Analysts Semiconductor Revenue to Decline by 3.6% in 2023

Semiconductors have been seeing a lot of ups and downs ever since the pandemic. The pandemic itself choked up supply lines, but matters were made even worse by manufacturing issues and political unrest in China as well as further problems that occurred in Taiwan. Such issues becoming prevalent in the two biggest semiconductor manufacturing hubs was sure to create shockwaves, and that is almost exactly how things have played out.

The revenue that companies received from semiconductors reached $595 billion in 2021, which increased by 4% to $618 billion in 2022. Previous predictions suggested that semiconductor revenues would continue to grow in 2023, ostensibly reaching $623 billion by the end of that year. In spite of the fact that this is the case, newer analysis has revealed that the growth rate will actually be in the negatives, and that could make industry recovery take much longer than might have been the case otherwise.

The newest predictions from Gartner indicate that semiconductor revenues are going to see a 3.6% decline in 2023. This will erase almost all of the progress that was made this year, with the current projection estimating around $596 billion in revenue. That is just $1 billion more than the numbers seen in 2021, and the short term outlook seems quite dire with all things having been considered and taken into account.

With all of that having been said and now out of the way, it is important to note that memory demand has been seeing a huge decline. Inventories are overflowing, customers are demanding reduced prices, and all in all demand is expected to take a 16% hit in 2023 given all these factors.

Some consumers will rejoice because of the fact that this is the sort of thing that could potentially end up making their devices cheaper in 2023. However, companies might refuse to decrease prices and instead keep them stable by opting against raising them as they normally do. We will have to see how the events of next year play out, and we might see a vastly different industry by the time 2023 draws to a close.

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by Zia Muhammad via Digital Information World