Global chip market flat in 2022, Intel slumped

Market news | January 17, 2023

By Peter Clarke

Analog semiconductor ranking

The global chip market crept over the $600 billion line in 2022 with an annual rise of just 1.1 percent, while Intel’s revenue fell nearly 20 percent, according to Gartner.

The market research firm was over-optomistic during 2022 with its forecast of 7.4 percent growth in July trimmed to 4 percent in November and now coming in at just 1.1 percent. This does not auger well for a market look set to contract in 2023.

Gartner states semiconductor market was worth $601.7 billion in 2022 up from $595 billion in 2021, according to preliminary results. The combined revenue of the top 25 semiconductor vendors increased 2.8 percent in 2022 and accounted for 77.5 percent of the market.

“2022 began with many semiconductor devices in shortage resulting in extended lead times and increasing pricing which led to reduced electronic equipment production for many end markets. As a result, OEMs started hedging themselves from shortages by stockpiling chip inventory,” said Andrew Norwood, vice president and analyst at Gartner, in a statement.

“However, by the second half of 2022, the global economy began to slow under the strain of high inflation, rising interest rates, higher energy costs and continued Covid-19 lockdowns in China, which impacted many global supply chains. Consumers also began to reduce spending, with PC and smartphone demand suffering, and then enterprises starting to reduce spending in anticipation of a global recession, all of which impacted overall semiconductor growth.”

The market was still somewhat bipolar in its response with memory revenue down 10 percent in 2022 and non-memory revenue up 5 percent.

Top 10 semiconductor vendors by global revenue in 2022 (Millions of US dollars). Source: Gartner Inc.

Samsung Electronics, a memory maker, stayed top of the Gartner ranking, although its semiconductor revenue declined 10.4 percent in 2022, primarily due to declines in memory and NAND flash sales. Intel held on to the No. 2 position despite suffering an even worse 19.5 percent revenue decline. Intel was hit by the decline of the consumer PC market and competition in its x86 processor businesses.

Intel’s slump was a contrast to the exceptional growth achieved by rival processor provider AMD which increased its revenue 42.9 percent.

Gartner reckons memory accounted for around 25 percent of semiconductor sales in 2022 and was the worst-performing device category, experiencing a 10 percent revenue decrease.

Overall nonmemory revenue grew 5.3 percent in 2022. The strongest growth came from analog with a 19 percent increase, closely followed by discretes, up 15 percent from 2021. The growth for both analog and discretes was driven by automotive and industrial demand.

Gartner did not comment on its forecast for the global chip market in 2023. In July 2022 Gartner forecast an annual contraction of 2.5 percent in 2023 and increased that to 3.6 percent in November. In contrast Malcolm Penn, of Future Horizons is predicting a 22 percent in 2023.