Chip market recession hit its fifth quarter in 1Q23, says Omdia
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The semiconductor market declined in revenue for a fifth consecutive quarter in 1Q23, according to market analyst Omdia.
The recession is the longest-running one since Omdia began tracking the chip market in 2002 and the prospects for 2Q23 do not look good according to other market researchers.
Omdia said chip revenue in 1Q23 was US$120.5 billion, down 9 percent from 4Q22. This is almost exactly in line with the forecast of Malcolm Penn of Future Horizons – US$119.5 billion (see Global chip market still headed for 20 percent decline in 2023, says Penn). Future Horizons forecasts the 2Q23 to decline by between 3.5 and 7.0 percent sequentially before likely seasonal growth in 3Q23.
Omdia said that memory and microprocessor markets are the major areas contributing to the market decline due to weakness in consumer-oriented markets such as mobile phones and personal computers.
Global chip market by quarterly revenue. Source: Omdia.
The MPU market in 1Q23 was US$13.1 billion, just 65 percent of its size in 1Q22 when it was $20 billion. The memory market fared worse, with 1Q23 coming in at $19.3 billion, just 44 percent of the market in 1Q22 when it was $43.6 billion. The combined MPU and memory markets declined 19 percent in 1Q23, dragging the market down to the 9 percent quarter-over-quarter (QoQ) decline.
“The semiconductor market is plagued by a lack of demand that has continued for multiple quarters and resulted in declining ASPs [average selling prices] for many components. However, there is demand thanks to generative AI,” said Cliff Leimbach, senior analyst, in a statement. “Nvidia has seen strong revenue growth as they lead in this space, reversing the performance of most semiconductor companies to begin 2023, but other semiconductor companies have yet to take advantage of this space in a similar way.”
Top ten chip vendors by revenue in 1Q23. Source: Omdia.
The impact of the declining memory market over several quarters has kicked SK Hynix and Micron out of the top-ten ranking of chip vendors. One year ago, three of the top five semiconductor companies by revenue were memory companies. Samsung has dropped to second position. A year ago the three memory makers occupied three of the top five spots.
Infineon moved into the top ten this year following an 11 percent increase QoQ due to its strength in the automotive sector.
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News articles:
Global chip market still headed for 20 percent decline in 2023, says Penn
Memory prices expected to fall further in 2Q23
Europe shone as chip market fall slowed in April
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