IDC upgraded its Semiconductor Market Outlook by calling a bottom and return to growth that accelerates next year thanks to better visibility as the long inventory correction subsides in two of the largest market segments: PCs and smartphones.
IDC raised its September 2023 revenue outlook from $518.8 billion to $526.5 billion in a new forecast. Revenue expectations for 2024 were also raised from $625.9 billion to $632.8 billion as IDC believes the U.S. market will remain resilient from a demand standpoint and China will begin recovering by the second half of 2024 (2H24).
IDC notes that elevated inventory levels for the automotive and industrial segments are expected to return to normal levels in 2H24 as electrification continues to drive semiconductor content over the next decade. Technology and large flagship product introductions will drive more semiconductor content and value across market segments in 2024 through 2026, including the introduction of AI PCs and AI Smartphones next year and a much-needed improvement in memory ASPs and DRAM bit volume.
“We upgraded our Market Outlook to GROWTH as the semiconductor market returns to sustained growth,” said Rudy Torrijos, research manager, Worldwide Semiconductor Supply Chain Technology Intelligence at IDC. “While inventory levels remain elevated with suppliers, visibility has clearly improved in the channel and with OEMs in key market segments. We see revenue growth matching end user demand beginning in 1H24. As a result, we expect capex to improve subsequently initiating a new investment cycle within the supply chain.”
Some additional highlights from IDC:
- Wafer capacity pricing will remain flat next year as foundry suppliers gradually improve utilization rates and demand returns from their core fabless customers.
- CapEx is expected to improve by 2H24 as revenue shipments match end demand and regional ChipAct incentives stimulate investment across the supply chain.
- Worldwide semiconductor revenue will grow to $526.5 billion in 2023, down 12.0% from $598 billion in 2022. This is up from the $519 billion IDC forecast in September. For 2024, IDC sees year-over-year growth of 20.2% to $633 billion, up from $626 billion in the prior forecast.