"Global Semiconductor Market to Contract Next Year... This Year's Growth Rate Slows Sharply to 7%"

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] The global semiconductor market is expected to contract next year. After showing a high growth rate in the 20% range last year, the semiconductor market's growth slowed to the 7% range this year, and it is forecasted to lead to a sales decline in the 2% range next year.

Market research firm Gartner projected on the 27th (local time) that global semiconductor industry sales this year will reach $639.218 billion (approximately 839.9 trillion KRW), a 7.4% increase compared to the previous year. Considering that last year's sales were $594.952 billion, a 26.3% increase from the previous year, this represents a reduction to about one-quarter of the previous growth rate and is a significant downward revision from the 13.6% sales growth forecast issued in the first quarter.

The bigger concern is next year. Gartner expects the global semiconductor market sales to decline by 2.5% to $623.087 billion compared to this year. This is attributed to reduced consumption of electronic devices such as PCs and smartphones, which contain semiconductors, due to recession concerns and interest rate hikes by major countries, leading to decreased semiconductor demand.

Gartner forecasts that PC shipments will decrease by 13.1% this year compared to last year, unlike the record highs in 2020 and 2021. Accordingly, semiconductor sales for PCs are expected to decline by a record 5.4% on an annual basis this year. Semiconductor sales for smartphones are projected to grow by only 3.1% this year, a significant slowdown compared to 24.5% growth last year.

Richard Gordon, Vice President at Gartner, stated, "Despite the gradual improvement in the semiconductor shortage, the global semiconductor market has entered a bear market," adding, "We have already confirmed weakness in the semiconductor end market as consumer spending decreases. Rising inflation, interest rate hikes, and energy price increases are putting pressure on consumers' disposable income." He continued, "The semiconductor market is entering a downcycle, which is not new but has happened before. While consumer demand is slowing, semiconductor sales in the data center market will last longer due to continued investment in cloud infrastructure, and this year is expected to see a 20% growth rate."

This content was produced with the assistance of AI translation services.