According to the IDC forecast, sales of semiconductor products, excluding memory, will decrease by 7.2%
IDC experts have prepared a forecast for the semiconductor industry that takes into account the impact of the COVID-19 pandemic. According to analysts, global revenue from semiconductor manufacturing in 2019 fell by 12.2% to $ 418 billion due to a slowdown in the global economy and trade conflict between the United States and China. The increase in stock levels in certain areas, such as smartphones and cloud infrastructure, has led to price pressures and negatively impacted sales of semiconductor products. The driving force behind the decline was a decrease of 37.3% and 27.7% in the DRAM and NAND markets, respectively, which followed after more than two years of strong growth.
The downturn in the semiconductor industry will continue throughout 2020
Instead of the expected bottom and a gradual recovery in 2020, a further decline is now forecast due to the impact of the pandemic. Based on the latest evidence, IDC expects the entire semiconductor market to decline by 4.2% over the year and excluding the DRAM and NAND markets by 7.2%.
Analysts say demand for semiconductor products will be very uneven across industry markets. In the automotive and industrial segments, the impact of the pandemic will be especially noticeable, and smartphones will remain the main driver of demand. However, overall demand will be weak here, as the “major Chinese OEM” must first reduce the inventory that has accumulated in the distribution channel over the past quarters. This will force other manufacturers in China to focus on the release of 5G devices, which are associated with potential subsidies from operators. IDC expects 5G device output to grow this year even in the face of uncertainty in demand.
