Semiconductor market set for impressive rebound in 2024, Gartner reports
Gartner has projected a significant bounce-back for the global semiconductor industry in 2024, with expected revenue reaching $624 billion, marking a 17% growth. This forecast comes after a challenging period, with a steep 10.9% revenue decline in 2023. The recovery is anticipated to be led by a resurgence in the memory market, which is predicted to see a remarkable 66.3% growth following a 38.8% downturn.
Analysts highlight two key areas within the memory market: NAND Flash and DRAM, forecasting revenue surges of 49.6% to $53 billion and 88% to $87.4 billion, respectively. These figures point to a dynamic recovery, fueled by a bottoming out of NAND Flash pricing and a DRAM pricing rebound, anticipated to take full effect in 2024.
Alan Priestley, VP analyst at Gartner, underscored the role of artificial intelligence in this positive outlook. Despite the current slump, demand for chips to support AI workloads, particularly GPUs, remains strong and is set to invigorate the semiconductor industry. Developments in generative AI (GenAI) and large language models necessitate high-performance GPU-based servers and accelerator cards in data centres, creating a burgeoning market for these components.
Gartner estimates a corresponding rise in the deployment of workload accelerators. By 2027, it is expected that more than 20% of new servers will include these accelerators, a testament to the growing reliance on AI techniques for data processing and analytics.
The DRAM sector, particularly, is experiencing a high oversupply level and depressed demand. This has led vendors to drive market prices down to reduce inventory. The oversupply is projected to persist through the fourth quarter of 2023, setting the stage for a price rebound. The full impact of these pricing increases, however, will only materialise in 2024, leading to the forecasted revenue upsurge.
Similarly, the NAND Flash segment is navigating through a period of anemic demand and declining prices due to substantial oversupply. Conditions for vendors are expected to improve over the next 3-6 months, positioning the industry for a substantial recovery in the following year.
The semiconductor industry’s revival is not just a short-term bounce, Gartner said. The integration of AI into data centre applications suggests a sustained demand for semiconductors well into the future. The increasing need for workload accelerators indicates a broader trend where AI and machine learning are becoming integral to computing infrastructure.
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