Worldwide semiconductor revenues are expected to decline by nearly 1% in 2020 because of the impact of coronavirus on demand, research firm Gartner said on Thursday.
The 0.9% decline means that revenues for 2020 will reach $415.4 billion, less than the $419 billion reached in 2019. Revenues in 2019 were down by 12% from 2018.
“The wide spread of COVID-19 across the world and the resulting strong actions by governments to contain the spread will have a far more severe impact on demand than initially predicted,” said Gartner vice president Richard Gordon.
Revenues from growth in memory will be a bright spot, with a forecast of $124.7 billion in 2020, an increase of nearly 14% over 2019. Memory will make up 30% of the semi market, while nonmemory will be the remainder, on pace to to reach $290 billion, a drop of 6% year over year.
Gartner in early 2020 had said overall semi revenues for the year would be up by 12.5% before the pandemic crisis hit, reaching $270 billion for the year.
With the non-memory decline, there will be a reduction in smartphone, auto and consumer electronics production, Gordon said, while hyperscale data center and communications infrastructure sectors will be more resilient
In the memory category, NAND flash revenue will grow 40% in 2020 due to severe shortages from 2019, which keeps pricing at stable levels, Gartner said. NAND flash supply will remain historically low in 2020 due to fab delays and tech transitions, Gordon predicted. NAND flash prices will increase nearly 16% during the first half of 2020 and then reverse to a 9.4% decline in the second half. However, the average price will still enable NAND flash revenue to grow.
Strong demand from cloud service providers in the first half of 2020 will push server DRAM prices and revenue higher, Gartner said. However, this growth will be offset by weak demand and falling prices from the smartphone market. Overall DRAM revenue will decline 2.4% in 2020.
Other analysts have forecast a decline for semiconductor revenues. IDC had a more serious forecast in mid-March with a 6% decline and a loss of $26 billion globally.