Global semiconductor revenue to grow 17 per cent in 2024 - Gartner

After an 11 per cent drop in revenue in 2023, Gartner analysts are predicting an uptick for semiconductors in 2024

Global semiconductor revenue is projected to grow 16.8 per cent in 2024 to total $624bn, according to the latest forecast from Gartner.

In 2023, the market is forecast to decline 10.9 per cent and reach $534bn.

IDC also predicted an uptick in semiconductor revenues for 2024, claiming it would reach $632bn in the coming year.

"We are at the end of 2023 and strong demand for chips to support AI workloads, such as GPUs, is not going to be enough to save the semiconductor industry from double-digit decline in 2023," said Alan Priestley, VP analyst at Gartner.

"Reduced demand from smartphones and PC customers coupled with weakness in datacentre/hyperscaler spending are influencing the decline in revenue this year."

However, 2024 is forecast to be a bounce-back year where revenue for all chip types will grow, driven by double-digit growth in the memory market.

Memory revenue to rebound in 2024

The worldwide memory market is forecast to record a 38.8 per cent decline in 2023 and will rebound in 2024 by growing 66.3 per cent.

Anaemic demand and declining pricing due to massive oversupply will lead NAND flash revenue to decline 38.8 per cent and fall to $35.4bn in revenue in 2023.

Over the next 3-6 months, NAND industry pricing will hit bottom, and conditions will improve for vendors.

Gartner analysts forecast a robust recovery in 2024, with revenue growing to $53bn, up 49.6 per cent year-over-year.

Due to high oversupply level and lack of demand, DRAM vendors are chasing the market price down to reduce inventory.

Through the fourth quarter of 2023, DRAM market's oversupply will continue which will trigger a pricing rebound.

However, the full effect of pricing increases will only be seen in 2024, when DRAM revenue is expected to increase 88 per cent to total $87.4bn.

AI integration

Developments in GenAI and large language models are driving demand for deployment of high-performance GPU-based servers and accelerator cards in data centres.

This is creating a need for workload accelerators to be deployed in datacentre servers to support both training and inference of AI workloads.

Gartner analysts estimate that by 2027, the integration of AI techniques into datacentre applications will result in more than 20 per cent of new servers including workload accelerators.