Global chip market to fall 5% in 2023, says IC Insights
Another market analyst has dropped forecasts for the size of the chip market in 2022 and 2023, but not by much.
IC Insights reckons the semiconductor market will increase by 3 percent in 2022 to reach a value of US$636.0 billion before falling 5 percent in 2023 to US$604.2 billion.
IC Insights has wiped US$44.6 billion of its estimate of the market in 2022. Last January it was forecasting 11 percent growth for 2022 and a market value of US$680.6 billion (see Chip market to rise 10.8% in 2022, says IC Insights).
Global semconductor market for ICs and optoelectronics, sensors, discretes (OSD) 2016 to 2023 (forecast). Source: IC Insights.
IC Insights’ take on the size of the 2023 market is more or less in line with Gartner’s most recent guess (see Gartner remains bullish on 2023 chip market prospects) but both are much more optimistic than Malcolm Penn’s Future Horizons. Penn forecasts a 22 percent contraction in 2023 (see Chip market growth in 2023 will be ‘deeply negative’ says analyst)
IC Insights references the same reasons as others for a market fall. Weakness of consumer demand due to post-pandemic inflation and cost-of-living shocks due to Russia’s invasion of Ukraine. This has led to a reduced memory demand, bloated memory inventories and collapsing average selling prices (ASPs) for DRAM and NAND flash.
These adverse conditions have hit 2H22 and will last through 1H23 IC Insights said. This will cause a decline of 6 percent for the IC market in 2023 and 5 percent for semiconductors overall. But IC Insights sees a long-term compound annual growth rate of 6.5 percent through to 2026.
Chip market growth in 2022 by product category, Source: IC Insights
In 2022, four major semiconductor product categories are forecast to post double-digit percentage sales gains. The microcomponents and optoelectronics segments are expected to grow by single-digit amounts. Only the highly cyclical memory market is forecast to post a decline – a 17 percent decline.
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