Eight Trends in the Semiconductor Market Projected by IDC for 2024
Demand for AI and HPC, coupled with steady demand for smartphones, PCs, infrastructure, and resilient growth in the automotive industry, is expected to usher in a new wave of growth in the chip industry, says IDC, which expects eight trends in the semiconductor market by 2024:
Semiconductor Sales Market to Recover in 2024, Growing at 20% CAGR
The process of supply chain inventory depletion continues due to weak market demand. Despite some sporadic short orders and rush orders in the second half of 2023, it is still difficult to reverse the 20% annual decline in the first half of the year, so the semiconductor sales market is still expected to decline by 12% in 2023.
IDF Autumn 2009 - 32nm Westmere wafers After a memory market decline of more than 40% in 2023, the effect of production cuts pushing up product prices in 2024, coupled with increased penetration of high-priced HBMs, is expected to be a driving force for market growth. With the gradual recovery of smartphone demand and strong demand for AI chips, IDC expects the semiconductor market to resume its growth trend in 2024, with a CAGR of more than 20%.
ADAS and infotainment systems drive the automotive semiconductor market
ADAS accounts for a share of the automotive semiconductor market, with a CAGR of 19.8% by 2027, accounting for 30% of the automotive semiconductor market in that year.
Infotainment accounts for the second largest share of the automotive semiconductor market, with a CAGR of 14.6% by 2027, or 20% of the current year's market, driven by automotive intelligence and connectivity. Overall, more and more automotive electronics will rely on chips, meaning demand for semiconductors will be stable over time.
Semiconductor artificial intelligence applications expand from data centers to personal devices
Artificial intelligence is causing a stir because data centers require higher computing power, data processing, complex large language models, and big data analytics. As semiconductor technology advances, more AI capabilities are expected to be integrated into personal devices starting in 2024.
AI smartphones, AI PCs, and AI wearables will gradually be introduced to the market. The introduction of AI is expected to result in more innovative applications for personal devices, which will positively stimulate increased demand for semiconductors and advanced packaging.
IC Design Inventory Depletion Gradually Ends, Asia-Pacific Market Expected to Grow 14% by 2024
Despite the relatively subdued performance of IC designers in Asia Pacific in 2023 due to prolonged inventory rationalization, most suppliers remain resilient under market pressure.
Each supplier is actively investing and innovating to maintain its position in the supply chain. In addition, IC design companies continue to capitalize on the adoption of artificial intelligence in client devices and automobiles to nurture the technology. New growth opportunities will emerge as the global personal device market gradually recovers, and the overall market is expected to grow by 14% annually through 2024.
Demand for advanced processes in foundry industry surges
The foundry industry is affected by inventory adjustments and a weak demand environment, with capacity utilization falling sharply in 2023, especially for mature process technologies above 28nm.
However, 12-inch fabs recovered slowly in the second half of 2023 due to the rebound in demand for some consumer electronics and AI demand, with the recovery in advanced processes as significant.
Looking ahead to 2024, with the efforts of TSMC, Samsung, Intel, and the gradual stabilization of end-user demand, the market will continue to rise, and the global semiconductor foundry industry is expected to achieve double-digit growth next year.
China's growth in production capacity and price competition for mature processes intensified
Under the influence of the U.S. ban, China has been actively expanding its production capacity. In order to maintain capacity utilization, the Chinese industry continues to offer preferential pricing, which is expected to put pressure on "non-Chinese" foundries.
In addition, industrial control and automotive ICs will have to de-stock in the short term from H2 2023 to H1 2024, as wafer production is focused on mature processes, which will continue to put pressure on suppliers and their ability to regain bargaining power.
2.5/3D packaging market expected to grow at a CAGR of 22% from 2023 onwards
The 2.5/3D packaging market is projected to grow at a CAGR of 22% from 2023 to 2028, making it a highly visible segment of the semiconductor packaging and testing market.
CoWoS supply chain capacity tripled to increase AI chip supply
The AI wave has led to a surge in server demand, which relies on TSMC's advanced packaging technology, CoWoS. Currently, there is still a 20% gap between supply and demand for CoWoS. In addition to NVIDIA, orders from international IC design companies are also increasing. CoWoS capacity is expected to grow 130% by the second half of 2024, and more vendors will actively enter the CoWoS supply chain, which is expected to make the AI chip supply more robust in 2024, an important growth enabler for the development of AI applications.
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