Explosive Growth Forecasted: Global Semiconductor Sales to Surge 20% in 2024

The Projected Growth of Global Semiconductor Sales in 2024: IDC

Technology research and advisory firm IDC has recently readjusted its semiconductor market outlook, predicting a significant year-over-year growth of 20.2% in global semiconductor sales in 2024. This projection is based on several factors that are expected to contribute to the expansion of the semiconductor market.

Increasing Demand from the US

One of the key drivers behind the projected growth in global semiconductor sales is the growing demand from the United States. IDC believes that the resilience of the US market, coupled with the increasing demand from AI server and end point device manufacturers, will play a significant role in boosting semiconductor sales in 2024.

Recovery from Inventory Imbalances

The semiconductor market has been grappling with elevated inventory levels of PCs and smartphones, which have been affecting sales. However, IDC anticipates that these imbalances will return to normal in the second half of 2024. This recovery is expected to be driven by the continued electrification of manufacturing equipment, which will increase the semiconductor content in these devices over the next decade.

Introduction of AI-Enabled Devices

Another factor contributing to the projected growth in semiconductor sales is the introduction of AI-enabled PCs and smartphones in the coming year. These devices, along with improvements in the average selling prices of memory and DRAM bit volume, are expected to drive a growing need for semiconductors between 2024 and 2026.

Improvement in Capital Expenditure

While wafer capacity pricing is expected to remain flat in the next year, IDC predicts that capital expenditure will improve by the second half of 2024. This improvement is anticipated as revenue shipments match end demand and regional US CHIPS ACT incentives fuel investment across the semiconductor supply chain.

Interest in Government Semiconductor Subsidy Funding

Following the one-year anniversary of the US CHIPS Act, which was signed by President Biden, more than 460 companies have expressed interest in winning government semiconductor subsidy funding. This indicates a strong commitment to the semiconductor industry and further supports the projected growth in global semiconductor sales.

Positive Indicators for Recovery

Mario Morales, the group vice president of semiconductors and enabling technologies at IDC, stated that the semiconductor market has reached a bottom and has already begun to grow on a quarter-over-quarter basis. The improving average selling prices in DRAM serve as a positive early indicator of recovery. IDC expects that suppliers will continue to control capacity additions and utilization rates to drive a sustainable recovery in the semiconductor market.

Overall, the projected growth of global semiconductor sales in 2024 is attributed to increasing demand from the US, recovery from inventory imbalances, the introduction of AI-enabled devices, improvement in capital expenditure, and the interest in government semiconductor subsidy funding. These factors collectively indicate a positive outlook for the semiconductor market in the coming years.

The Effect: Projected Growth in Global Semiconductor Sales

The projected growth of global semiconductor sales in 2024, as predicted by IDC, is expected to have significant implications for various stakeholders in the semiconductor industry and beyond.

Positive Economic Impact

The anticipated 20.2% year-over-year growth in global semiconductor sales is likely to have a positive economic impact. This growth will lead to increased revenue for semiconductor manufacturers, contributing to the overall growth of the industry. It will also create opportunities for job creation and investment in research and development, driving innovation and technological advancements.

Boost in AI Adoption

The increasing demand for AI server and AI-enabled end point devices, which is expected to fuel the growth in semiconductor sales, will likely lead to a significant boost in AI adoption across various industries. With the availability of more advanced and powerful semiconductors, businesses will be able to leverage AI technologies to enhance their operations, improve efficiency, and drive innovation.

Technological Advancements

The introduction of AI-enabled PCs and smartphones, along with improvements in memory prices and DRAM bit volume, will drive the need for more advanced semiconductors. This, in turn, will lead to technological advancements in the consumer electronics sector. Consumers can expect more powerful and feature-rich devices, with enhanced capabilities for AI processing, data storage, and overall performance.

Stabilization of Inventory Levels

The projected growth in semiconductor sales is expected to contribute to the stabilization of inventory levels of PCs and smartphones. As the electrification of manufacturing equipment continues and semiconductor content increases, the imbalance in inventory levels will gradually return to normal. This stabilization will benefit manufacturers, retailers, and consumers by ensuring a steady supply of devices and reducing price fluctuations.

Investment Opportunities

The positive outlook for the semiconductor market, coupled with the interest in government semiconductor subsidy funding, presents investment opportunities for companies operating in the semiconductor industry. With the projected growth in sales, investors may consider allocating resources to semiconductor manufacturers, suppliers, and related industries to capitalize on the expected expansion and potential returns.

Advancement of AI Silicon

As AI adoption increases and AI-enabled devices become more prevalent, the demand for AI silicon is expected to grow significantly. IDC predicts that AI silicon will account for nearly $200 billion in semiconductor revenues by the end of the forecast period. This advancement in AI silicon will drive further innovation in AI technologies and applications, shaping the future of various industries.

In conclusion, the projected growth in global semiconductor sales in 2024 is expected to have a positive economic impact, boost AI adoption, drive technological advancements, stabilize inventory levels, create investment opportunities, and advance AI silicon. These effects highlight the significance of the semiconductor industry in driving innovation, economic growth, and technological progress.