Gartner predicts that global semiconductor revenue will decrease by 11
Time:2023-04-30
Views:946
Source: Semiconductor Industry Observation
According to Gartner, Inc.‘s latest forecast, global semiconductor revenue is expected to decline by 11.2% in 2023. By 2022, the total market value will reach 599.6 billion US dollars, a marginal increase of 0.2% compared to 2021.
The short-term outlook for the semiconductor market has further deteriorated. It is expected that the total global semiconductor revenue will reach 532 billion US dollars in 2023 (see Table 1).
As the economic headwind continues, the weak demand for electronic products in the end market is spreading from consumers to businesses, creating an uncertain investment environment. In addition, oversupply of chips has led to an increase in inventory and a decrease in chip prices, accelerating the decline in the semiconductor market this year, "said Richard Gordon, Vice President of Practice at Gartner.
Memory revenue will decrease by 35.5% in 2023
The storage industry is coping with overcapacity and excess inventory, which will continue to put significant pressure on average selling price (ASP) in 2023. The expected total amount of the storage market is 92.3 billion US dollars, with a decrease of 35.5% by 2023. However, it is expected to rebound at a 70% growth rate in 2024.
Despite the flat bit production of DRAM suppliers, the DRAM market will experience severe oversupply for most of 2023 due to weak demand for terminal equipment and high inventory levels. Gartner analysts expect DRAM revenue to decline by 39.4% to $47.6 billion in 2023. The market will shift towards undersupply in 2024, with DRAM revenue increasing by 86.8% as prices rebound.
In the next six months, Gartner expects the dynamics of the NAND market to be similar to those of the DRAM market. Weak demand and a large amount of supplier inventory will cause oversupply, leading to a significant drop in prices. Therefore, NAND revenue is expected to decline by 32.9% to $38.9 billion by 2023. By 2024, due to severe supply shortages, NAND revenue is expected to increase by 60.7%.
Gordon said, "In the next decade, the semiconductor industry will face many long-term challenges." The driving forces of the high-capacity, high-value content market of the past few decades are coming to an end, especially in the personal computer, tablet, and smartphone markets that lack technological innovation
In addition, COVID-19 and trade tensions between China and the United States have accelerated the trend of de globalization and the rise of technological nationalism. Today‘s semiconductors are considered a national security issue, "Gordon said. Governments around the world are scrambling to establish self-sufficiency in semiconductor and electronic supply chains. This is leading global incentives for onshore outsourcing programs
Fragmentation of semiconductor demand
The semiconductor market for personal computers, tablets, and smartphones has stagnated. By 2023, the merged market will account for 31% of semiconductor revenue, totaling $167.6 billion. These large capacity markets have become saturated and become alternative markets lacking compelling technological innovation, "Gordon said.
At the same time, the automotive and industrial, military/civil aerospace semiconductor markets will all achieve growth. The automotive semiconductor market is expected to grow by 13.8%, reaching $76.9 billion by 2023.
In the future, there will be more but smaller end markets. The end market will be more dispersed, and the growth points will come from many different fields, such as automobile, industry, Internet of Things and military/aerospace.
The demand in the end market is less affected by consumer discretionary spending, but more affected by corporate capital expenditure. The supply chain will be more complex, involving more intermediaries and different market channels. In order to meet different end market demands, different types of capabilities will be required, "Gordon said.
Semiconductor recovery not as expected
Following the revision of TSMC‘s outlook for the semiconductor industry throughout the year, Wang Shi, the joint general manager of Liandian, also revised the outlook for the semiconductor industry proposed earlier yesterday. It is estimated that the overall semiconductor industry outlook (excluding memory) will decline by a low single digit (1-3%) from the original estimate and be revised down to about a mid recession single digit (4-6%); The wafer foundry industry has experienced a median annual decline (4-6%) and has also experienced a decline to a high single digit decline (7-9%).
Wang Shi emphasized that he had originally hoped for a recovery in the second half of the year, but so far, there are no signs of a strong recovery, and the pace of industrial inventory reduction is slower than expected. Wang Shi candidly stated that the industrial recovery is slower than originally expected, and the overall demand outlook for this quarter remains sluggish. It is expected that customers will continue to make inventory adjustments, making this "a challenging year".
Wang Shi does not shy away from saying that the industrial recovery is slower than originally expected. This quarter, including consumer electronics, computers, communication, and automotive applications, is expected to remain stable. However, there are no signs of a strong recovery in demand in the coming months. Fortunately, automotive and industrial orders remain high-end.
