In recent months, many semiconductor companies have released lower-than-expected performance. Recently, many institutions have lowered their expectations for the semiconductor market in 2023. The fiery global semiconductor industry will shrink for the first time in four years.
For the semiconductor market in 2022, some market research companies predicted an increase of 11% to 4% at the beginning of the year, with an average increase of 8%, which was revised up to an average increase of 12% in April.
But since then, affected by factors such as rising prices caused by global inflation, geopolitical conflicts, and the new crown epidemic, the demand for consumer devices such as smartphones and personal computers has dropped sharply, and prices have fallen, so it has been revised down to an average growth rate of 3-6% in autumn. 4%.
The semiconductor market in 2320 was expected to grow by an average of 2% in early 2022, but was revised down to an average decline of 7% in the fall of 2022.
This will be the first year-on-year negative growth in the semiconductor market since 2019. The economic slowdown in the second half of 2022 has not yet come to an end. It is expected that the demand for semiconductors will remain sluggish in the first half of 2023. Recovery, such as the electrification and performance enhancement of vehicles and investment in renewable energy. However, many uncertain factors persist, making it difficult to predict the actual situation of the market.
The World Semiconductor Trade Statistics Association (WSTS) predicts that the size of the semiconductor market in 2023 will change from a previously estimated year-on-year increase of 4.6% to a year-on-year decrease of 4.1% to US$556.5 billion. This will be the first time the industry has shrunk since 2019. Gartner predicts that semiconductor industry revenue will decline 3.6% in 2023, from $618 billion in 2022 to $596 billion, down from an earlier forecast of $623 billion. IC Insights believes that global semiconductor demand will experience a cyclical decline in 2023, and total annual sales are expected to decrease by 5%.
The market for semiconductor manufacturing equipment may also shrink. SEMI said that the global semiconductor equipment market sales will reach 108.5 billion in 2022, but the market size will shrink to 91.2 billion US dollars in 2023, and will not resume growth until 2024. Among them, the fab equipment market will decrease by 17% to US$78.84 billion, the packaging equipment market will decrease by 13% to US$5.29 billion, and the test equipment market will decrease by 7% to US$7.07 billion.
In the front-end equipment, the logic process equipment market will decrease by 9% compared with 2022, the DRAM equipment market will drop by 25%, and the NAND Flash equipment market will also decline by 36%.
Memory Chip influences the market
According to industry analysts, the recent decline in the semiconductor market is mainly due to the weakening of the Memory market. Growth expectations are lowered as inflation rises and end-market demand decreases, especially those in semiconductors that are affected by sales spending.
According to WSTS estimates, some major semiconductor categories will still achieve double-digit year-on-year growth, of which the analog category will increase by 20.8%, the sensor category will increase by 16.3%, and the logic category will increase by 14.5%. But the storage category is expected to be negative, down 12.6% year-over-year.
The decline in 2023 is mainly affected by the price fluctuations of Memoey chips. Western Digital’s financial report shows a 96% decline in net profit, Samsung Electronics’ semiconductor division’s operating profit drops by 49%, and Intel’s operating income from July to September 2022 will decrease compared with the same period last year. 20%.
A variety of factors have caused the decline of the global semiconductor industry. On the whole, the imbalance between supply and demand is the most fundamental reason, and the slowdown in demand for personal consumer electronics continues to impact the semiconductor industry. IDC data shows that the global smartphone market is still facing a severe situation, and shipments are expected to decline by 9.1% year-on-year in 2022. Counterpoint predicts that the performance of the mobile phone market will continue to be sluggish in the first half of 2023. According to Strategy Analytics, global smartphone shipments will hit the lowest level since 2014.
Another important reason is overcapacity. At present, many manufacturers have begun to curb production and reduce excessive inventory. Micron announced that the overall reduction of memory chips by 20%, and Kioxia announced that the production of NAND memory chips will be reduced by 30%. It will take some time to reduce excess inventory, and semiconductor prices may continue to decline.
However, the development of the semiconductor industry is not completely pessimistic. According to WSTS data, the scale growth rate of analog chips, sensors and logic chips can still maintain a double-digit half-point ratio. SEMI sees the market downturn as short-term and expects semiconductors to recover in 2024. In this process, whoever can integrate resources to a greater extent and open up cooperation will be able to seize more opportunities.
