Global semiconductor market to grow 17% in 2024

Global semiconductor revenue is forecast to grow 16.8% in 2024 to total $624 billion, according to Gartner, Inc. In 2023, the market is forecast to decline 10.9% and reach $534 billion. Alan Priestley, VP Analyst at Gartner, attributed the decline in revenue in 2023 to reduced demand from smartphone and PC customers coupled with weakness in data centre/hyperscaler spending. “We are at the end of 2023 and strong demand for chips to support artificial intelligence (AI) workloads, such as graphics processing units (GPUs), is not going to be enough to save the semiconductor industry from double-digit decline in 2023,” Priestley said.

However, 2024 is forecast to be a bounce-back year where revenue for all chip types will grow — as indicated in the chart below — driven by double-digit growth in the memory market.

Semiconductors Revenue Forecast, Worldwide, 2021–2025 (billions of US dollars). Image credit: Gartner (December 2023)

Gartner revealed that although the global memory market recorded a 38.8% decline in 2023, it will rebound in 2024 by growing 66.3%. Anaemic demand and declining pricing due to massive oversupply will lead NAND flash revenue to decline 38.8% and fall to $35.4 billion in revenue in 2023. Over the next three to six months, NAND industry pricing is slated to hit bottom, with conditions to improve for vendors. Gartner analysts forecast a recovery in 2024, with revenue growing up $53 billion, up 49.6% year-over-year.

Due to the high oversupply level and lack of demand, DRAM vendors are chasing the market price down to reduce inventory. Through the fourth quarter of 2023, the DRAM market’s oversupply will continue, thereby triggering a pricing rebound. However, the full effect of pricing increases will only be seen in 2024, when DRAM revenue is expected to increase 88% to total $87.4 billion.

Developments in generative AI and large language models will drive demand for the deployment of high-performance GPU-based servers and accelerator cards in data centres. This creates a need for workload accelerators to be deployed in data centre servers to support training and inference of AI workloads. Gartner analysts estimate that by 2027, the integration of AI techniques into data centre applications will result in more than 20% of new services including workload accelerators.

Top image credit: iStock.com/Bet_Noire