ISES TV – ISES USA 2023 – Day 1
Navigating Through a Correction in the Semiconductor Market
- What are IDC’s expectations for revenue growth this year and 2024? Year over year growth is expected to resume by Q4’23 but the total semiconductor market is expected to decline in high single digits.
- Current State of the market: Market correction is well underway and will continue throughout this year on a revenue and unit basis. The worst of the storm for our industry is expected to be from Q3’22 to Q2’23.
Inventory correction began in 1H’22, accelerated by the second half and will continue for the next couple of quarters driving down utilization rates and revenues. - DRAM and NAND is experiencing a prolonged contraction. How are suppliers adjusting to the large inventory and bit growth decline? Will Samsung cutback like the other suppliers to balance the market?
- Our forecast scenario factors a moderate global recession that begins in Q4’22/Q1’23 (4-6 quarters). Eurozone is assumed to already be in recession and China remains weak for most of this year. Capital spending cutbacks reach 20% for the industry with higher percentage cutbacks and pushouts in memory. Logic will also reevaluate capacity expansion plans as utilization falls and projects are reevaluated.
- Long term IDC believes the market will grow at a CAGR of 5% over the next 5 to 7 years with automotive and industrial outperforming the overall industry with increasing silicon content. Technology spending as a percentage of GDP remains less than 1% but should more than triple over the next seven years. We expect 2024 and 2025 will be a strong recovery period for semiconductors but WFE likely remains down in 2024 after a strong three-year cycle.
Mario Morales
Group VP, Enabling Technologies and Semiconductors
IDC