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Gartner predicts a roller coaster ride of decline and rebound in semiconductor market

Gartner predicts a roller coaster ride of decline and rebound in semiconductor market

Research and consulting firm Gartner found that global semiconductor revenue is set to experience a 16.8% increase in 2024, reaching a total of $624 billion. In the company’s recent study, Gartner reveals the market may decline 10.9% in 2023, resulting in a total revenue of $534 billion.

Alan Priestley, a VP analyst at Gartner, forecasts that the semiconductor industry may experience a decline in 2023 despite the high demand for chips to support AI workloads like GPUs. The decrease in revenue may be influenced by reduced demand from smartphone and PC customers, as well as weakness in data center and hyperscaler spending.

That said, the firm notes that 2024 is projected to be a rebound year for chip revenue, with all chip types expected to grow. The memory market, in particular, is anticipated to experience double-digit growth.

Specifically, Gartner states that the global memory market may experience a decline of 38.8% in 2023, followed by a rebound of 66.3% growth in 2024.

Gartner further notes that the combination of low demand and oversupply may result in a decline in NAND flash revenue, decreasing by 38.8% to $35.4 billion in 2023. However, according to Gartner analysts, there is optimism for a recovery in 2024, with revenue projected to reach $53 billion, reflecting a year-over-year increase of 49.6%.

Due to low demand, DRAM vendors are lowering market prices to reduce inventory. Gartner says this oversupply in the DRAM market may persist throughout the fourth quarter of 2023. Price increases in the DRAM market may significantly impact, with an anticipated 88% revenue increase by 2024, reaching $87.4 billion.

The increasing popularity of generative AI and large language models drives the demand for high-performance GPU-based servers and accelerator cards in data centers. Workload accelerators are deployed to support the training and inference of AI workloads in data center servers.

Gartner predicts that by 2027, more than 20% of new servers will include workload accelerators, reflecting the integration of AI into data center applications.

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