Semiconductor Revenue Drops by 11.1% in 2023, Memory Market Faces Historic Decline
According to preliminary results by Gartner, Inc., the worldwide semiconductor revenue in 2023 witnessed a significant decline of 11.1% compared to the previous year. This downturn in the market can be attributed to the memory segment’s worst decline in history. Alan Priestley, VP Analyst at Gartner, stated that the semiconductor industry’s cyclicality was evident once again, but 2023 proved to be a challenging year with memory revenue experiencing a substantial decline.
In 2023, only nine of the top 25 semiconductor vendors were able to achieve revenue growth, with ten companies facing double-digit declines. Consequently, the combined semiconductor revenue of the top 25 vendors declined by 14.1%, accounting for 74.4% of the market, down from 77.2% in 2022.
The rankings of the top 10 semiconductor vendors also underwent changes due to the underperformance of memory vendors in 2023. However, one notable development was Intel reclaiming the number one spot in the industry.
Among all the segments in the semiconductor market, memory products suffered the most significant decline, with a revenue drop of 37% in 2023. Joe Unsworth, VP Analyst at Gartner, explained that weaker-than-expected demand and excess channel inventory impacted smartphones, PCs, and servers, which are major consumers of DRAM and NAND. DRAM revenue plummeted by 38.5% to reach $48.4 billion, while NAND flash revenue decreased by 37.5% to $36.2 billion.
On the other hand, nonmemory revenue experienced a comparatively milder decline of 3% in 2023. This segment faced weaker demand and excess channel inventory throughout the year. Unsworth highlighted that non-memory vendors encountered a relatively favorable pricing environment compared to memory vendors. The demand for non-memory semiconductors for applications like AI was the primary growth driver. Additionally, the automotive sector, particularly electric vehicles, as well as the defense and aerospace industries, outperformed most other application segments.
In summary, 2023 proved to be a challenging year for the semiconductor market, with an 11.1% decline in revenue. The memory segment faced an unprecedented decline, while the nonmemory segment experienced a more moderate drop. However, certain application segments, such as AI, electric vehicles, and defense and aerospace industries, showed resilience during this difficult period. The semiconductor industry now needs to navigate these challenges and strategize for future growth.
Please find the link to the original article by Gartner Inc. [here](https://www.gartner.com/en/newsroom/press-releases/2024-03-18-gartner-says-global-semiconductor-revenue-declined-11-point-1-percent-in-2023)
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