Semiconductor Market: Rebound Expected in 2024, But Challenges Lie Ahead

By Ahmed Ben Slimane, Strategic Semiconductors
EETimes Europe (January 9, 2024)

The semiconductor market faced a slowdown in 2023, with a projected 9% decline compared with 2022. The memory market is particularly hard-hit, with a 37% drop, while the logic, analog and discrete markets have remained relatively flat.

Despite the challenging market conditions in 2023, a 9% to 12% recovery is expected in 2024, driven by strong demand for high-performance computing (HPC) and a soft inventory reduction in wireless communication and smartphones.

Here are some key trends for 2024:

• The server market is expected to see an upside trend, driven by artificial-intelligence business. A channel inventory reduction is ongoing.
• The telecom market is showing signs of a slowdown, with 5G rollout continuing only in parts of the world. Ericsson and Nokia are expected to continue to compete fiercely for market share against Huawei.
• Global consumer confidence remains low, despite a slight improvement in the middle of 2023. This could dampen demand for consumer electronics, but a weak recovery is expected.
• There are some initial signs of weakness in the industrial and automotive markets.
• Chip-on-Wafer-on-Substrate (CoWoS) is seeing a shortage, with a slight expansion in 2024. The high demand for advanced packaging boosted by AI applications will drive the market to find other solutions in the short term.
• The memory market will see significant growth driven by consumer and data center demand and price corrections.

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