Europe’s chip market shrinks as WSTS trims forecasts for 2025
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The European chip market is now expected to contract in 2024 even as the global chip market is growing, according to the World Semiconductor Trade Statistics organization (WSTS).
WSTS has raised its forecast for the global chip market in 2024, driven by growth in the Americas and Asia-Pacific regions, but at the expense of slower growth in 2025.
However, while it was able to increase its 2024 growth estimates for the Americas and Asia-Pacific from five months ago, to 38.9 and 17.5 percent respectively, it has tipped Europe into a 6.7 percent annual decline.
In its Fall forecast WSTS has uplifted its prediction for the global chip market in 2024 to be US$626.87 billion, an increase of 19.0 percent compared with the total in 2023. In the spring WSTS was forecasting a 16.0 percent jump.
WSTS Fall 2024 forecast summary including 2025. Note: numbers in the table are rounded to whole millions of dollars, which may cause totals by region and by product groups to differ slightly. Source: WSTS.
For 2025 WSTS is now predicting the global chip market will be at US$697.18 billion, an annual increase of 11.2 percent, down from the previous estimate of 12.3 percent growth. This still places WSTS amongst the more bullish of forecasters. Other estimates for 2025 range from 6 to 14 percent.
The raised short-term global chip market figures reflect improved performance in 2Q24 and 3Q24, especially in the computing sector driven by demand for chips to support AI.
Growth in 2024 will therefore be fuelled by memory, which is expected to increase by 81.0 percent, and logic, with a projected increase of 16.9 percent. Memory’s rise is mainly on the increase in average selling prices.
Europe has little or no computer manufacturing and is driven by the industrial and automotive sectors which have been hit by sluggish demand and inventory overhang.
As a result, such categories as Discrete, Optoelectronics, Sensors, and Analog Semiconductors are forecasted to see declines in 2024.
The following year’ forecast reflects a more traditional pattern with the storming growth in memory reined back but Discrete, Optoelectronics, Sensors, and Analog returning to single-digit percentage growth.
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