Global semiconductor revenue grew 1.1% last year: Gartner

Global semiconductor revenue increased by only 1.1% in 2022 to total $601.7 billion, up from $595 billion in 2021, according to a report by analyst firm Gartner published on Tuesday, which attributed the meagre growth in the semiconductor market to the rapid deterioration in the global economy and slump in demand for consumer electronics. 

In the latest report published on Tuesday, Gartner said, the combined revenue of the top 25 semiconductor vendors increased 2.8% in 2022 and accounted for 77.5% of the market. 

According to Gartner, the combined revenue of the top 25 semiconductor vendors increased by 2.8% in 2022 and accounted for 77.5% of the market. 

“2022 began with many semiconductor devices in shortage resulting in extended lead times and increasing pricing which led to reduced electronic equipment production for many end markets. As a result, OEMs started hedging themselves from shortages by stockpiling chip inventory,” said Andrew Norwood, VP Analyst at Gartner. 

“However, by the second half of 2022, the global economy began to slow under the strain of high inflation, rising interest rates, higher energy costs and continued Covid-19 lockdowns in China, which impacted many global supply chains,” he added. 

Samsung Electronics retained the top spot, despite revenue falling 10.4% in 2022, primarily due to declines in memory and NAND flash sales, according to the report. Intel held on to the second position with a 9.7% market share. However, the company was impacted by the significant decline of the consumer PC market and strong competition in its core x86 processor businesses and revenue growth declined by 19.5%, it said. 

Moreover, memory chip market - largely defined by dynamic RAM (DRAM) and NAND flash - which accounted for approximately 25% of semiconductor sales in 2022, was the worst-performing device category, experiencing a 10% revenue decrease, said Gartner. 
Overall non-memory chips revenue – largely comprising System-on-chips (SoCs) followed by image sensors, power management chips and smart card chips - increased by 5.3% in 2022, and was driven by strong demand from the automotive and industrial markets, said the analyst firm. 

In November 2022, Gartner had revised its semiconductor revenue estimates for both 2022 and 2023, as against a July report in which it projected the revenue in 2022 to grow at 7% to $639 billion and then decline by 2.5% to reach $623 billion in 2023. But in its November report, the analyst firm said that the semiconductor industry is expected to see its revenue decline by 3.6% to $596 billion in 2023 due to the worsening economic situation and the weakening consumer demand. 

A separate projection by the World Semiconductor Trade Statistics (WSTS) released in November also suggested a contraction of about the same level. “The global semiconductor market is forecast to shrink 4% in 2023 to $557 billion, the first annual contraction since 2019,” WSTS said.