Recently, IDC, a leading global IT market research and consulting firm, released a global semiconductor outlook report for 2024.
IDC believes that with the explosive growth of global demand for artificial intelligence and high-performance computing (HPC), coupled with the stabilizing demand for smartphones, personal computers, and infrastructure, as well as the elastic growth of the automotive industry, the semiconductor industry is expected to usher in a new wave of growth.
Galen Zeng, Senior Research Manager for Semiconductor Research in IDC Asia Pacific, stated:
"The strict control of supply and production by memory chip manufacturers has led to a rise in chip prices since early November this year. The demand for artificial intelligence will drive the overall semiconductor sales market to recover in 2024. The semiconductor supply chain, including design, manufacturing, packaging, and testing, will bid farewell to the downturn of 2023."
IDC predicts that the semiconductor industry will experience the following eight major trends next year.
1、 The semiconductor market is expected to recover in 2024, with semiconductor sales expected to increase by 20% year-on-year
IDC pointed out that due to weak demand in the chip market this year, the process of supply chain inventory consumption is still ongoing. Although there were sporadic short and urgent orders in the second half of this year, it is still difficult to reverse the 20% year-on-year decline in the first half of this year. Therefore, it is expected that the global semiconductor sales market will continue to decline by 12% in 2023.
However, the trend of decreasing chip production in 2024 will drive up product prices, coupled with an increase in the penetration rate of high priced HBM chips, which is expected to become a driving force for market growth.
With the gradual recovery of demand for smartphones and strong demand for AI chips, IDC predicts that the semiconductor market will return to a growth trend in 2024, with an annual growth rate of over 20%.
2、 ADAS (Advanced Driver Assistance Systems) and in car infotainment semiconductor markets will develop
IDC pointed out that the global trend of automotive intelligence and electrification is clear, which is an important driving force for the future semiconductor market.
At present, ADAS holds the largest share of the automotive semiconductor market, with a compound annual growth rate (CAGR) expected to reach 19.8% by 2027, accounting for 30% of the automotive semiconductor market that year. Driven by automotive intelligence and connectivity, information entertainment has occupied the second largest share of the automotive semiconductor market, with a compound annual growth rate of 14.6% by 2027, accounting for 20% of the market that year.
Overall, more and more automotive electronic products will rely on chips, which means that the demand for semiconductors will be long-term and stable.
3、 Expanding Semiconductor Artificial Intelligence Applications from Data Centers to Personal Devices
IDC predicts that with the advancement of semiconductor technology, starting from 2024, more artificial intelligence functions will be integrated into personal devices, which means that AI smartphones, AI personal computers, and AI wearable devices will gradually enter the market.
IDC predicts that with the introduction of artificial intelligence, there will be more innovative applications of personal devices, which will actively stimulate the demand for semiconductors and advanced packaging.
4、 The inventory consumption of IC design chips is gradually ending, and it is expected that the Asia Pacific market will grow by 14% by 2024
Despite the relatively sluggish performance of IC design chips in the Asia Pacific region in 2023 due to the market still digesting excess inventory, most IC suppliers remain resilient and actively invest and innovate. In addition, IC design companies continue to cultivate technology by adopting artificial intelligence in client devices and cars.
With the gradual recovery of the global personal device market, IDC predicts that there will be new growth opportunities for IC chips, and it is expected that the overall market will grow at a rate of 14% per year by 2024.
5、 The demand for advanced manufacturing outsourcing has surged
IDC pointed out that due to inventory adjustments and weak demand, the capacity utilization rate of the chip foundry industry has significantly decreased in 2023, especially for mature process technologies above 28nm.
However, due to the rebound in demand for some consumer electronics and the demand for artificial intelligence, the chip foundry industry has slowly recovered in the second half of 2023, with the recovery of advanced manufacturing being the most significant.
Looking ahead to 2024, with the efforts of TSMC, Samsung, and Intel, as well as the gradual stabilization of end-user demand, the chip foundry market will continue to rise, and it is expected that the global semiconductor foundry industry will achieve double-digit growth next year.
6、 The growth of China's production capacity will intensify the price competition for mature process chips
Under the influence of the US chip ban, China has been actively expanding production capacity. IDC believes that in order to maintain its capacity utilization, the Chinese chip industry is expected to continue offering discounted prices, which is expected to put pressure on "non Chinese" foundries.
In addition, due to the concentration of domestic wafer production on mature manufacturing, industrial control and automotive IC inventory from the second half of 2023 to the first half of 2024 will have to be destocked in the short term, which will continue to put pressure on suppliers and make it difficult for them to regain bargaining power.
7、 The compound annual growth rate of the 2.5/3D packaging market is expected to be 22% in the next five years
With the continuous improvement of semiconductor chip functionality and performance requirements, advanced packaging technology has become increasingly important.
IDC predicts that the 2.5/3D packaging market is expected to grow at a compound annual growth rate of 22% from 2023 to 2028, making it a highly anticipated area in the semiconductor packaging testing market.
8、 CoWoS supply chain capacity doubles, boosting AI chip supply
The wave of artificial intelligence has led to a surge in server demand, thanks to TSMC's advanced packaging technology "CoWoS". At present, the supply and demand gap of CoWos still reaches 20%. In addition to NVIDIA, international IC design companies are also increasing orders.
IDC predicts that by the second half of 2024, as more manufacturers actively enter the CoWoS supply chain, CoWoS production capacity will increase by 130% year-on-year.
IDC predicts that this will also drive a stronger supply of AI chips in 2024 and become an important growth booster for the development of AI applications.