Coronavirus Impact: Global Semiconductor Revenue will Witness Steep Decline in 2020

semiconductor revenue

The new coronavirus pandemic will hit the semiconductor supply and demand, leading to a decline of 0.9 per cent in worldwide semiconductor revenue this year, a Gartner report said on Thursday. This is sharply down from the earlier forecast of 12.5 per cent growth for the year.

Overall, 2020 global semiconductor revenue has been reduced from the previous quarter’s forecast by $55 billion, to $415.4 billion.

“The wide spread of COVID-19 across the world and the resulting strong actions by governments to contain the spread will have a far more severe impact on demand than initially predicted,” said Richard Gordon, research practice vice president at Gartner.

“This year’s forecast could have been worse, but growth in memory could prevent a steep decline,” he added. Semiconductor memory revenue will account for 30 per cent of the total worldwide semiconductor market in 2020. The memory market is forecast to reach $124.7 billion in 2020, an increase of 13.9 per cent, while the nonmemory revenue market is on pace to total $290.6 billion, a decline of 6.1 per cent (year over year).

Within memory, NAND flash revenue is forecast to grow 40 per cent in 2020 due to severe shortages persisting from 2019, which keeps pricing firm.

“NAND flash supply will remain historically low in 2020 due to fab delays and technology transitions, but the demand will diminish later in 2020,” said Gordon. Strong demand from cloud service providers in the first half of 2020 will push pricing and revenue higher in server DRAM. However, this growth will be more than offset by weak demand and falling prices from the smartphone market.

For the DRAM market overall, Gartner analysts estimate DRAM revenue will decline 2.4 per cent in 2020. “Non-memory semiconductor markets will experience a significant reduction in smartphone, automobile and consumer electronics production and be heavily impacted across the board,” Gordon informed.

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