adplus-dvertising
Technology

Semiconductor market declined in 2023 after two years of growth

The global semiconductor industry suffered a minor revenue decline in 2023. According to market research firm Omdia, the revenue declined 9% from 2022, going down from $597.7 billion to $544.8 billion. Other research firms, including Counterpoint and Gartner, also estimated a similar drop.

Semiconductor market decline shows its cyclical nature

A few years back, the tech world was reeling from an unprecedented global semiconductor shortage. This was caused by an upswing in demand during the coronavirus pandemic when the demand for various electronics products surged. It led to two consecutive years of record growth in revenue in 2021 and 2022. However, the situation reversed in 2023, highlighting the cyclical nature of the market.

Demand softened last year, causing a drop in prices and overall revenue. The market was mostly saved by AI solutions. AI chips were a significant growth driver in 2023, and companies focused on this segment reaped its benefits. NVIDIA, which jumped onto the market early, more than doubled its semiconductor revenue last year. It generated over $49.2 billion. The company’s semiconductor revenue in 2019 was under $10.

NVIDIA’s 133.6% revenue growth last year is unmatched. The next biggest growth rate was 12.2% achieved by Infineon Technologies. All of its close competitors suffered declines in revenue. This allowed the American firm to jump from the eighth spot to the second, trailing its compatriot Intel. The latter made $51.2 billion in semiconductor revenue in 2023, down 15.8% from $60.8 billion in 2022.

Samsung, which led the chart in 2022 with a revenue of $67 billion, dropped to the third last year. It suffered a 33.8% decline in revenue to 44.4 billion. Qualcomm in the fourth spot saw a 15.8% revenue decline to $30.9 billion. Broadcom Limited, meanwhile, registered a 5.5% growth last year, helping its revenue to reach $28.4 billion. Its position on the global chart remained unchanged at the fifth spot, though.

Omdia semiconductor market revenue 2023Omdia semiconductor market revenue 2023

Sluggish demand for memory chips affected Samsung

Samsung is the world’s largest maker of memory chips. A sluggish demand for these chips affected its earnings last year. SK Hynix, which is second only to Samsung in this segment, also endured a similar fate. Its semiconductor revenue declined 30.6% to $23.7 billion. The Korean firm was saved by a high demand for high bandwidth memory (HBM) solutions that are integrated with GPUs to facilitate AI functions.

Last year’s semiconductor downturn affected most major companies (12 of the top 20 vendors suffered a revenue decline), except for those that ventured into AI solutions early. The AI trend could usher the industry to an upward growth trajectory this year. Omdia forecasts the HBM market “to record higher unit growth rates in 2024, ranging between 150-200%.” This should lead to a market recovery in the memory segment.

Global semiconductor market revenue rankings 2023Global semiconductor market revenue rankings 2023

WATCH NOW

DOWNLOAD NOW