The market is paying attention to the quotation trend of mature wafer foundry processes and the subsequent pricing strategy of Liandian. Wang Shi emphasized that when facing challenges, Liandian not only focuses on price, but also provides customer technical and production capacity support. The average unit price of products this season will remain stable.
Throughout the year, Wang Shi candidly stated that this year is a challenging year. With the market recovery slower than expected, Liandian has lowered its global semiconductor and wafer foundry industry revenue forecast for this year. It is expected that the semiconductor industry revenue will decrease by 4% to 6% annually, a decrease higher than the original estimate of 1% to 3%; The annual revenue of wafer foundry industry will decrease by 7% to 9%, which is larger than the original estimate of 4% to 6%.
Wang Shi emphasized that even with weak demand in the main end markets, Liandian‘s automotive and industrial products continue to grow, especially with a 17% revenue contribution in the first quarter of the automotive business. Driven by automotive electronics and autonomous driving, the automotive IC content continues to increase. Automotive products will be an important source of revenue and growth initiative for the company in the future. Liandian will also strengthen long-term cooperation with key automotive customers.
Even if the market situation does not develop as expected, Liandian still evaluates the opportunity for its operations to bottom out in the first quarter. In the second quarter, consumer, communication, and automotive demand is expected to remain stable, as well as OLED driven ICs, digital televisions, and WiFi. The situation of 22nm and 28nm processes should improve in the next few months. Although there are still no signs of strong recovery, it is confident that production capacity utilization rate is expected to increase quarter by quarter driven by the above applications, striving to reach around 80%.
Looking ahead, Liandian emphasizes that it will continue to focus on differentiated solutions across logical and special process platforms, such as eHV, RFSOI, and BCD, to enhance future business growth and expand its influence in the semiconductor industry.
On the other hand, with the opening of new production capacity in the Nanke Fab 12A factory area, the wafer production capacity of Liandian in the second quarter is estimated to reach 2.63 million 8-inch equivalent wafers, with a quarterly increase of 4.12% and an annual increase of 3.88%.
When it comes to whether geopolitical governance affects customer evaluation of supply chain stability, Liandian explained that the company has production bases in mainland China, Taiwan, Singapore, and Japan, and has the advantage of diversified and dispersed production capacity. There are also more options to cooperate with customers.
Will automotive semiconductors also collapse?
After TSMC announced in France that it would release a message that the outlook was not as expected, Morgan Stanley Securities pointed out in its latest report that there is a significant increase in the downside risk of automotive semiconductors, especially weak demand for automotive MOSFETs, loss of pricing power for automotive power management IC factories, and bearish views on related Taiwanese factories such as Silicon Power and Hybrids, giving them "inferior to the market" and "neutral" ratings respectively.
The outlook for the automotive industry is turbulent, and related technology industry players have recently released expectations of weak demand. For example, in the production of automotive microcontrollers (MCUs), TSMC, which focuses on the 65 nanometer process, recently admitted in a press conference that although the demand for automotive semiconductors is currently stable, it will weaken in the second half of the year.
Li Jidian also stated that the demand for automotive MOSFETs and insulated gate bipolar transistors (IGBTs) is declining. 56% of the revenue contribution comes from automotive related products (mainly MOSFETs), and Hejing said that global integrated component manufacturers (IDM) customers‘ demand in the second half of this year will be the same as in the first half, indicating a relatively limited recovery in the second half of the year.
After conducting an industry survey, Da Mo pointed out that the supply of automotive MOSFETs is no longer tight, and what‘s worse is that demand is still turning weak. Hejing also believes that some businesses are facing headwinds and the recovery efforts in the second half of the year are limited; On the other hand, manufacturers of automotive power management ICs and analog ICs continue to face downward pressure on prices.
Fortunately, not all automotive sub industries are trending towards a pessimistic outlook. Da Mo learned from the supply chain that power solution suppliers believe that automakers are still signing a Memorandum of Understanding (MOU) with IGBT suppliers for 2024, as the IGBT demand for inverters remains stable, and some customers even demand a 30% to 50% increase in IGBT supply in 2024 compared to the current level.
In addition to the high demand for automotive IGBT, automotive MCU is also a part of the tight supply and demand. Currently, there has been no decline in the usage and price of automotive MCU.
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