Global semiconductor revenue is forecast to grow 7.4 percent in 2022, down from 2021 growth of 26.3 percent, according to Gartner report.

The report also said semiconductor revenue is projected to decline 2.5 percent in 2023.

Gartner forecast global semiconductor revenue to grow 7.4 percent in 2022 to $639.2 billion, down from its previous view of 13.6 percent growth, and compared with growth of 26.3 percent last year.

“We are seeing weakness in semiconductor end markets, especially those exposed to consumer spending. Rising inflation, taxes and interest rates, together with higher energy and fuel costs, are putting pressure on consumer disposable income. This is affecting spending on electronic products such as PCs and smartphones,” Richard Gordon, Practice VP at Gartner, said.

2022 global semiconductor revenue has been reduced from the previous quarter’s forecast by $36.7 billion, to $639.2 billion, as economic conditions are expected to worsen through the year. Memory demand and pricing have softened, especially in consumer-related areas like PCs and smartphones, which will help lead the slowdown in growth.

PC shipments are set to decline by 13.1 percent in 2022 after recording growth in 2020 and 2021. Semiconductor revenue from PCs is estimated to record a decline of 5.4 percent in 2022.

Semiconductor revenue from smartphones is on pace to slow to 3.1 percent growth in 2022, compared to 24.5 percent growth in 2021. Mobile phone shipments in 2022 are now expected to fall to 1.46 billion units from 1.57 billion.

Semiconductor revenue from the data center market will remain resilient for longer with 20 percent growth in 2022 due to cloud infrastructure investment.

Semiconductor revenue from the automotive electronics segment will record double-digit growth over the next three years as semiconductor content per vehicle will increase due to the transition to electric and autonomous vehicles. The semiconductor content per vehicle is projected to increase from $712 in 2022 to $931 in 2025, Gartner report said.

Supply constraints are still there in some sectors, such as in 5G equipment, but that the market should be in better shape in the first half of next year, Gordon said.