Market researchers agree that the 2023 semiconductor market will contract, but how much is a matter of debate. Projecting a 3.6 percent shrink, Gartner is the most optimistic. “The short-term outlook for semiconductor revenue has worsened,” says Richard Gordon, vice president at Gartner. “Rapid deterioration in the global economy and weakening consumer demand will negatively impact the semiconductor market in 2023.” Enterprise-driven markets, however, will contain the damage.
The World Semiconductor Trade Statistics (WSTS) and IC Insights are in the same ballpark, with the former predicting a 4.1 percent decline and the latter 5 percent. “Adverse conditions that stunted semiconductor sales in the second half of 2022 are expected to persist through the first half of next year. A global economy that’s struggling through a recession, soft demand for new enterprise and personal computers and smartphones, elevated chip inventory levels and continued weakness in the memory IC market are expected to reduce total semiconductor sales by 5 percent next year,” IC Insights writes.
The Semiconductor Intelligence forecast is significantly lower, coming in at a 14 percent decline in 2023. However, if inventory corrections don’t settle down in two to three quarters, PC and smartphone sales don’t return to pre-pandemic trends by mid-2023 and a global recession kicks in, the annual decline could be more than 20 percent, the market researcher thinks.
Future Horizons is by far the most pessimistic, projecting a 22 percent decline. CEO Malcolm Penn takes issue with the assumption of his colleagues that the automotive, industrial and enterprise-driven markets will stay robust, he told EENews Europe. “Automotive may still be strong today, but that’s because there was a backlog, but that market will also suffer eventually as will industrial electronics and others,” he said.
