Global chip sales to decline 10% in ’23, followed by '24 rebound

Global chip sales will decline 10.3% in 2023, but then rebound robustly by nearly 12% in 2024 to the highest total ever, according to a newly updated forecast from the World Semiconductor Trade Statistics organization. The worst hit will be the vital memory segment, which will also be the champion in the 2024 recovery.

The decline-and-rebound follows a fairly predictable cyclable pattern of recent decades for the vitgal semiconductor segment, according to many economists. However, the pandemic and supply chain shortages, followed by increased production and then excess inventory of many chips have led to an inventory correction that has been made worse by inflation and reduced demand for many electronics products, including smartphones , PCs and even servers.

The worst hit sector has been memory chips, which are now forecast to decline by 35% in 2023 compared to 2022. The expansion forecast in 2024 will be primarily driven also by memory chips, which should grow by more than 40% compared to 2023, according to the WSTS.

Global chip sales edged up slightly in April compared to March, but were down by nearly 22% when compared to April a year ago, according to the organization.   The overall reduction of 10.3% in all of 2023  will result in an estimated market size of $515 billion. WSTS said it adjusted its growth projections downward in response to increasing inflation and weakening demand in end markets, primarily by consumer buyers.  There was a 3% increase in sales in 2022.  The numbers for 2024 will be up 11.9% globally, reaching $576 billion, marking the industry’s highest total ever.

“The global semiconductor market remains in a cyclical downturn, exacerbated by sluggish macroeconomic conditions,” said John Neuffer, president and CEO of the Semiconductor Industry Association, in a statement reacting to the WSTS stats. “Month-to-month sales ticked up for the second consecutive month in April, perhaps foreshadowing a continued rebound in months ahead.”

For April, sales were down 20% in the Americas compared to a year earlier, while the decline was worse in China (31%) and Asia Pacific (24%). Only Europe saw an improvement of 2.3%. By region in all of 2023, WSTS said Europe and Japan will experience growth of 6.3% and 1.2% respectively, while the Americas will decline by 9% and Asia Pacific by 15%. In 2024, the Americas and Asia Pacific are estimated to see to double digit year over year growth.

RELATED: Apple launches Vision Pro headset to ship next year