The analyst firm Gartner expects semiconductor growth to slow to 7% due to weakening PC and mobile sales caused by hard economic conditions. In the previous quarter, Gartner has forecasted semiconductor growth of 13.6% in 2022, but has now revised this down.
Commenting on the findings, Richard Gordon, Practice VP at Gartner, said:
“Although chip shortages are abating, the global semiconductor market is entering a period of weakness, which will persist through 2023 when semiconductor revenue is projected to decline 2.5%. We are already seeing weakness in semiconductor end markets, especially those exposed to consumer spending. Rising inflation, taxes and interest rates, together with higher energy and fuel costs, are putting pressure on consumer disposable income. This is affecting spending on electronic products such as PCs and smartphones.”
Last quarter, Gartner estimated that 2022 semiconductor revenue would be $675.9 billion. Due to the fact that economic conditions are expected to become worse, it revised revenues down $36.7 billion to $639.2 billion. Early predictions for 2023 are even more dire for the industry, with revenues expected to contract by 2.5% to $623 billion.
Semiconductors revenues got a nice boost in 2020 and 2021 due to the coronavirus lockdowns, however, tighter budgets and a return to the office mean that people aren’t buying as many new PCs or smartphones. This is causing semiconductor demand to fall.