Processors

Semiconductor sales to fall 5% in 2023

30 November 2022

After years of setting records for sales during a time when the supply chain was hindered by a chip shortage, semiconductor sales are forecast to decline by 5% next year, according to new data from IC Insights.

After two years of record semiconductor sales — rising 25% to $614.7 billion in 2021 and increasing 3% in 2022 to $636.0 billion — adverse conditions are expected to persist into the first half of 2023 causing a decline.

These adverse conditions include:

  • A global economic recession
  • Soft demand for new enterprise, PCs and smartphones
  • Elevated chip inventory levels
  • Weakness in the memory IC market

IC Insights forecasts that total semiconductor sales will be reduced by 5% in 2023 while total IC sales are forecast to decline 6% while combined sales of object-based storage devices (OSD) are forecast to edge slightly higher.

Second half struggles

In 2022, the four major semiconductor product categories will post solid double-digit sales. However, due to second half struggles in the economy and soft demand, the memory market, which is typically highly cyclical, will post a big decline of 17%, which will weigh down the overall IC and chip market growth.

Meanwhile, the microcomponents and optoelectronics segments are expected to grow by single-digit amounts.

Rebound coming

Luckily, after a down year in 2023, semiconductor sales will rebound with three years of much stronger growth. By the end of the forecast period in 2026, sales for chips will climb to $843.6 billion, representing a compound annual growth rate (CAGR) of 6.5%.

Following the cyclical down year in 2023, IC Insights forecasts semiconductor sales will rebound with three years of much stronger growth. By the end of the forecast period in 2026, semiconductor sales are forecast to climb to $843.6 billion, representing a CAGR of 6.5%.

To contact the author of this article, email PBrown@globalspec.com


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