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Back to growth for semiconductor industry in 2024

There will be a new wave of growth for the semiconductor industry next year after the downturn in 2023. This is explained by the exploding global demand for artificial intelligence (AI) and high-performance computing (HPC) coupled with stabilizing demand for smartphones, personal computers, infrastructure, and resilient growth in automotive, a forecast by International Data Corporation (IDC) shows. moon

“Memory manufacturers’ strict control of supply and output has led to increasing prices from the start of November, and the demand for AI across all major applications will drive the overall semiconductor sales market to recover in 2024”,  says Galen Zeng, Senior Research Manager, Semiconductor Research, IDC Asia/Pacific.

 “The semiconductor supply chain, including design, manufacturing, packaging, and testing, will bid farewell to the downturn in 2023”.

Among IDC forecasts for the semiconductor market in 2024:

The supply chain inventory depletion process continues due to weak market demand. Although there are some sporadic short orders and rush orders in the second half of 2023, it is still difficult to reverse the first half annual decline of 20%, thus, the semiconductor sales market is expected to still decline by 12% in 2023. After the memory market recession of over 40% in 2023, IDC expects the semiconductor market to return to a growth trend in 2024, with an annual growth rate above 20%.

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Although the growth of the automotive market has remained resilient, the trend of automotive intelligence and electrification is clear and an important driver for the future semiconductor market. ADAS accounts for the largest share of the automotive semiconductor market, with a compound annual growth rate (CAGR) of 19.8% by 2027, accounting for 30% of the automotive semiconductor market in that year. 

Infotainment accounts for the second largest share of the automotive semiconductor market, with a CAGR of 14.6% by 2027, accounting for 20% of the market in that year, driven by automotive intelligence and connectivity. Overall, more and more automotive electronics will rely on chips, which means the demand for semiconductors will be long-term and steady.

AI is making a big splash because data centers require higher computing power, data processing, complex large language models, and big data analytics. With the advancement of semiconductor technology, it is expected that more AI functions will be integrated into personal devices starting in 2024. AI smartphones, AI PCs, and AI wearable devices will be gradually launched into the market. 

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