TechInsights Predicts Semiconductor Market to Double in 10 Years

TechInsights Predicts Semiconductor Market to Double in 10 Years

TechInsights Long-Term Semiconductor and Equipment Forecast, predicts:

  • 2024 will be a record year for industry revenues.
  • The total semiconductor market will pass its previous peak of 2022.
  • The market will more than double over the next decade and generate over a trillion dollars in revenue.

2023: A Weak Start but a Strong Finish

2023 has been a challenging year for the industry. While lockdowns drove a wave of consumer spending in previous years, weakening demand for semiconductors, oversupply, and a struggling global economy combined to create a strong downturn.

Generative artificial intelligence (AI) has caught the public interest. As AI access has become democratized, the silicon underpinning this revolution is in demand. Logic chips for generative AI are mainly aimed at the data centers used by cloud-computing providers. Order volumes are in the thousands, rather than the literal billions of integrated components (ICs) demanded by the mobile phone market. Cloud AI is a small part of the market by volume, but it reflects broader changes happening in the industry. Although shipment volumes for ICs overall are down, there is a significant upturn in average selling prices (ASPs).

The story of the recovery is one of revenues, not shipments. TechInsights’ tracking shows that Q3 2023 saw the market for ICs grow by 10% in revenue terms quarter-over-quarter, despite a continued slide of 2% in IC shipment volumes compared to Q2. Rising ASPs for advanced use cases such as AI are offsetting the decline in consumer electronics.

TechInsights Predicts Semiconductor Market to Double in 10 Years

Recovery Strengthens in 2024

We anticipate this recovery will continue throughout the end of the year and into 2024, strengthening as time goes on. TechInsights predicts that as consumer confidence returns and increases spend on electronics, shipment growth will return. An expected 5% growth in consumer electronics revenues will spur an 11% growth in IC shipments. Combined with strengthening ASPs, 2024 will be a record year. By revenue, we expect that the IC market will grow by 17% year-over-year.

The Longer-Term Outlook

In future years, we expect the double-digit growth in 2024 to continue out to 2026. The industry has not experienced three consecutive years of double-digit growth since 1993–1996. Then, it was driven by early growth of the internet. This time, there are a combination of factors: AI, electric vehicles, and replacement cycles of consumer electronics bought during lockdown.

By 2033, we expect semiconductor revenues to double and exceed a trillion dollars. To put that in context, if the semiconductor industry was a country, it would be the world’s 20th largest economy, slightly ahead of Switzerland. Little wonder that governments are investing to attract semiconductor companies as well as providing supply chain security across a huge range of products; it is an industry of rapidly growing economic importance.


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