The Global Semiconductor Industry is Experiencing a Strong Turnaround

According to the latest report from Semiconductor Intelligence, the global semiconductor industry is experiencing a strong turnaround. WSTS has revised its data for 2Q 2023 growth to 6.0%, up from 4.2% previously reported for 1Q 2023. In addition, 3Q 2023 saw a growth of 6.3% from the previous quarter (2Q 2023).

Semiconductor Intelligence has forecasted sequential growth of 3% in 4Q 2023, with a year-to-year growth of 6% during the same period. This growth sets the stage for double-digit year-on-year growth for each quarter of 2024.

The top 15 semiconductor companies have all reported revenue growth in 3Q 2023 from the previous quarter. The growth rate varied, with Texas Instruments and Analog Devices reporting less than 1% growth, while Nvidia, Samsung, SK Hynix, and MediaTek recorded double-digit growth rates. In September, it was reported that Nvidia surpassed Intel to become the largest semiconductor company. However, Nvidia's 3Q23 results will not be official until it reports earnings next week.

While TI, Infineon, STMicroelectronics, NXP, and Renesas have generally fared better in 2023 than memory companies and companies more dependent on PCs and smartphones, automotive business is not expected to decline in 4Q23, but other factors are being cited. TI foresees a weak general environment, Infineon stated auto would be up in 4Q23, but other segments are sluggish. ST pointed to weakness in industrial, NXP blamed the communications infrastructure segment, and Renesas cited inventory adjustments.

Semiconductor Intelligence expects the strongest revenue growth in 2024 to come from memory companies (Samsung, SK Hynix, and Micron), PC and computing focused companies (Nvidia, Intel, and AMD), and smartphone focused companies (Qualcomm and MediaTek).

However, forecasts for the year 2023 semiconductor market change are homing in on the minus 9% to minus 12% range. Semiconductor Intelligence has projected minus 9.5%. Political tensions are high, particularly between the US and China, and wars continue in Ukraine and Israel/Gaza. Regardless of these uncertainties, Semiconductor Intelligence believes that we are poised for a healthy semiconductor market in 2024 and beyond.