The weakening of the semiconductor market, due to inflation, Covid-related shutdowns in China, lingering supply-chain issues and the war in Ukraine has forced a downgrade at market research firm Semiconductor Intelligence.

The weakening global economy is expected to prompt declines in shipments of key driver products such as smartphones and personal computer. Automotive is one brighter sector.

As a result Semiconductor Intelligence has lowered its semiconductor market forecast for 2022 to 9 percent from 15 percent estimate given in February. This puts Semiconductor Intelligence in line with IC Insights and Future Horizons.

IC Insights kept its forecast at 11 percent (see 2022 chip market growth will be 11 percent despite headwinds, says IC Insights). Future Horizons is the most bearish of forecasters and has given a range of 6 to 10 percent growth in 2022 followed by a 23 percent crash in 2023. Semiconductor Intelligence said the weakness will continue in 2023 but quantified that as 3 percent growth. Other 2023 forecasts are 3.6 percent from Gartner and 5.1 percent from WSTS.

Top semiconductors vendors ranked by 1Q22 revenue. Source: Semiconductor Intelligence

Semiconductor Intelligence pointed out that four of top 14 semiconductor companies (Intel, Qualcomm, Nvidia and Texas Instruments) are expecting lower revenues in 2Q12 versus 1Q22. Usually there is growth but all four cited Covid-related lockdowns in China as a factor. The lockdowns significantly impacted manufacturing in China.

Six non-memory companies expect revenue growth in 2Q22 from 1Q22 ranging from 3 to 7 percent. Three of these companies (Infineon Technologies, STMicroelectronics and NXP Semiconductors) have significant automotive business contributing to their growth.

Memory companies have a brighter outlook than non-memory companies. Micron’s guidance for its fiscal quarter which ended in early June was an increase of 11.7% from the prior quarter. Samsung, SK Hynix and Kioxia all reported demand for both DRAM and flash memory remains solid.

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