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Semiconductor Boom: Global Market Skyrockets by 2024

Semiconductor Boom: Global Market Skyrockets by 2024

Semiconductor Skyrocket

Revised Outlook for the Semiconductor Market

IDC has recently revised its outlook for the semiconductor market and now forecasts a substantial increase in worldwide semiconductor sales by 2024. The projection indicates that the revenue of the chip sector will hit $633 billion in 2024 after a brief dip. This expansion is expected to be driven by a growing demand in the US and an uptick in demand from AI server and endpoint device producers. As the global economy continues to recover from the pandemic, the demand for advanced technologies and devices is also increasing, leading to a more optimistic forecast for the semiconductor industry. Additionally, the surge in investments in AI and IoT technologies, as well as the shift towards remote work and digital infrastructure, contribute to the market’s potential growth in the next few years.

Despite an anticipated drop in global semiconductor revenue from $598 billion in 2022 to $526.5 billion in 2023, IDC posits that the market will undergo a phase of expansion in 2024, attaining $6.33 billion.

Latter Half of 2024 Forecast

It is projected that the high inventory levels of PCs and smartphones will stabilize during the latter half of 2024, as the ongoing electrification of manufacturing equipment propels semiconductor content throughout the next ten years. This surge in semiconductor demand will be further fueled by the continued growth and adoption of technologies such as Artificial Intelligence (AI), 5G, and the Internet of Things (IoT) across various industries. As a result, semiconductor manufacturers are expected to invest in capacity enhancements, innovative production techniques, and research and development to meet the rising market requirements and maintain a competitive edge in the global landscape.

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IDC asserts that the launch of AI-integrated PCs and smartphones in the coming year, along with enhancements in the average selling prices of memory and DRAM bit volume, will lead to an increased necessity for semiconductors between 2024 and 2026. This anticipated demand will drive innovation in semiconductor manufacturing, encouraging companies to invest in cutting-edge technology and more efficient fabrication processes. As a result, consumers can expect improved performance, power efficiency, and computing capabilities in their devices, further propelling the adoption of AI technologies across various industries.

Stable Wafer Capacity Pricing

The study reveals that wafer capacity pricing is likely to remain stable in 2023. Nevertheless, capital expenditure is predicted to improve by the latter half of 2024 as revenue shipments align with end demand and US CHIPS ACT incentives stimulate investment throughout the supply chain. As a result of this stability, semiconductor manufacturers can focus on increasing production efficiency and improving technology to meet the growing demand for high-performance chips. Moreover, the projected growth in capital expenditure will enable the industry to tackle current supply chain challenges while fostering innovation and competitiveness.

Driving factors of Market Expansion

“The semiconductor market touched bottom and has started to expand on a quarter-over-quarter basis,” stated Mario Morales, group vice president of semiconductors and enabling technologies at IDC. This growth is primarily driven by the increasing demand for chips in various industries, such as automotive, consumer electronics, and data centers. Additionally, the ongoing shift towards more advanced technologies, like 5G and artificial intelligence, is expected to further propel the semiconductor market expansion in the coming years.

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Morales continued, “ASPs are getting better in DRAM, which is a positive early sign, and IDC anticipates that suppliers will persist in managing capacity additions and usage ratios to facilitate a long-lasting recovery.” Additionally, Morales highlighted that the continuous improvement in average selling prices (ASPs) will serve to benefit both suppliers and consumers in the long run. With careful planning and execution, the DRAM market could experience steady growth and stability, allowing for a more sustainable and profitable industry landscape.

AI Servers and Endpoint Devices Demand

He also emphasized that the surging demand for AI servers and AI-integrated endpoint devices would result in more semiconductor content during 2024-2026, sparking a new upgrade cycle among businesses. This increase in demand for AI technology will likely drive innovation and competition among semiconductor manufacturers, ensuring that cutting-edge AI solutions become even more efficient and accessible. As a result, businesses adopting these AI servers and integrated devices can expect higher performance and improved operational efficiency over the coming years.

AI Silicon and Semiconductor Revenues

The forecast estimates that AI silicon will comprise nearly $200 billion in semiconductor revenues by the conclusion of the projected period. This significant growth can be attributed to the increasing adoption of artificial intelligence technology in various industries, ranging from automotive to healthcare. As AI continues to develop and businesses realize the potential efficiency and cost-saving benefits, the demand for advanced AI silicon chips will rise in parallel, driving the semiconductor market to new heights.

Frequently Asked Questions

What is the revised outlook for the semiconductor market?

IDC has revised its outlook and forecasts a substantial increase in worldwide semiconductor sales, reaching $633 billion by 2024, driven by a growing demand in the US, AI server and endpoint device producers, and a recovering global economy.

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What factors are driving the market expansion?

The market expansion is driven by increasing chip demand in various industries such as automotive, consumer electronics, and data centers, as well as the ongoing shift towards advanced technologies like 5G and artificial intelligence.

What is the projected revenue for AI silicon in semiconductors by the end of the projected period?

The forecast estimates that AI silicon will comprise nearly $200 billion in semiconductor revenues by the conclusion of the projected period.

How will the demand for AI servers and endpoint devices impact the semiconductor industry?

The surging demand for AI servers and AI-integrated endpoint devices will result in more semiconductor content during 2024-2026, sparking a new upgrade cycle among businesses and driving innovation and competition among semiconductor manufacturers.

How is wafer capacity pricing predicted to change?

Wafer capacity pricing is likely to remain stable in 2023, with capital expenditure predicted to improve by the latter half of 2024 as revenue shipments align with end demand and US CHIPS ACT incentives stimulate investment throughout the supply chain.

What can consumers expect in terms of device performance as a result of these trends?

As semiconductor manufacturers invest in cutting-edge technology and more efficient fabrication processes, consumers can expect improved performance, power efficiency, and computing capabilities in their devices, further propelling the adoption of AI technologies across various industries.

First Reported on: computerworld.com
Featured Image Credit: Photo by Blaz Erzetic; Pexels; Thank you!

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