Semiconductor Industry Will Face Long-term Challenges In The Decade To Come, Says Gartner

Published  May 2, 2023   0
S Staff

The survey report further added that revenue of DRAM will reduce by 39.4 percent this year to USD 47.6 billion

Global research firm Gartner has now published its new survey report, which highlighted that towards the end of 2023, the revenue of the international semiconductor industry is anticipated to slump by 11.2 percent. The report also added that in 2022, the industry’s revenue amounted to a total of USD 599.6 billion, which was a very minimal growth of o.2 percent from 2021.

This year, it also predicted that the memory industry would put a huge pressure on the average selling price (ASP) this year as it is coupled with excess inventory and overcapacity. This year, this market is speculated to reach USD 92.3 billion, which is a reduction of 35.5 percent. Nonetheless, it depends on the pace how the industry will reshape in 2024 with a 70 percent escalation. 

The dynamic random access memory (DRAM) market on the other hand, will see a huge oversupply for the entire 2023, which is due to low end-equipment demand and higher inventory levels notwithstanding a bit of slow production by the DRAM vendors, says Gartner. The survey report further added that revenue of DRAM will reduce by 39.4 percent this year to USD 47.6 billion. According to a report by ANI, the market will move to undersupply in 2024 and DRAM revenue is set to increase 86.8 percent as pricing rebounds.

Richard Gordon, Practice Vice-President, Gartner told the media, "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."

Gartner also predicted that in the coming few months, the momentum for the NAND market will be the same as that of the DRAM market. Weak demand and significant vendor inventory will create oversupply resulting in strong price declines. As a result, NAND revenue is projected to decline 32.9 percent to USD 38.9 billion in 2023. In 2024, NAND revenue is projected to increase 60.7 percent due to a deep supply shortage.

The semiconductor industry is facing a number of long-term challenges in the decade to come," said 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."