SAN MATEO, Calif.–(BUSINESS WIRE)–lt;a href=”https://twitter.com/hashtag/DRAM?src=hash” target=”_blank”gt;#DRAMlt;/agt;–After three consecutive years of growth, with year-over-year growth of
13.2% in 2018, the latest update to the Semiconductor
Applications Forecaster (SAF) from International Data Corporation (IDC)
forecasts that worldwide semiconductor revenue will decline to $440
billion in 2019, down 7.2% from $474 billion in 2018. The SAF also
forecasts that semiconductor revenues will recover in 2020 and log a
compound annual growth rate (CAGR) of 2.0% from 2018-2023, reaching $524
billion in 2023.
After a multiyear growth cycle of strong demand and appreciating average
selling prices (ASPs) for DRAM and NAND, the end of last year brought
oversupply, which will continue throughout the year and into 2020.
Despite the challenging fourth quarter, the DRAM and NAND memory markets
grew to $99 billion and $55 billion in 2018 respectively, reflecting
year-over-year growth rates of 36% and 12% for 2018. Excluding DRAM and
NAND, the overall semiconductor market grew by 8% year over year. For
2019, non-memory semiconductors are forecast to grow 1% to $319 billion.
Both DRAM and NAND are expected to decline in 2019 and 2020.
The strong memory market resulted in Samsung Electronics retaining the
top semiconductor manufacturer position and enabled memory manufacturers
to be three of the top four semiconductor companies this past year.
Revenue concentration also continues to increase for the overall market,
with the top 10 companies making up 62% of the semiconductor market
compared to 60% in 2017 and 56% in 2016.
IDC expects market consolidation will begin to accelerate as the
industry gets more clarity on the trade tariff dispute between China and
the U.S. So far this year, there have already been six notable M&A deals
announced and one large divestiture by Intel. IDC expects more moves in
2020 and 2021 in the sensor, connectivity, automotive, and AI and
computer vision markets as suppliers look to drive more top-line growth
and improve access to new markets.
“The current market downturn is being driven by a broad weakness in
demand specifically centered in China and an ingestion of excess
inventories in some of the major markets including automotive, mobile
phones, and cloud infrastructure,” said Mario
Morales, program vice president, Semiconductors at IDC. “We expect
the market to bottom by end of the third quarter this year as we work
through inventories and demand begins to gradually return. Cloud
infrastructure investment, 5G mobile devices, WiFi 6 adoption, Smart
NICs, automotive sensors, powertrain technologies, AI training
accelerators, and edge inference SoCs will be instrumental in our growth
expectations for 2020 and beyond.”
In 2018, the automotive market and the industrial markets, excluding
memory, grew at 4.8% and 7.8%, respectively. “While electrification,
infotainment, and advanced driving features are increasing semiconductor
content per automobile, the decline in automobile unit sales in 2018
lowered overall growth in automotive semiconductors. Economic
deceleration and declining vehicle sales will continue to put pressure
on the automotive semiconductor market throughout this year,” said Nina
Turner, research manager for Semiconductors at IDC. “However, our
long-term thesis remains intact. The automotive market remains one of
the strong growth drivers over the forecast horizon as semiconductor
content and design activity for autonomous enabling technologies will
continue to drive 3-4 times more growth than the overall market.”
Other key findings from IDC’s Semiconductor Application Forecaster
(excluding memory) include:
While the computing industry experienced strong growth in 2017 and
2018, the SAF forecasts semiconductor revenue for the computing
industry segment to decline 5.1% this year but will show a positive
CAGR of 1.3% for the 2018-2023 forecast period. Two bright spots for
the computing segment are x86 servers and SSDs, growing with an 11.3%
and 9.8% CAGR respectively for 2018-2023.
Semiconductor revenue for the mobile wireless communications segment
will grow 1.8% year over year this year with a CAGR of 4.8% for
2018-2023. Semiconductor revenue for 4G mobile phones will experience
a slowdown as 5G phones begin to ramp up in 2020, becoming mainstream
by the middle of the next decade. RF subsystem in mobile devices will
continue to drive the majority of the revenue growth as the subsystem
continues to support more complexity, additional antennas, and the
increase in bands on every phone.
The consumer semiconductor segment will grow at a 6.4% CAGR for
2018-2023 as consumer IoT devices and home automation continue to gain
traction and scale. Connected devices will continue to drive more
sensors and processing at the edge.
Additional information can be found at IDC.com:
The IDC report, Worldwide
Server DRAM DIMM by Workload Forecast, 2019–2023 (IDC
#US44944719), provides an outlook for the server DRAM DIMM market for
the 2018–2023 period.
The IDC presentation, Worldwide
Memory Demand and Supply 4Q18–4Q19 and 2019–2023 Update (IDC
#US44919519), provides the 4Q18 memory (DRAM and NAND) vendor share
results and forecasts for both the short-term (4Q18–4Q19) and the
long-term (2019–2023) worldwide memory market.
The IDC pivot table, Worldwide
Mobile Connectivity Forecast Pivot Table (IDC #US44988319),
includes the yearly data for mobile connectivity for the 2005–2023
period. This document looks at all the products that incorporate mobile
connectivity from the perspective of silicon suppliers.
The IDC pivot table, Worldwide
Mobile Phone and Tablet Application Processor Market Shares, 4Q18
(IDC #US43824719), provides 4Q18 data for application processors in
mobile phones and tablets.
Semiconductor Applications Forecaster database serves as the basis
for IDC semiconductor supply-side documents, including market forecasts
and consulting projects. This database contains revenue data collected
from over 150 of the top semiconductor companies for 2015-2018 and
market history and forecasts for 2014-2023. Revenue for over twelve
semiconductor device areas, four geographic regions, seven industries,
and more than 65 end-device applications are also included in the
For more information about the SAF, please contact Nina Turner at [email protected]
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