Introduction:
The semiconductor industry, a crucial driver of technological innovation, is poised for significant upcycle in the coming years.
According to the latest forecast by Semiconductor Intelligence, a respected market research and survey unit, the global semiconductor industry is expected to grow by 3% in the fourth quarter of 2023, contributing to a robust annual growth rate of 6%.
This momentum is anticipated to continue, with the forecast indicating the possibility of double-digit annual growth throughout 2024, laying a strong foundation for the industry.
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Nvidia leads the industry in the Semiconductor Industry upcycle
A key highlight of the report is the analysis of the top fifteen IC companies, revealing varied growth rates in the third quarter of 2023 compared to the second quarter. Companies such as Nvidia, Samsung, SK Hynix, and MediaTek reported double-digit revenue increases, with Huida surpassing Intel to become the world’s largest semiconductor company.
However, the outlook for the fourth quarter of 2023 is mixed among the top players. While five companies project revenue growth, driven by the recovery of the PC and smartphone markets, the other five anticipate declines, primarily attributed to challenges in the automotive sector.
Read More: Semiconductor Industry Recovery Delayed Again to 2025, ASML Warns
Automotive Industry Challenges in Semiconductor Industry upcycle
Notably, companies closely linked to the automotive industry, including TI, Infineon, STMicroelectronics, NXP, and Renesas Electronics, face revenue decline expectations. Surprisingly, these companies performed better than memory-focused ones and those reliant on PCs and smartphones throughout 2023.
The report identifies factors such as industrial weakness, issues in the communications infrastructure unit, and inventory adjustments as reasons for the expected decline. The report also notes the impact of the United Auto Workers (UAW) strike on major U.S. automakers, causing a 10% drop in auto and component production in October 2023.
Read More: 4 Reasons why There a Recession in Semiconductor Industry
Memory Companies and Future Growth in Semiconductor Industry upcycle
Semiconductor Intelligence predicts that in 2024, memory companies, PC and computing-focused companies, and smartphone-focused companies will experience the strongest growth.
Conversely, companies with a primary focus on automotive, industrial, and IoT sectors are expected to witness relatively slower revenue growth.
2024 and Beyond: Factors Shaping the Future:
The report concludes with a forward-looking perspective, forecasting an overall market growth of 16% in 2024.
Semiconductor Intelligence foresees robust growth in 2024, with the most substantial gains expected in sales for memory companies (Samsung, SK Hynix, and Micron), PC and computing-focused enterprises (including Nvidia, Intel, and AMD), and smartphone-focused entities (such as Qualcomm and MediaTek). Conversely, companies concentrating on automotive, industrial, and IoT sectors (TI, Infineon, STMicroelectronics, NXP, and Analog Devices) are anticipated to experience comparatively slower revenue expansion.
Looking ahead to the trends shaping the semiconductor industry beyond 2024, Semiconductor Intelligence asserts a clear trajectory. The overall market is projected to achieve a noteworthy 16% growth. The realization of this ambitious target hinges significantly on the extent of increases in memory prices.
However, achieving this ambitious target hinges on the extent of memory price increases. Despite the positive forecast, industry players are cautious. This caution is attributed to the ongoing global economic recovery from the pandemic. Additionally, heightened political tensions and geopolitical rivalries contribute to the prevailing sense of caution.
Read More: Semiconductor Industry Revenue Increases First time Since 2021, Led by Nvidia
Conclusion:
The semiconductor industry is on a steady path to recovery, supported by positive growth indicators. While challenges persist, the overall outlook for 2024 and beyond appears promising. The sector’s resilience is evident despite the uncertainties posed by the global economy, geopolitical tensions, and ongoing conflicts.
