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Global semiconductor market declines for second consecutive quarter Strong demand for automotive and artificial intelligence chips

Update time : 2022-12-27 11:25:28

Global semiconductor revenue was US$147 billion in the third quarter of this year, down 7% from US$158 billion in the second quarter. This is the second consecutive quarter of decline in the global semiconductor market, following a decline of around 2% in the second quarter relative to the first quarter.

Why does the semiconductor market continue to shrink and widen? Experts analyse that the main reason is the sluggish demand for consumer electronics. According to statistics, personal computers, mobile phones, tablets and other consumer electronics upstream and downstream demand for chips accounted for about 70% of the total market, and shipments of these products have declined significantly in the third quarter, chip demand also followed the decline.
Han Xiaomin, general manager of Tibco Consulting, said: "In the past two years, many downstream customers stock up on inventory, inventory pulled a little too high, this year in the case of a decline in demand, we are in the stage of inventory. So the average unit price this year is in fact also not very good, the whole communication semiconductor market is a relatively weak, in a down state."
From a structural point of view, there are also incremental markets for semiconductors, one of which is automotive chips. Chen Shihua, deputy secretary-general of the China Association of Automobile Manufacturers, revealed that the current shortage of automotive chips still exists. "Now the shortage of chips compared with last year, I should say from a comprehensive shortage to a structural shortage. But because cars need many chips, the types of chips missing are different, which one chip is missing, the vehicle will not be able to be handed over to consumers in the end."
Han Xiaomin analysis, the automotive market there are two major trends of electrification and networking, the number of chips needed for a single vehicle has increased a lot more than before, which is the main reason for the release of automotive chip demand.
"From a global perspective, it should be said that the car sales are not much growth, and even in single-digit decline, but automotive semiconductors this year is estimated to have a growth of about 15%. Or car inside the structural problems, is this year's new energy vehicles in the continued release, including electrification or intelligent share of some in the promotion." Han Xiaomin introduced.
Another incremental market for global semiconductors is in the field of industrial automation control and artificial intelligence. Chen Jun, deputy general manager and chief analyst of Group Intelligence Consulting, expects that especially in the field of artificial intelligence, the growth rate of demand for some chips can reach double digits.
Chen Jun said: "Industrial control is actually more from the industrial automation driven by Industry 4.0, including artificial intelligence, Internet of Things and so on. The demand for this piece is still in a positive growth phase. The annual growth rate of industrial control should be around 7%-8%. Artificial intelligence, the Internet of things, to AR, VR, then, at least maintain the growth of more than 10%-15%."
Overall, whether it is automotive chips or artificial intelligence chips, the proportion of the whole market is still not high, so the trend of the semiconductor market mainly depends on consumer electronics products. Chen Jun believes that, from the supply and demand situation, the global semiconductor market downturn may continue until the end of next year.
"For the entire semiconductor chip, the future of production capacity is always increasing. From the end of this year to the end of next year, the basic increase in production capacity is about 9%, at this time the supply is increasing. For next year's demand, our overall view is basically the same as this year, or perhaps even worse than this year. So overall, if we look at 2023, we should be in a phase where supply is relatively greater than demand." Chen Jun said.

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