According to latest forecast by Gartner, Inc., global semiconductor revenue is projected to grow 7.4 per cent in 2022, down from 2021 growth of 26.3 per cent and fall 2.5 per cent next year, owing to the weak sales of mobile phones and personal computers (PCs).

Commenting on the study, Richard Gordon, Practice VP, Gartner, said, “Although chip shortages are abating, the global semiconductor market is entering a period of weakness, which will persist through 2023 when semiconductor revenue is projected to decline 2.5 per cent. We are already 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.”

The study further noted that the overall 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.

Additionally Gordon said, “The semiconductor market is entering an industry down cycle, which is not new, and has happened many times before. While the consumer space will slow down, semiconductor revenue from the data center market will remain resilient for longer (20 per cent growth in 2022) due to continued cloud infrastructure investment. In addition, the automotive electronics segment will continue to 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.”