By Sowmyan Rajagopalan, CEO, Thalia Design Automation
Sowmyan Rajagopalan
The economic outlook for semiconductor industry in 2023
Since the start of the Covid-19 pandemic in 2020, the global market for semiconductors has not looked very stable. It has made long-term planning tough if not impossible. A forecast fall then turned into a rapid growth, followed by an oversupply problem with excess inventories. In 2021, more than $0.5 trillion units were shipped, which was a record, and represented a significant 26.2% growth in value over 2020.
That growth continued into 2022, with semiconductor industry growing at 7.3%. So what’s coming further down the track?
Due to an oversupply issue and slower demand in consumer electronics, Gartner’s forecast for 2023 is a small decline in the market by 2.5%. Even with that modest decline, we are still looking at a staggering $620 billion semiconductor market this year.
However, the market for automotive electronics continues to evolve to support the rapidly increasing volume of devices in the modern vehicle: from non-critical systems in audio, video, satellite navigation and connectivity devices, to fundamental systems in battery control, and mission critical Advanced Driver Assistance Systems (ADAS) and monitoring systems. Although analysts’ numbers differ, the forecasts for the growth of automotive electronics all show a similar and definite upward trajectory. The automotive industry could be a driving force for the industry – potentially leading the direction of consumer electronics with the largest tier one companies sourcing directly from foundries: changing the power balance and upsetting the decades-old structure of a tiered supply chain in automotive manufacturing.
