Worldwide semiconductor revenue is projected to drop 3.6% in 2023, as per the Gartner forecast. In 2022, the market is on pace to grow 4% and total $618 billion. Forecast data shows that the revenue to reach a total of $596 billion in 2023, down from the previous forecast of $623 billion.
“The short-term outlook for semiconductor revenue has worsened,” said Richard Gordon, Practice Vice President at Gartner. “Rapid deterioration in the global economy and weakening consumer demand will negatively impact the semiconductor market in 2023.”
The semiconductor market is polarized between consumer- and enterprise-driven markets. Downfall in the consumer-driven markets is mainly driven by the decline in disposable earnings caused by growing inflation and interest rates, but also by the reprioritization of consumer discretionary spending to other areas such as travel, leisure, and entertainment having a negative knock-on effect on technology purchases.
And the enterprise-driven markets, such as enterprise networking, enterprise computing, industrial, medical and commercial transportation, have, so far, been relatively resilient despite looming macro-economic downshift and geopolitical challenges.
Memory Revenue to Decline 16% in 2023
For the remainder of 2022, the memory market is witnessing faltering demand, swollen inventories and customers pressing for considerably lower prices. As a result, the memory market will remain flat in 2022 and is forecast to decline 16.2% in revenue in 2023.
The worsening economic outlook is negatively impacting smartphone, PC and consumer electronics production which is positioning the DRAM market for oversupply for the remainder of 2022 and the first three quarters of 2023. Gartner analysts foresee DRAM revenue to decrease 2.6% to reach $90.5 billion in 2022 and will further decline 18% in 2023, to total $74.2 billion.
The NAND fab outage, which occurred in the first quarter of 2022 increased prices and masked the rapidly deteriorating demand environment, resulting in excess inventory in the third quarter of 2022, which is expected to carry into the first half of 2023. NAND revenue is projected to increase 4.4% to $68.8 billion in 2022, but it is on pace to decline 13.7% in 2023 to $59.4 billion.
Source: Gartner
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