Semiconductor Market Set to Boom in 2024: IDC Forecasts

According to IDC’s latest projections, the semiconductor revenue forecast for 2023 has been adjusted from $518.8 billion to $526.5 billion, reflecting a more positive trajectory.
BE SemiconductorSimilarly, the revenue outlook for 2024 for semiconductor business has been revised upward from $625.9 billion to $632.8 billion, underpinned by IDC’s belief in the sustained strength of the U.S. market and an anticipated rebound in China by the latter half of 2024.

The upgraded outlook hinges on several key factors outlined by IDC:

Market Segment Recovery: IDC anticipates a rebound in two significant market segments, PCs and smartphones, as the prolonged inventory correction phase wanes.

Electrification’s Influence: Automotive and industrial sectors, facing elevated inventory levels, are projected to normalize in 2H24 due to the continued drive toward electrification, which is expected to boost semiconductor content over the next decade.

Technological Advancements: IDC foresees a surge in semiconductor demand driven by new technology and flagship product introductions, particularly AI-enabled PCs and smartphones in the upcoming year. An improvement in memory ASPs (Average Selling Prices) and DRAM bit volume is also anticipated, adding further value across market segments from 2024 to 2026.

Foundry and CapEx Improvement: The pricing of wafer capacity is expected to remain stable as foundry suppliers enhance utilization rates, and demand rebounds from their core customers. Additionally, CapEx is poised to improve by the latter half of 2024, stimulated by end demand aligning with revenue shipments and regional incentives boosting investment in the supply chain.

IDC’s adjusted projections paint a picture of resilience and recovery in the semiconductor market. With a forecasted decline of 12 percent in 2023, marking a noteworthy improvement from previous estimates, IDC anticipates a gradual recovery that will gain momentum in 2024.

Rudy Torrijos, Research Manager at IDC, expressed confidence in the market’s trajectory, stating, “We upgraded our Market Outlook to GROWTH as the semiconductor market returns to sustained growth. Visibility has improved significantly, and we anticipate revenue growth to align with end user demand, initiating a new investment cycle within the supply chain.”

Mario Morales, Group Vice President at IDC, echoed this sentiment, highlighting the positive indicators like improving ASPs in DRAM and suppliers’ controlled capacity additions. He emphasized the accelerated demand for AI servers and endpoint devices as key drivers propelling semiconductor content, foreseeing AI silicon accounting for a substantial $200 billion in semiconductor revenues by the forecast’s end.