The market is on pace to grow 4% and total US$618 billion this year, but that revenue will lower to US$596 billion in 2023.
Currently, the semiconductor market is polarised between the consumer-driven markets and enterprise-driven markets.
Weakness in the consumer-driven markets is being driven largely by the decline in disposable income caused by rising inflation and interest rates, but also by the reprioritisation of consumer discretionary spending to other areas such as travel, leisure and entertainment.
“The short-term outlook for semiconductor revenue has worsened,” said Richard Gordon, Practice Vice President at Gartner. “Rapid deterioration in the global economy and weakening consumer demand will negatively impact the semiconductor market in 2023.”
“While the deterioration in the macroeconomic environment will weaken consumer demand, we expect relatively better semiconductor consumption from business investments.
“Consequently, markets such as industrial, telecom infrastructure and data centre will be less impacted by consumer sentiment and spending in the short term.”
For the remainder of the year, the memory market is witnessing faltering demand, according to the research.
As a result, the market will remain flat in 2022 and is forecast to decline 16.2% in revenue in 2023.
The worsening outlook is negatively impacting smartphone, PC and consumer electronics production, which is positioning the DRAM market for oversupply for the remainder of 2022 and the first three quarters of 2023.
