Semiconductor growth to slow to 7% in 2022

Analyst firm Gartner expects semiconductor growth to slow to 7 percent as tough economic conditions lead to weaker PC and mobile sales. In the previous quarter, Gartner had forecast semiconductor growth of 13.6 percent in 2022, but that has now been revised downward. commenting on the findings, Richard Gordon, vice president of practice at Gartner, said.

"While the chip shortage is easing, the global semiconductor market is entering a period of weakness that will continue through 2023, when semiconductor revenues are expected to decline by 2.5 percent. We are already seeing weakness in the end markets for semiconductors, especially those exposed to consumer spending. Rising inflation, taxes and interest rates, combined with increased energy and fuel costs, are putting pressure on consumers' disposable income. This is impacting spending on electronics such as personal computers and smartphones."

Last quarter, Gartner estimated that semiconductor revenue in 2022 would be $675.9 billion. It revised the revenue downward by $36.7 billion to $639.2 billion as economic conditions are expected to get worse. Early forecasts for 2023 are even worse for the industry, with revenues expected to contract 2.5 percent to $623 billion.

Revenue from semiconductors got a nice boost in 2020 and 2021 as the foot ban brought on by the coronavirus spurred working and studying from home, however, two years on, tighter budgets and a gradual return to the office mean people are no longer buying as many new PCs or smartphones. This has led to a drop in demand for semiconductors.