Press Release

Gartner predicts robust growth for semiconductor industry in 2024

Wed 6 Dec 2023

The semiconductor industry is set for a significant rebound in 2024, with worldwide revenue projected to grow by 16.8% to £495.3 billion ($624 billion), according to Gartner’s latest forecast.

This comes after a predicted downturn in 2023, where the market is expected to contract by 10.9%, reaching £423.9 billion ($534 billion).

Alan Priestley, VP Analyst at Gartner, said: “We are at the end of 2023 and strong demand for chips to support artificial intelligence workloads, such as graphics processing units (GPUs), is not going to be enough to save the semiconductor industry from double-digit decline in 2023.”

Reduced demand from smartphones and PC customers coupled with weakness in data centre and hyperscaler spending are influencing the decline in revenue this year.

Despite this, 2024 is anticipated to be a year of significant recovery for the semiconductor industry, with all chip types expected to experience growth. This resurgence is particularly evident in the memory market, which is predicted to see double-digit expansion.

The worldwide memory market, after a forecasted 38.8% decline in 2023, is set to rebound in 2024 with a 66.3% growth.

NAND flash revenue, affected by anemic demand and oversupply leading to declining prices, is expected to decrease by 38.8% to £28 billion ($35.4 billion) in 2023. However, Gartner analysts forecast a strong recovery in 2024, with revenue growing to £42 billion ($53 billion), a 49.6% year-over-year increase.

Similarly, the DRAM market, currently facing high oversupply and low demand, is expected to see a pricing rebound in 2024. Revenue for DRAM is projected to surge by 88% to £69.3 billion ($87.4 billion).

The forecast also highlights the growing importance of AI in the semiconductor industry. Developments in Generative AI and large language models are increasing the demand for high-performance GPU-based servers and accelerator cards in data centres.

Gartner analysts estimate that by 2027, more than 20% of new servers will include workload accelerators, reflecting the integration of AI techniques into data centre applications. This trend underscores the evolving needs of the semiconductor market, driven by advancements in AI technology and data processing.

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