Global semiconductor revenue is forecast to drop 3.6 percent in 2023 to $596 billion against 4 percent rise expected in 2022, according to Gartner.

In 2022, the semiconductor revenue will grow 4 percent to $618 billion, the report said.

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 reprioritization of consumer discretionary spending to other areas such as travel, leisure and entertainment, which are having a negative knock-on effect on technology purchases.

The enterprise-driven markets, such as enterprise networking, enterprise compute, industrial, medical and commercial transportation, have, so far, been relatively resilient despite looming macro-economic slowdown and geopolitical concerns.

For the remainder of 2022, the memory market is witnessing faltering demand, swollen inventories and customers pressing for considerably lower prices. As a result, the memory market will remain flat in 2022 and is forecast to decline 16.2 percent in revenue in 2023.

The economic 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. DRAM revenue will decrease 2.6 percent to $90.5 billion in 2022 and will further decline 18 percent in 2023 to $74.2 billion.

The NAND fab outage, which occurred in the first quarter of 2022, increased prices and masked the rapidly deteriorating demand environment, resulting in excess inventory in the third quarter of 2022 which is expected to carry into the first half of 2023. NAND revenue is projected to increase 4.4 percent to $68.8 billion in 2022, but it is on pace to decline 13.7 percent in 2023 to $59.4 billion.