Inflation and Shrinking Demand: Semiconductor Industry Slumps in 2023 to 2021 Levels

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Other market researchers are adjusting their forecast for the semiconductor market in 2023: downwards. A correction is also being made for the current year, because the high growth hoped for at the end of July is not expected to materialize and the old forecast will be clearly missed.

Forecasts corrected significantly downwards

In July of this year, Gartner had forecast sales of more than 639 billion US dollars for the semiconductor industry for 2022, which would have marked growth of 7.4 percent. At that time, however, the consequences of inflation and a slowdown in the market were already being seen, resulting in a 2.5 percent downturn in 2023 to $623 billion in sales. However, today's new forecasts show that not only will this number not be reached, but the slowdown is likely to be greater in 2023.

The new figures call for sales of 618 billion US dollars for this year, after 595 billion US dollars in 2021. In the coming year, this year's growth should de facto evaporate again, as a decline to 596 billion US dollars is expected.

Sales forecast for the Semiconductor industry (Image: Gartner)

The market is currently a little caught between the sharp drop in demand in the private segment and continued high investments in the professional environment. However, there are a number of factors that make forecasts difficult. This is because many planned purchases are based on orders from far in the past, which is why a decline could also occur here. In general, however, the market is considered to be much more stable.

The storage market is pulling down

For the coming year, the market researchers expect, among other things, significant slumps in DRAM and NAND. The big manufacturers like Micron and SK Hynix have already recognized this and adjusted their production and expenditure. Gartner expects DRAM sales to drop by 18 percent and NAND by almost 14 percent. DRAM is said to be affected by massive overproduction until at least the third quarter of 2023, but things are not expected to look rosy for NAND in the first half of 2023 either.