The current downturn is proving worse than Gartner previously anticipated. The market researcher predicts that global semiconductor revenue will decline 11.2 percent this year, down from the February forecast of -6.5 percent and the November projection of -3.6 percent. “As economic headwinds persist, weak end-market electronics demand is spreading from consumers to businesses, creating an uncertain investment environment. In addition, an oversupply of chips, which is elevating inventories and reducing chip prices, is accelerating the decline of the semiconductor market this year,” comments Gartner’s Richard Gordon.
“The semiconductor industry is facing a number of long-term challenges in the decade to come,” adds Gordon. “The past decades of high-volume, high-dollar content market drivers are coming to an end, notably in the PC, tablet and smartphone markets where technology innovation is lacking. These high-volume markets have saturated and become replacement markets devoid of compelling technology innovation.” By contrast, both the automotive and industrial, military/civil aerospace semiconductor markets will achieve growth.
Despite this mixed bag, Gartner expects the market to recover in 2024, growing 16.3 percent.