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Gartner slashes 2022 semiconductor market forecast, sees 2023 fall

Market news |
By Nick Flaherty

Global semiconductor market revenue will grow 7.4% in 2022, half the previous estimate, and fall 2.5% in 2023 says research firm Gartner.

This is down from 2021 growth of 26.3% and almost half the previous growth estimate of 13.6% growth in 2022 and compares to a forecast of 11% for 2023 by IC Insights in the US.

The decline is driven by falls in PC and mobile shipments as inflation and the risk of global recession rise. Analyst Malcom Penn of Future Horizons reduced his forecast for 2022 from 11% to 6% back in May, with a fall of up to 23% in 2023.

“Although chip shortages are abating, the global semiconductor market is entering a period of weakness, which will persist through 2023 when semiconductor revenue is projected to decline 2.5%,” said Richard Gordon, Practice VP at Gartner.

“We are already seeing weakness in semiconductor end markets, especially those exposed to consumer spending. Rising inflation, taxes and interest rates, together with higher energy and fuel costs, are putting pressure on consumer disposable income. This is affecting spending on electronic products such as PCs and smartphones.”

Overall, 2022 global semiconductor revenue has been reduced from the previous quarter’s forecast by $36.7 billion, to $639.2 billion, as economic conditions are expected to worsen through the year (see Table 1). Memory demand and pricing have softened, especially in consumer-related areas like PCs and smartphones, which will help lead the slowdown in growth.

However the data centre market and automotive will remain stronger.

Table 1. Semiconductor Revenue Forecast, Worldwide, 2021-2023 (Millions of U.S. Dollars)

 

2021

2022

2023

Revenue

594,952

639,218

623,087

Growth (%)

26.3

7.4

-2.5

Source: Gartner (July 2022)

PC shipments are set to decline by 13.1% in 2022 after recording growth in 2020 and 2021. Semiconductor revenue from PCs is estimated to record a decline of 5.4% in 2022. Semiconductor revenue from smartphones is on pace to slow to 3.1% growth in 2022, compared to 24.5% growth in 2021.

Inventories are recovering rapidly, lead times are beginning to shorten, and prices are starting to weaken, he said.

“The semiconductor market is entering an industry down cycle, which is not new, and has happened many times before,” said Gordon. “While the consumer space will slow down, semiconductor revenue from the data centre market will remain resilient for longer (20% growth in 2022) due to continued cloud infrastructure investment. In addition, the automotive electronics segment will continue to record double-digit growth over the next three years as semiconductor content per vehicle will increase due to the transition to electric and autonomous vehicles. The semiconductor content per vehicle is projected to increase from $712 in 2022 to $931 in 2025.”

www.gartner.com

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