Global semiconductor industry revenue is expected to grow almost 17 percent year-on-year in 2024, following a slump in 2023, largely fueled by a surge in demand for memory chips, according to U.S.-based market information advisory firm Gartner Inc.

Gartner said in a statement released overnight that the global semiconductor industry is forecast to generate US$624.0 billion in sales in 2024, a 16.8 percent rise from 2023, during which year-on-year revenue is predicted to fall 10.9 percent to US$534.0 billion amid inventory adjustments caused by demand weakness.

The global memory chip market is expected to stage a strong rebound in 2024 and post a 66.3 percent year-on-year surge in sales, following a year-on-year fall of 38.8 percent in 2023 due to oversupply issues which affected the semiconductor industry worldwide, Gartner said.

Over the next three to six months, Gartner said, the price of NAND Flash memory chips, a type of storage technology that does not require power to retain data, will hit rock bottom, with conditions thus improving for sellers and a robust recovery predicted in 2024, with revenue expected to rise US$53 billion, a 49.6 percent rise from 2023.

Gartner said through the fourth quarter of 2023, the dynamic random access memory (DRAM) chip market oversupply will continue, triggering a pricing rebound, the full effects of which will only be seen in 2024 when sales are estimated to soar 88 percent to US$87.4 billion.

"We are nearing the end of 2023 and strong demand for chips to support artificial intelligence (AI) workloads, such as graphics processing units (GPUs), is not going to be enough to save the semiconductor industry from double-digit decline in 2023," Gartner vice president analyst Alan Priestley said in the statement.

"Reduced demand from smartphones and PC customers coupled with weakness in data center/hyper scaler spending are influencing the decline in revenue this year," Priestley added.

Gartner said developments in generative AI (GenAI) and large language models are driving up demand for high-performance GPU-based servers and accelerator cards in data centers, which subsequently creates a need for workload accelerators.

Gartner analysts estimated that by 2027, the integration of AI techniques into data center applications will pave the way for those workload accelerators to feature in more than 20 percent of new servers.

By: DocMemory
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