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Gartner Forecasts Deteriorating Semiconductor Prospects

Update time : 2022-11-30 09:18:55

According to Gartner, Inc.'s latest forecast, global semiconductor revenues are expected to decline by 3.6% in 2023. By 2022, however, the market is expected to grow by 4 per cent to reach a total of $618 billion.

The near-term outlook for semiconductor revenues has deteriorated," said Richard Gordon, vice president of Gartner. "The rapid deterioration of the global economy and weakening consumer demand will have a negative impact on the semiconductor market in 2023." Global semiconductor revenues are expected to total $596 billion in 2023, down from a previous forecast of $623 billion.
The semiconductor market is currently polarised between a consumer-driven market and a corporate-driven market. The weakness in the consumer-driven market is mainly due to falling disposable incomes due to inflation and rising interest rates, but also due to a reprioritisation of consumer discretionary spending to other areas such as travel, leisure and entertainment, which are having a knock-on effect of negatively impacting technology purchases. On the other hand, corporate-driven markets such as enterprise networking, enterprise computing, industrial, healthcare and commercial transportation have so far remained relatively resilient, despite the looming macroeconomic slowdown and geopolitical concerns.
Gordon said, "The relative strength of the enterprise-driven markets comes from strategic investments by companies looking to strengthen their infrastructure to continue to support their work from home, business expansion plans and ongoing digital strategy efforts."
The deteriorating economic outlook is negatively impacting the production of smartphones, PCs and consumer electronics, leaving the DRAM market in a state of oversupply for the remainder of 2022 and the first three quarters of 2023. gartner analysts expect DRAM revenues to decline by 2.6% to $90.5 billion in 2022 and to decline a further 18% to $74.2 billion in 2023.
NAND revenues are expected to increase to decline by 4.4% to $68.8 billion in 2022, but will decline by 13.7% to $59.4 billion in 2023.
"While the deteriorating macroeconomic environment will weaken consumer demand, we expect relatively good semiconductor consumption from corporate investment. As a result, markets such as industrial, telecoms infrastructure and data centres will be less affected by consumer confidence and spending in the near term," Gordon said.
According to WSTS, the semiconductor market declined by 6.3 per cent in the third quarter of 2022 compared to the second quarter of 2022. Based on the outlook for the fourth quarter of 2022, the second half of 2022 will be more than 10 per cent lower than the first half of 2022. semiconductor Intelligence forecasts a 14 per cent decline in 2023, which would be the largest decline in the semiconductor market since a 32 per cent drop 21 years ago in 2001. In the last 50 years, the market has only seen double-digit declines in three years: 1975, 1985 and 2001.

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