Omdia: Study finds semiconductor market sees quarterly decline due to weak demand

Source: Omdia

Nvidia maintained its strong growth momentum, increasing its market share by 2% and accounting for 14.5% of the total semiconductor market revenue. It has surpassed the traditional semiconductor leaders Samsung and Intel (Samsung + Intel total 18.6%), and Nvidia's market share is still rising. In addition, with the recovery of memory growth, SK Hynix and Micron have risen in the market share ranking.

The intelligent electrification transformation and the integration of the supply chain brought about by the epidemic triggered high growth in automotive semiconductors in previous years, but due to the slowdown in the overall growth trend, the automotive field was ultimately not immune to the decline. Starting from the third quarter of 2020, the automotive field has achieved revenue growth for 13 consecutive quarters, but there was a slight decline of 0.6% in the fourth quarter of 2023. The decline in the first quarter of 2024 was even greater, down 5.1% from the previous quarter. This downward trend reflects the broad deceleration in demand for vehicles. The growth rate of electric vehicles has slowed in recent quarters, leading to a readjustment of semiconductor demand. Despite these challenges, the automotive semiconductor market is still an area that is expected to maintain long-term growth over the next five years.

Omdia's Global Semiconductor Manufacturing Market Tracker (GMMT) and Specialized Fab Tracker - Q4 2023 report show that combined factory utilization (IDM + fab) reflects the overall trend of the semiconductor industry. Semiconductor demand peaked at the beginning of the COVID-19 pandemic in 2022, but slowed significantly in the second half of the year, while record high inventory levels also had a significant impact on the market, causing its utilization to drop sharply. Although semiconductor revenue continued to grow in 2023, the utilization rate of manufacturing plants remained at a low level of around 80%.

“In the second half of 2023, utilization rates begin to recover slightly and the market begins to seek balance,” said Craig Stice, principal analyst for semiconductor research at Omdia. “However, demand in traditional application areas has not yet fully recovered, and a significant gradual improvement in demand is expected in the second half of 2024. This should lead to inventory adjustments, which will once again drive up factory utilization.”

Source: Omdia