TOKYO, December 31, 2023 – The global semiconductor market is poised for a remarkable resurgence in 2024, with a projected growth rate of 13.1 percent, soaring to a record-breaking $588.36 billion. This optimistic forecast, released by the World Semiconductor Trade Statistics (WSTS), a consortium of major chip manufacturers, has been revised upward from the previous estimate of 11.8 percent, reaffirming the industry’s resilience following a challenging period.
Recovery amidst AI demand surge
The recent downturn in the semiconductor market, primarily due to weaker demand for memory chips in 2023, is expected to be a temporary setback. The industry is now gearing up for a substantial rebound, driven by a surging appetite for chips used in artificial intelligence applications. This surge in demand can be attributed to the widespread adoption of generative AI, with notable contributions from innovations like ChatGPT, an AI chatbot developed by U.S.-based OpenAI.
Additionally, the market’s recovery is propelled by improved sales figures for personal computers and smartphones, bolstering confidence among key industry players. Intel Corp., for instance, anticipates reporting its first revenue growth in two years during the October-December period, reflecting the positive momentum in the sector. Rival firms, Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co. are also optimistic about their earnings outlook in the near future.
Memory chips at the forefront of growth
In the projected revival of the semiconductor market in 2024, memory chips are expected to play a pivotal role. Billing for memory chips is projected to surge by an impressive 44.8 percent compared to the previous year. This substantial growth is a testament to the escalating demand for data storage and processing capabilities across various industries.
While memory chips take the lead, other categories are also poised for growth. Logic chips are forecasted to witness a healthy growth rate of 9.6 percent, while image sensor chips are expected to experience a more modest increase of 1.7 percent. These diverse sectors within the semiconductor industry reflect a robust and dynamic marketplace catering to a wide range of technological applications.
Regional variations in growth
Regarding regional dynamics, the Americas are expected to experience the most substantial growth in 2024, with an impressive outlook of 22.3 percent. This buoyant expansion can be attributed to the region’s innovation-driven economy and strong demand for cutting-edge technology.
The Asia-Pacific market, home to numerous manufacturing hubs for smartphones and PCs, is also set to thrive with an anticipated growth rate of 12.0 percent. This region’s pivotal role in global electronics production bolsters its semiconductor industry.
Meanwhile, the Japanese market is projected to see more modest growth at 4.4 percent. This is primarily attributed to a relatively smaller sales volume of memory chips in the country, resulting in Japan benefiting less from the sharp demand recovery in this sector.
The global semiconductor market is on the cusp of a significant resurgence, with a projected growth rate of 13.1 percent in 2024, reaching an all-time high of $588.36 billion. This resurgence is underpinned by surging demand for chips used in artificial intelligence applications, coupled with improved sales in the PC and smartphone sectors. Memory chips are poised to lead the market’s growth, supported by notable advancements in logic and image sensor chips.
Despite regional variations, the industry is set to experience a notable upswing in the coming year. The semiconductor market’s recovery signifies its resilience and underscores its pivotal role in powering the digital age.
As 2024 approaches, the semiconductor industry remains a vital driver of technological progress, innovation, and economic growth on a global scale.