Global semiconductor market to dip 3.6% in 2023

From shortage to oversupply — how the semiconductor market has turned. Gartner expects global semiconductor market to shed 3.6 percent in 2023.

In 2022, the market is on pace to grow four percent to reach US$618 billion.

“The short-term outlook for semiconductor revenue has worsened. Rapid deterioration in the global economy and weakening consumer demand will negatively impact the semiconductor market in 2023,” said Richard Gordon, Practice Vice President of Gartner.

Global semiconductor revenue is forecast to drop to US$596 billion in 2023, down from an earlier estimate of US$623 billion.

Currently, the semiconductor market is polarised between the consumer-driven markets and enterprise-driven markets. Weakness in the consumer-driven markets is being driven largely by the decline in disposable income caused by rising inflation and interest rates, but also by the reprioritisation of consumer discretionary spending to other areas such as travel, leisure and entertainment, which are having a negative knock-on effect on technology purchases.

However, the enterprise-driven markets, such as enterprise networking, enterprise compute, industrial, medical and commercial transportation, have so far been relatively resilient despite looming macro-economic slowdown and geopolitical concerns.

“The relative strength in the enterprise-driven markets comes from strategic investments by corporations that are looking to strengthen their infrastructure to continue supporting their work from home workforce, business expansion plans and ongoing digitalisation strategies,” said Gordon.

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