The global semiconductor industry saw its sales dropped around $47 billion to nearly $527 billion in 2023, according to estimations by the Semiconductor Industry Association (SIA). This was a sharp downturn from the record 2022, but good news is that sales picked up significantly in the second half of the year, showing signs of a strong recovery and positive expectations for the future.
The semiconductor industry supplied chips worth $526.8 billion in 2023, an 8.2% decrease from 2022's all-time high of $574.1 billion. Slow sales of chips in the first half of the year was attributed to inventory corrections by client PC, consumer electronics, and server sectors. Meanwhile, chip sales in Q4 2023 jumped to $146 billion, up 11.6% compared to Q4 2022 and 8.4% higher than in Q3 2023. December also ended on a high note with sales reaching $48.6 billion, a 1.5% increase from November, according to the SIA.
In terms of product categories, logic products — CPUs, GPUs, FPGAs, and similar devices that process data — led the charge with $178.5 billion in sales, making it the industry's largest segment that outsells all three others combined. Memory followed with revenue of $92.3 billion, which was a result of declining prices of 3D NAND and DRAM in the first half of the year. In both cases, sales were down year over year.
By contrast, sales of microcontroller units (MCUs) and automotive integrated circuits (ICs) saw impressive of 11.4% and 23.7% year-over-year, respectively, with MCUs revenue reaching $27.9 billion and automotive ICs hitting a new high of $42.2 billion. Strong shipments of MCUs and automotive ICs indicate rapid chip demand growth from makers of cars as well as various smart devices as these industries now use more semiconductors than ever.
"Global semiconductor sales were sluggish early in 2023 but rebounded strongly during the second half of the year, and double-digit market growth is projected for 2024," said John Neuffer, SIA president and CEO. "With chips playing a larger and more important role in countless products the world depends on, the long-term outlook for the semiconductor market is extremely strong."
As far as sales of chips across different parts of the world are concerned, Europe was the only region that saw an increase in sales, growing by 4%. Other regions did not perform this well: sales of chips in the Americas declined by 5.2%, Japan declined by 3.1%, and China experienced the biggest drop at 14%, according to the SIA.
"Advancing government policies that invest in R&D, strengthen the semiconductor workforce, and reduce barriers to trade will help the industry continue to grow and innovate for many years to come," Neuffer said.
Graphs generated by DALL-E/OpenAI based on data from the SIA
