Analyst shaves 2024 chip market growth forecast

Market news | August 27, 2024

By Peter Clarke

chip market

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Market researcher Semiconductor Intelligence has shaved its prediction for chip market growth in 2024 over 2023 to 17 percent, down from 18 percent given in February 2024.

This may be, in part, because of weakness in the chip market in 1Q24. However, from April onwards the market appears to have been gaining strength driven by a febrile atmosphere around artificial intelligence boosting sales of processors and driving up memory prices.

For 2025 global chip market growth is forecast to be between 11 percent and 15.6 percent according to multiple analysts.

The global semiconductor market reached $149.9 billion in 2Q24, according to the WSTS organization, up 6.5 percent from 1Q24 and up 18.3 percent from the same quarter a year before.

Global chip market climbed to US$150 billion in 2Q24

The leading semiconductor companies posted generally strong 2Q24 revenue gains compared to 1Q24. Of the top fifteen companies, only two – MediaTek and STMicroelectronics – saw revenue declines in 2Q24. The strongest growth was from the memory companies, with SK Hynix and Kioxia each up over 30 percent, Samsung Semiconductor up 23 percent and Micron Technology up 17 percent. The weighted average growth of the top fifteen companies in 2Q24 over 1Q24 was 8 percent, with the memory companies up 22 percent and the non-memory companies up 3 percent.

Global chip market forecasts for 2024 and 2025. Source: Semiconductor Intelligence.

Revenue guidance for 3Q24 versus is positive, but with a wide range of outlooks. AMD expects 3Q 2024 revenue to increase sequentially by 15 percent based on strong growth in data center and client computing. Micron indicated the memory boom will continue, with supply below demand, and guided for 12 percent growth.

Companies that project low 3Q24 revenue growth of about 1 percent include: Intel, MediaTek and STMicroelectronics. STMicroelectronics and NXP Semiconductors expect automotive to improve in 3Q24, but inventory issues remain in the industrial sector.