IDC Forecasts Semiconductor Market to Surge 20.2% in 2024, Reaching $633 Billion

November 16, 2023

IDC's upgraded Semiconductor Market Outlook predicts a return to growth and increased revenue for the semiconductor industry in the coming years, driven by improved visibility, demand for AI devices, and technological advancements.

  • PC and smartphone market is showing signs of improvement
  • Demand for semiconductors driven by electrification is rising
  • New technologies and flagship products are expected to drive semiconductor growth

In a recent update to its Semiconductor Market Outlook, International Data Corporation (IDC) has expressed optimism for the industry’s future, predicting a return to growth and raising its revenue expectations for the coming years. The new forecast projects a revenue increase from $518.8 billion to $526.5 billion in 2023, and from $625.9 billion to $632.8 billion in 2024.

IDC’s positive outlook is based on several factors. Firstly, the market for PCs and smartphones, two of the largest segments, is showing signs of improvement as the inventory correction subsides. Additionally, the automotive and industrial sectors, which have experienced elevated inventory levels, are expected to normalize as the demand for semiconductors driven by electrification continues to rise.

The introduction of new technologies and flagship products is also expected to drive semiconductor growth. In particular, the advent of AI-powered PCs and smartphones in the coming year is anticipated to increase semiconductor content and value across various market segments. Furthermore, IDC foresees a much-needed improvement in memory average selling prices (ASPs) and DRAM bit volume.

Looking ahead, IDC predicts that wafer capacity pricing will remain stable as Foundry suppliers gradually enhance their utilization rates and demand from fabless customers picks up. Capital expenditures (CapEx) are also expected to improve in the second half of 2024 as revenue shipments align with end demand, and incentives like ChipAct stimulate investment throughout the supply chain.

While IDC acknowledges that the semiconductor industry experienced a decline of 12% in 2023, it sees this as an improvement from previous forecasts. The firm anticipates a gradual recovery in revenues throughout 2024 and beyond. Rudy Torrijos, research manager at IDC, emphasizes the improved visibility in the channel and with original equipment manufacturers (OEMs) in key market segments, leading to revenue growth aligning with end user demand.

Mario Morales, group vice president at IDC, highlights the semiconductor market’s shift from a trough to sustained growth. He notes that the industry has reached a bottom and is now growing on a quarter-over-quarter basis. Morales points to improving average selling prices in DRAM as an early positive indicator and expects suppliers to manage capacity additions and utilization rates to drive a sustainable recovery.

IDC’s Semiconductor Market Outlook is based on its Semiconductor Technology Supply Chain Intelligence (STSI) service, which collects revenue data from over 150 global semiconductor companies. The forecast covers various device areas, geographic regions, industry segments, and end-device applications.

In conclusion, IDC’s upgraded outlook for the semiconductor market reflects growing confidence in the industry’s recovery. With improved visibility, increasing demand for AI devices, and ongoing advancements in technology, the sector is poised for sustained growth in the coming years.

IDC Forecasts Semiconductor Market to Surge 20.2% in 2024, Reaching $633 Billion


Background Information

About IDC: IDC, or International Data Corporation, is a global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. Established in 1964, IDC offers valuable insights into industry trends, market forecasts, and technology adoption through its research and analysis. Their expertise aids businesses, governments, and IT professionals in making informed decisions and strategies.

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Technology Explained

Foundry: A foundry is a dedicated manufacturing facility focused on producing semiconductor components like integrated circuits (ICs) for external clients. These foundries are pivotal in the semiconductor industry, providing diverse manufacturing processes and technologies to create chips based on designs from fabless semiconductor firms or other customers. This setup empowers companies to concentrate on innovative design without needing substantial investments in manufacturing infrastructure. Some well-known foundries include TSMC (Taiwan Semiconductor Manufacturing Company), Samsung Foundry, GlobalFoundries, and UMC (United Microelectronics Corporation).

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