”
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