Gartner Forecasts Semiconductor Sales to Decline 11% to $532.2 Billion This Year

As the semiconductor industry downturn that intensified last year continues into this year, there is a forecast that the global semiconductor market size could shrink by 11.2%. In particular, the memory market size is expected to contract even more sharply this year, potentially shrinking by 35.3%.

On the 27th, market research firm Gartner projected that global semiconductor sales this year will reach $532.2 billion, down 11.2% from last year. Although the semiconductor market size last year ($599.6 billion) slightly increased by 0.2% compared to the previous year, it is expected that sales will decline this year as the semiconductor industry downturn intensifies.

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Richard Gordon, Vice President at Gartner, said, "Weak demand in the end market for electronic products is spreading from consumers to enterprises," adding, "The investment environment is also becoming increasingly uncertain." He further explained, "An oversupply of semiconductor chips is leading to increased inventory and falling chip prices, accelerating the market downturn this year."

Gartner forecasts that the memory semiconductor market, in particular, could face significant pressure on average selling prices (ASP) due to overproduction and inventory. As a result, the memory market size is expected to shrink by 35.3% to $92.3 billion this year. Specifically, the DRAM market is projected to decline by 39.4% to $47.6 billion, while the NAND market is expected to decrease by 32.9% to $38.9 billion.

However, next year, the market is expected to shift to a supply shortage state, with the memory market size potentially surging by 70%. The DRAM market is anticipated to grow even more, by 86.8%. NAND market sales are also expected to jump by 60.7%.

Semiconductor Sales Forecast for Last Year, This Year, and Next Year (Unit: Billion USD) /
[Image Courtesy of Gartner]

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Gartner expects that the PC, tablet, and smartphone markets will account for 31% ($167.6 billion) of total semiconductor sales this year. These markets are characterized by mass production, but Gartner’s analysis suggests that they are gradually reaching saturation, leading to a less optimistic long-term market outlook. It is seen as the end of a decades-long boom in large-volume, high-value content markets.

Instead, attention is focused on the automotive, industrial, military, and civil aerospace semiconductor markets. The automotive semiconductor market size is expected to grow by 13.8% from last year, reaching $76.9 billion. Gartner anticipates that a variety of smaller end markets will open up in the future, creating growth opportunities across multiple sectors.

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