The semiconductor market is expected to grow by 12.5% in 2025, with an estimated value of $687 billion.
The World Semiconductor Trade Statistics (WSTS) has revised the global semiconductor market forecast from 13% to 16%, as previously released last fall. This revision reflects the strong performance in the past two quarters, especially in the computing end market.
It is expected that in 2024, two main IC categories will drive the annual growth, with a double-digit increase: logic devices will grow by 10.7%, and memory will grow by 76.8%. In contrast, discrete devices, optoelectronic devices, sensors, and analog semiconductors are expected to experience a single-digit decline. Looking forward to 2025, WSTS predicts that the global semiconductor market will grow by 12.5%, with an estimated value of $687 billion. This growth is expected to be mainly driven by the memory and logic sectors. All other sectors are expected to achieve single-digit growth rates.
From a global market perspective, the semiconductor industry is experiencing a strong recovery. Data recently released by the Semiconductor Industry Association (SIA) shows that global semiconductor sales in the first quarter of 2024 totaled $137.7 billion, a significant increase of 15.2% compared to the first quarter of 2023. Regarding the 2024 semiconductor industry sales forecast, SIA President and CEO John Neuffer estimated in the data report that the overall sales in 2024 will achieve a double-digit increase compared to 2023.
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If the cyclical technology recovery expands to other electronic end markets, it will support the semiconductor industry's entry into the next upward cycle, which will last from the second half of this year to 2025.
Among them, memory chips are the most important sub-sector of the semiconductor market, mainly divided into flash memory and DRAM. According to data released by SIA, global semiconductor industry sales in 2023 reached $526.8 billion, with the largest category, logic chips, achieving sales of $178.5 billion. Memory chips, with sales of $92.3 billion, ranked second, accounting for about 17.5% of the global semiconductor market share.
TrendForce has revised the server DRAM contract price forecast for the second quarter of this year from the initial 3%-8% to 15%-20%. This marks the third consecutive quarter of double-digit percentage growth since the fourth quarter of 2023. In April of this year, server DRAM prices for all product categories increased by about 10%-20%. The rise in DRAM prices this round was initially due to increased downstream demand, but since the beginning of this year, the strong earthquake in the Taiwan region has affected the market demand; in addition, supply chain sources said, "The demand for HBM is too high, causing the industry to start looking for performance alternatives, such as DDR5, which is relatively cheaper in price and has lower power consumption."Looking again at NAND, due to the large-scale adoption of enterprise-grade (Enterprise) SSDs by AI servers since February, as well as PC and smartphone manufacturers responding to price increases and continuously raising inventory, NAND Flash revenue in the first quarter of 2024 increased by 28.1% quarter-on-quarter, reaching 14.71 billion US dollars.
As the global memory chip market continues to recover, mainstream memory chip manufacturers have already taken the lead in raising prices. According to Kioxia's financial report, in the first quarter of 2024, the selling price of NAND Flash (its core product) in yen increased by 15%-19% quarter-on-quarter, marking the third consecutive quarter of increases.
Hynix's DRAM product prices have been adjusted upwards month by month since the fourth quarter of last year, and have now accumulated an increase of about 60%-100%, with the increase in the second half of the year expected to slow down.
It is reported that Samsung Electronics also plans to increase the prices of enterprise SSDs by 20%-25% in the second quarter of this year. Originally, Samsung Electronics planned to raise prices by 15%, but obviously, the growth in market demand exceeded expectations, so the price increase has been expanded.
In stark contrast to the storage market, the automotive market is still shrouded in a layer of fog. Brady Wang, Deputy Director of Counterpoint Research, said that at this stage, the demand for electric vehicles has slowed down, and sales are not as expected, leading to a backlog of inventory in the current automotive chip market.
"We have observed that since the third and fourth quarters of 2023, several benchmark markets have shown an oversupply. For example, Power Management Integrated Circuits (PMICs) are mainly concentrated in lower-end process technologies, and as a large number of Chinese foundries enter the market to compete, there is an oversupply; in addition, similar situations have also occurred with relatively low-end MCU products." He continued, saying that chip giant TI also joined the supply competition, leading to an increase in the overall market supply.
In terms of relatively scarce automotive electronic chips, automotive storage chips have been affected by the 2023 storage manufacturers' production reduction and inventory reduction, and the current inventory level is relatively stable, while the new energy electric vehicle market is still in an upward stage, and the demand for large-capacity storage chips continues to increase. In terms of power devices, SiC and IGBT modules, as the current mainstream solutions, the expansion of production capacity is difficult to keep up with the penetration rate of automotive electrification in the short term, and the supply of some products is still relatively tight.
IDC believes that as the long-term inventory adjustments in the two largest segments, personal computers and smartphones, recede, the visibility of semiconductor growth will increase. With electrification continuing to drive the growth of semiconductor content in the next decade, the inventory levels of automotive and industrial sectors are expected to return to normal in the second half of 2024.
