WSTS lowers global chip market forecast for 2023

Feature articles | June 6, 2023

By Peter Clarke

semiconductor Artificial Intelligence sensors Analog Materials & processes silicon

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The World Semiconductor Trade Statistics organization has dropped its forecast for the chip market in 2023 and expects it to contract by 10.3 percent.

The global semiconductor market is predicted to reach US$515 billion in 2023 but the downturn will be followed by a robust recovery, with an estimated growth of 11.8 percent in 2024, said European Semiconductor Industry Association (ESIA) reporting the WSTS figures.

Even though WSTS has gone into double-figures with its forecast contraction it is still considerably more optimistic than Malcolm Penn of analysis firm Future Horizons (see Global chip market still headed for 20% decline in 2023, says Penn).

WSTS has adjusted its growth projections downwards in response to increasing inflation and weakening demand in end markets, particularly those relying on consumer spending. Although two primary categories, discrete and optoelectronics, are predicted to sustain single-digit year-over-year growth at 5.6 and 4.6 percent respectively in 2023, other categories are anticipated to shift into negative growth. This includes memory, which is forecasted to decline by approximately 35 percent year-over-year.

WSTS Spring 2023 forecast summary through 2024. Note: numbers in the table are rounded to whole millions of dollars, which may cause totals by region and by product groups to differ slightly. Source: WSTS.

In terms of geography, the Americas and Asia-Pacific including China, are expected to see market contractions of 9.1 and 15.1 percent, respectively. Both regions are exposed to consumer electronics. Europe and Japan, with less consumer electronics and a reliance on the automotive and industrial sectors, will maintain year-on-year growth.

However, in 2024 it is the Americas and Asia-Pacific regions that will led the recovery. Overall the global semiconductor market is forecasted to bounce back to US$576 billion. This expansion will primarily be driven by the memory segment, which is projected to recover to US$ 20 billion in 2024, marking an increase of 43.2 percent compared to the previous year. Nearly all other key categories, including discrete, sensors, analog, logic, and micro, are projected to exhibit single-digit growth.