LONDON, June 20,
2024 /PRNewswire/ -- In the first quarter of
2024, the semiconductor market experienced approximately 2% decline
falling to $151.5bn according to
Omdia's new Competitive Landscaping Tool. Typically, the first
quarter of the year sees a downturn with the market dropping 4.4%
by revenue following a strong fourth quarter being driven by
seasonal demand. Most segments within the semiconductor market
faced declines this quarter. The consumer segment was hit the
hardest dropping 10.4% from 4Q23 while the industrial segment
dropped 8.5% due to inventory adjustments. Even the automotive
segment, which has seen steady growth for years, turned negative
with a 5.1% decline in 1Q24.
The drops in these segments were offset by quarterly growth in
the data processing division, which increased 3.7%, driven by a
continuous high demand for NVIDIA's chips and other AI-related
products.
NVIDIA maintains its robust growth trajectory expanding its
market share by more than two percentage points now representing
14.5% of the total semiconductor market revenue. Despite overtaking
the traditional semiconductor leaders, Samsung and Intel who
collectively hold 18.6% of the semiconductor market revenue, NVIDIA
continues to gain ground. Additionally, with the resurgence of
memory growth, SK Hynix and Micron rose in their market share
rankings.
The automotive sector which initially resisted the industry-wide
semiconductor market growth triggered by the COVID-19 pandemic,
eventually succumbed to decline but quickly recovered. After 13
consecutive quarters of revenue growth, starting in 3Q20, the
automotive segment experienced a slight downturn of 0.6% in 4Q23.
However, the decline deepened in further in 1Q24 with a more
substantial drop of 5.1% from the previous quarter. This downward
trend reflects a broader deceleration in the demand for cars. The
growth rate of EVs has tapered off in recent quarters, prompting a
recalibration in semiconductor demand. Despite these challenges,
the auto semiconductor market remains a promising long-term growth
area, poised to climb over the next five years.
Omdia's Global Semiconductor Manufacturing Market Tracker (GMMT)
and the Pure Play Foundry Tracker (4Q23 reports), find that the
combined factory utilizations (IDM + Foundry) reflect the overall
trend within the semiconductor industry. After reaching a zenith in
semiconductor demand during the COVID era's early stages in 2022,
utilization rates plummeted in 2H22 due to substantial softening in
demand and record-high inventory levels. Despite semiconductor
revenue experiencing growth throughout 2023, fab utilization rates
have remained in the low 80% figures.
Omdia Chief Analyst Craig Stice
said, "Utilization rates began a slight uptick in 2H23 as the
market began seeking equilibrium. However, it has yet to
materialize as traditional demand patterns have not fully emerged.
Demand will continue to improve in 2H24, which should lead to
inventory corrections consequently driving up factory utilization
rates once again."
ABOUT OMDIA
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decisions.
Fasiha Khan
Fasiha.khan@omdia.com
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SOURCE Omdia