Global chip market to decline 11% in 2023, says Gartner

Global chip market to decline 11% in 2023, says Gartner

Market news |
By Peter Clarke

Global semiconductor revenue will decline to US$532.2 billion in 2023, a decline of 11.2 percent, according to Gartner. The market will then grow 18.5 percent to reach an annual value of US$630.9 billion in 2024, the analyst predicts.

In 2022, the market totalled US$599.6 billion, which was marginal growth of 0.2 percent from 2021, the firm reckons.

Gartner’s take on this year’s decline – while considerably more than the 3.5 percent it was previously predicting – remains a long way short of the 22 percent contraction that Malcolm Penn of Future Horizons has been predicting since September 2022 (see Some market forecasters are in denial, says Future Horizons’ Penn).

Richard Gordon, vice president at Gartner, said the situation had become worse recently leading Gartner to renew its forecast.

“As economic headwinds persist, weak end-market electronics demand is spreading from consumers to businesses, creating an uncertain investment environment. In addition, an oversupply of chips which is elevating inventories and reducing chip prices, is accelerating the decline of the semiconductor market this year,” Gordon said in a statement.


One of the big dampeners on the chip market is memory overcapacity and excess inventory. This will continue to put pressure on average selling prices (ASPs) in 2023.

Gartner analysts foresee DRAM revenue declining 39.4 percent in 2023 to total US$47.6 billion. The market will move to undersupply in 2024 and DRAM revenue is set to increase 86.8 percent as pricing rebounds.

Gartner expects the dynamics for the NAND market to be similar to the DRAM market. NAND revenue is projected to decline 32.9 percent to US$38.9 billion in 2023. In 2024, NAND revenue is projected to increase 60.7 percent due to a supply shortage.

As a result, Gartner predicts memory will total US$92.3 billion, a decline of 35.5 percent from its value in 2022. But it will rebound in 2024 with a 70 percent increase in aggregate value.


“The semiconductor industry is facing a number of long-term challenges in the decade to come,” said Gordon. “The past decades of high volume, high-dollar content market drivers are coming to an end, notably in the personal computer, tablet and smartphone markets where technology innovation is lacking.”

In addition, Covid-19 and the US-China trade tension have precipitated a deglobalization trend and the rise of techno nationalism. “Governments around the world are scrambling to build self-sufficiency in the semiconductor and electronics supply chain. This is leading the incentivization of onshoring initiatives across the world.”

One implication of this deglobalization trend is to impose duplication of resources and higher costs on chipmakers. This in turn is likely to fragment production and impact prices.

Gordon said the PC, tablet and smartphone markets are stagnating devoid of compelling technology innovation. They are responsible for 31 percent of semiconductor revenue in 2023 and total $167.6 billion.

Meanwhile automotive, industrial and military/civil aerospace are growth markets for semiconductors. The automotive semiconductor market is forecast to grow 13.8 percent in 2023, to reach a value of US$76.9 billion.

Gordon said that in the future the chip market will be less exposed to consumer discretionary spending and more exposed to business capital spending.

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Some market forecasters are in denial, says Future Horizons’ Penn

Gartner remains bullish on 2023 chip market prospects

Global chip market contraction of 6% in 2023, says analyst

Chip market growth in 2023 will be ‘deeply negative’ says analyst

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