Semiconductor revenue will decline 7.2 percent to $440 billion in 2019 from $474 billion in 2018, according to a research report from IDC.
Semiconductor revenues will recover in 2020 and achieve a compound annual growth rate (CAGR) of 2 percent from 2018-2023, reaching $524 billion in 2023.
Semiconductor revenue grew in the last three years, with the sector achieving a growth of 13.2 percent in 2018.
The DRAM memory market grew 36 percent to $99 billion in 2018. The NAND memory market rose 12 percent to $55 billion in 2018.
“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.
Cloud infrastructure investment, 5G devices, WiFi 6 adoption, Smart NICs, automotive sensors, powertrain technologies, AI training accelerators, and edge inference SoCs will be instrumental in the growth.
Excluding DRAM and NAND, the overall semiconductor market increased 8 percent. Non-memory semiconductors are forecast to grow 1 percent to $319 billion in 2019. 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 continues to increase for the overall market, with the top 10 companies making up 62 percent of the semiconductor market compared to 60 percent in 2017 and 56 percent in 2016.
There will be more consolidation in the global semiconductor market 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.
There were six notable M&A deals announced in the worldwide semiconductor market so far this year.
Semiconductor revenue for the mobile wireless communications segment will grow 1.8 percent this year with a CAGR of 4.8 percent for 2018-2023.
Semiconductor revenue for 4G mobile phones will experience a slowdown as 5G phones begin to ramp up in 2020. 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 percent 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.
