Year-end update on global semiconductor eco market in 2023

Date: 22/12/2023
The semiconductor market, particularly memory and PC processors, had a drastic fall starting mid-2022 and continued till the end of 1st quarter 2023, and the growth started turning up in the month of Mar 2023. Since then, except few low-end and highly matured technologies, the growth curve started climbing up and is estimated to grow in 2024. The growth of AI processor chip market is near vertical due to demand from AI Servers. Automotive-semiconductor also continue to grow faster. Here in this article, we tried to provide you the market figures/forecasts from semiconductor associations/organizations and market research groups, as well as revenue from selected semiconductor vendors, who can be treated as a good sample indicating the overall semiconductor market. We try to cover not only devices and also some key areas of semiconductor eco.

The most reliable source on global semiconductor market WSTS revised its latest forecast, where the total revenue is estimated at US$520 billion, a decline of 9.4% compared to year 2022. Category wise discrete semiconductors mainly power semiconductors have seen a growth of 5.8% in the year 2023 compared to 2022. Whereas IC chip market including analog, Micro, Logic, and memory fell by 8.9% in the year 2023 compared to year ago.

Semiconductor Market

Source: WSTS
Estimated geographic semiconductor growth/fall in 2023:
Europe: grew by 5.9%
Americas: fell by 6.1%
Asia-Pacific: fell by 14.4%
Japan: fell by 2%
where as in 2024, Americas and Asia Pacific to see double-digit growth compared to 2023, as per WSTS.

WSTS forecasts semiconductor market growth of 13.1% for the year 2024 to reach a total revenue of US$ 588 billion. In the year to 2024 memory market to bounce back in a big way to reach a total revenue of US$ 130 billion. Discrete, Sensors, Analog, Logic, and Micro, are estimated by WSTS to grow at single-digit growth rate.
Below table displays the data more clearly:
Semiconductor Market

Source: WSTS
If you are looking for latest month over month sales, Semiconductor Industry Association (SIA) reported a total sales of US$ 46.6 billion in the month of October 2023, a growth of 3.9% compared to September 2023. Below chart displays geographic breakup of details.
Semiconductor Market

Source: SIA

Semiconductor foundry market has picked up growth, we can see TSMC revenues back to 17+ Billion US$ in 3rd Quarter 2023 from 15+ Billion in 2nd Quarter 2023.

Intel has recovered from continous falls and has reported double digit quarterly growth in 3Q2023 compared to 2Q2023. AMD has maintained more stable performance compared to Intel.

Smart Phone AP vendor Mediatek has also reported double digit quarterly growth in 3Q 2023 compared to it's previous quarter.

Semiconductor memory makers have posted significant revenue growth starting from 2Q2023 and the growth is stable in 3rd Quarter 2023.

Please see the chart below:
Semiconductor Market

IDM chipmakers who focus more on automotive and industrial have also reported growing revenues in starting from 2Q2023 but only in single digit.

Please see the chart below:
Semiconductor Market

Some of the old mature technology dependent medium and small companies still seeing drop in revenue.

Please see the chart below:
Semiconductor Market

AI server market nearly sky-rocketing
AMD estimated a US$ 45 billion market for its data center AI processors for the year of 2023, up from a previous estimate of US$ 30 billion.

They launched two new AI chips, MI300X focused on generative AI and another for supercomputers, aiming to improve performance with high-bandwidth memory. AMD's MI300X is claimed to be 1.6 times faster and more efficient than Nvidia's H100, which could impact the market and influence the adoption of alternative AI chips.

This beats Gartner's previous AI Chip Revenue Forecast where it said a US$ 53.4 billion revenue opportunity in 2023 for AI semiconductors, expecting double-digit growth through 2027, reaching US$ 119.4 billion.
Meta, Microsoft, and other are gravitating towards AMD's AI chip from Nvidia to save cost and also some performance improvement.
As per survey Open source software and dedicated AI hardware are the key factors driving AI adoption. AI processors not only deliver performance but also reduce server station size.

The next attractive market both in terms of size and growth is automotive semiconductor chips:
This market was seeing chip shortage even in early 2023. But now there is no chip shortage, lead times have become normal.
Yole had reported automotive semiconductor chip market is expected to see robust growth, increasing from US$43 billion in 2022 to US$84.3 billion in 2028, with an impressive 11.9% CAGR during the period. In terms of number of chips it is estimated to be 100 billion by 2028. In 2022, each car contains around US$540 worth of semiconductor chips, which is projected to rise to about US$912 by 2028 by Yole.

NAND Flash:
in the 3rd quarter of 2023, the total revenue of NAND flash chips reached US$ 9.229 billion, a growth of 2.9% quarter over quarter compared to second quarter of 2023, as per TrendForce.

The foundry market:
After a relatively slower market in the second quarter of 2023, the leading top-10 semiconductor foundries are estimated to register a growth of 7.9% quarter over quarter to reach US$ 28.29 billion in the third quarter of 2023, as per TrendForce.

Below table indicates top-10 foundries and their Performance in the third quarter of 2023:
Semiconductor Market

Source: TrendForce
Semiconductor equipment market:
Semiconductor fabs are built using advanced precision manufacturing equipment let's look at this market in 3rd Q 2023:
Industry body SEMI reported global semiconductor equipment billings contracted 11% year-over-year to US$25.6 billion in the third quarter of 2023, while quarter-over-quarter billings slipped 1% during the same period. There was one exception of China where the quarterly billing grew compared to other geographic regions. It's a massive 42% growth in the Chinese semiconductor equipment market. Below chart and table provides more data on that:
Semiconductor Market

Semiconductor Market

Source: SEMI

The latest market data on EDA companies tells, they are growing faster and more stable than the other areas of chip-eco business.

Author: Srinivasa Reddy N
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