Decreased demand but promising opportunities
The World Semiconductor Trade Statistics (WSTS) has published a new report forecasting a 9.4% decline in the global semiconductor market in 2023. This updated projection is less drastic than the anticipated drop predicted in May 2023, due to stronger-than-anticipated semiconductor sales during the second and third quarters. Experts in the field believe that increased sales may be a result of tech companies rapidly adapting to changes in the market and implementing innovative manufacturing techniques. Despite the expected decline in 2023, ongoing technological advancements and the growing demand for more advanced devices continue to offer promising opportunities for industry growth in the years to come.
Market analysis: Differing trends for Integrated Circuit and Discrete Semiconductor
WSTS anticipates that the worldwide semiconductor market will shrink to $520 billion this year as a result of decreased demand in all Integrated Circuit categories, including Analog, Micro, Logic, and Memory, with declines of up to 8.9%. Conversely, the Discrete Semiconductor segment is projected to grow by 5.8%, primarily fueled by increased demand for Power Semiconductors. This surge in Power Semiconductor demand can be attributed to the rapid development of electric vehicles, renewable energy, and data centers requiring more efficient power management systems. Notwithstanding the overall reduction, the industry remains optimistic as innovative technologies, such as IoT, artificial intelligence, and 5G networks, offer potential growth opportunities in the upcoming years.
Regional breakdown: Europe stands out
In terms of regional markets, Europe is expected to see a 5.9% increase. Meanwhile, other regions are predicted to experience downturns, with the Americas falling 6.1%, the Asia Pacific region witnessing a 14.4% drop, and Japan experiencing a 2% decline. This contrasting growth could be attributed to Europe’s proactive steps towards sustainable development and digital transformation, propelling their market forward. In comparison, economic uncertainties and political challenges in the Americas, Asia Pacific, and Japan could be contributing factors to their declining market performances.
Future prospects: Recovery in 2024
Despite the forecasts for 2023, WSTS predicts a robust recovery in 2024, with the semiconductor market exhibiting a strong growth rate of 13.1%, largely driven by surging demand in the memory sector. This surge in the memory sector is expected to result from advancements in emerging technologies such as artificial intelligence, 5G, and the Internet of Things, as these technologies require the use of memory-rich chips. Additionally, the expansion of data centers across the globe will contribute to this increase in memory demand, which in turn will support the overall growth of the semiconductor market.
Category outlook: Steady expansion
Other essential categories, such as Discrete, Sensors, Analog, Logic, and Micro, are expected to experience single-digit growth. Additionally, these categories will contribute positively to the overall trajectory of the market, as their relevance increases with the expansion of technology-driven industries. Future innovations and increasing demand from various sectors will further propel this modest yet significant growth in these crucial categories.
Global implications: Growth for all regions in 2024
Moreover, all regional markets are anticipated to see growth in 2024. The upswing can be attributed to factors such as technological advancements, increasing consumer demand, and supportive government policies. Market players are expected to capitalize on this growth by innovating their product offerings and exploring untapped regions.
First Reported on: tipranks.com
FAQs
What is the expected decline in the global semiconductor market in 2023?
The World Semiconductor Trade Statistics (WSTS) forecasts a 9.4% decline in the global semiconductor market in 2023. However, this decline is less drastic than the decline predicted in May 2023 due to stronger-than-anticipated semiconductor sales.
Which semiconductor segment is predicted to grow in 2023, and what is driving this growth?
The Discrete Semiconductor segment is projected to grow by 5.8%, primarily fueled by increased demand for Power Semiconductors. This increase in demand can be attributed to the rapid development of electric vehicles, renewable energy systems, and data centers requiring more efficient power management systems.
What is the future market outlook for the semiconductor industry?
WSTS predicts a robust recovery in 2024, with the semiconductor market exhibiting a strong growth rate of 13.1%, largely driven by surging demand in the memory sector. Future innovations and increasing demand from various sectors will further propel this growth in other essential categories like Discrete, Sensors, Analog, Logic, and Micro.
Which regional market is expected to grow in 2023, and why?
Europe is expected to see a 5.9% increase in 2023, mainly due to its proactive steps towards sustainable development and digital transformation. In contrast, the Americas, Asia Pacific, and Japan are predicted to experience downturns, partly due to economic uncertainties and political challenges.
What’s the outlook for the global semiconductor market in 2024?
All regional markets are anticipated to see growth in 2024, with factors such as technological advancements, increasing consumer demand, and supportive government policies contributing to the upswing. Market players are expected to capitalize on this growth by innovating their product offerings and exploring untapped regions.
