2023 semiconductor market revenue down 9% from 2022
A new Omdia report reveals a downturn in the semiconductor industry, with revenue down 9% from USD 597.7 billion in 2022 to USD 544.8 billion in 2023. A decline that follows two years of record growth, highlighting the cyclical nature of the semiconductor market.
"The extended upswing that commenced during the COVID era has concluded. Following a surge in semiconductor demand during the pandemic, leading to a market shortage, the situation has reversed. Demand has softened due to macroeconomic factors, while semiconductor component supply has increased," says Cliff Leimbach, Senior Research Analyst at Omdia in a press release.
In 2023 – despite the overall downturn in the semiconductor industry – AI emerged as a significant growth driver in the industry with companies focused on this segment reaping its benefits. Nvidia has been, as most of you already know by now, the clear winner in this segment. The company has more than doubled its semiconductor revenue from 2022 to USD 49 billion in 2023. This becomes even more noteworthy when you look at the fact that Nvidia's semiconductor revenue was under USD 10 billion before the pandemic in 2019. Though Nvidia has been the biggest name within the AI space, it is not the only company riding the AI-hypetrain.
High bandwidth memory (HBM) integrated with GPUs to facilitate AI is also seeing strong demand, with SK Hynix leading this segment and other major memory manufacturers venturing into the space. The memory market had a down year in 2023 overall, while the HBM market exhibited strong growth of 127% year-over-year in terms of 1Gb equivalent units, throughout 2023. Omdia forecasts that the HBM segment is likely to record even higher unit growth rates in 2024, ranging between 150-200%, and is expected to lead memory market growth.
In 2023, the automotive segment exerted greater influence in the semiconductor market as it increased its revenue growth to over 15% in 2023 to over USD 75 billion. The increase in electric vehicles and integration of intelligence into automobiles are driving up the demand for semiconductors in this segment and account for approximately 14% of the entire semiconductor market.
The downturn has notably affected major memory makers, traditionally among the top semiconductor companies by revenue. Previously, from 2017 to 2021, Samsung Electronics, SK Hynix, and Micron Technology were all ranked in the top five companies by revenue. However, amidst the challenging memory market conditions, Samsung is now ranked third, SK Hynix is ranked sixth, and Micron is ranked twelfth in 2023.
