Global semiconductor revenue nose-dives

Global semiconductor revenue nose-dives

According to the latest forecast from research firm Gartner, the global semiconductor revenue is projected to grow 7.4% in 2022, a sharp decline from 2021 growth of 26.3%. This is down from the previous quarter’s forecast of 13.6% growth in 2022.  

Richard Gordon, Practice VP at Gartner said, “Although chip shortages are abating, the global semiconductor market is entering a period of weakness, which will persist through 2023 when semiconductor revenue is projected to decline 2.5%.”

 “We are already seeing weakness in semiconductor end markets, especially those exposed to consumer spending. Rising inflation, taxes and interest rates, together with higher energy and fuel costs, are putting pressure on consumer disposable income. This is affecting spending on electronic products such as PCs and smartphones,” added Gordon.  

Overall, Gartner says the 2022 global chip revenue has been reduced from the previous quarter’s forecast by $36.7 billion, to $639.2 billion, as economic conditions are expected to worsen through the year.

Memory demand and pricing have softened, especially in consumer-related areas like PCs and smartphones, which will help lead the slowdown in growth, the research firm explained.  

PC shipments are set to decline by 13.1% in 2022 after recording growth in 2020 and 2021. Semiconductor revenue from PCs is estimated to record a decline of 5.4% in 2022.

Semiconductor revenue from smartphones is on pace to slow to 3.1% growth in 2022, compared to 24.5% growth in 2021, added Gartner.

From an enterprise perspective, inventories are recovering rapidly, lead times are beginning to shorten, and prices are starting to weaken. 

The automotive electronics segment will continue to record double-digit growth over the next three years as semiconductor content per vehicle will increase due to the transition to electric and autonomous vehicles. The semiconductor content per vehicle is projected to increase from $712 in 2022 to $931 in 2025,” concludes Gordon.