In most of the semiconductor market the chip shortage issue is resolving, the lead time is coming down, the prices are stabilising or falling in some cases, and in some markets such as PC market, the consumption of semiconductors is estimated to decline. Market researcher Gartner has confirmed these trends where it adjusts semiconductor market growth in 2022 to 7.4%, earlier a quarterback it had forecasted13.6% growth in 2022.
“Although chip shortages are abating, the global semiconductor market is entering a period of weakness, which will persist through 2023 when semiconductor revenue is projected to decline 2.5%,” said Richard Gordon, Practice VP at Gartner. “We are already seeing weakness in semiconductor end markets, especially those exposed to consumer spending. Rising inflation, taxes and interest rates, together with higher energy and fuel costs, are putting pressure on consumer disposable income. This is affecting spending on electronic products such as PCs and smartphones.”
The latest findings and other comments shared by Gartner includes:
Overall, 2022 global semiconductor revenue has been reduced from the previous quarter’s forecast by $36.7 billion, to $639.2 billion, as economic conditions are expected to worsen through the year (see Table 1). Memory demand and pricing have softened, especially in consumer-related areas like PCs and smartphones, which will help lead the slowdown in growth.
PC shipments are set to decline by 13.1% in 2022 after recording growth in 2020 and 2021. Semiconductor revenue from PCs is estimated to record a decline of 5.4% in 2022. Semiconductor revenue from smartphones is on pace to slow to 3.1% growth in 2022, compared to 24.5% growth in 2021.
From an enterprise perspective, inventories are recovering rapidly, lead times are beginning to shorten, and prices are starting to weaken.
“The semiconductor market is entering an industry down cycle, which is not new, and has happened many times before,” said Gordon. "While the consumer space will slow down, semiconductor revenue from the data center market will remain resilient for longer (20% growth in 2022) due to continued cloud infrastructure investment. In addition, the automotive electronics segment will continue to record double-digit growth over the next three years as semiconductor content per vehicle will increase due to the transition to electric and autonomous vehicles. The semiconductor content per vehicle is projected to increase from $712 in 2022 to $931 in 2025.”