Following both formidable shortages and substantial gluts in recent times, the semiconductor industry is forecast to see continued growth into next year.
The Semiconductor Industry Association's (SIA) State of the U.S. Semiconductor Industry report was recently released and forecasts that, after record-breaking sales in 2022 and an overcrowded market in 2023, 2024 is the year the semiconductor industry bounces back.
Let’s look deeper into the report and explore what’s driving the rising demand.
Please note: the figures included in this blog are based on the SIA State of the U.S Semiconductor Industry report and its sources.
The semiconductor industry set a record high for global sales in 2022, reaching $574 billion. This figure reinforced the immense demand for semiconductors caused in part by the COVID-19 pandemic across various industries, from consumer electronics to data centers.
However, despite this historic achievement, 2023 did not continue the trend.
The semiconductor market saw a notable downturn in 2023, with sales dropping by 8.2%. The first half of the year was particularly challenging, as weaker demand across several sectors impacted the industry.
However, this decline was short-lived. In the latter half of 2023, demand began to increase again — largely thanks to key industries like automotive, industrial, and AI.
One of the most significant contributors to the recovery of the semiconductor market in the second half of 2023 was the automotive sector. This industry became the third-largest end market for semiconductors by the end of the year. According to the SIA report, the automotive sector could generate $1 trillion in semiconductor sales by 2030 if innovation and investment continues at the current rate.
Another crucial factor in the rebound of semiconductor sales has been the growing role of artificial intelligence (AI). AI and machine learning (ML) technologies require advanced chips with greater processing power, which has led to a significant rise in demand for cutting-edge semiconductors. AI has been key in a variety of fields, from large-scale data processing to software development.
Following a challenging 2023, the semiconductor industry began to recover in 2024. During the first half of the year, global sales were up by 19.2% compared to Q1-2 in 2023. This is a hopeful sign that demand is not only recovering but accelerating, as key industries continue to invest heavily in semiconductor technologies.
Estimates from the World Semiconductor Trade Statistics indicate that global sales are expected to rise by 16% year on year, marking a strong year of growth following 2023’s decline.
Despite the industry’s volatility, the United States has remained a dominant presence with a 50.2% global market share. Its focus and investment in R&D, design and manufacturing has allowed it to maintain a leading position in the market and financially benefit from new technologies.
The demand for semiconductors is expected to continue its upward trajectory. From the automotive industry’s continuous advancements to the explosive growth in AI applications, the market is positioned for long-term growth. Semiconductor manufacturers around the globe are responding by making substantial investments, ensuring they have the capacity and technology to meet the ever-increasing demand.
With sales forecast to increase, it is a crucial time for businesses to future-proof their supply chains and establish strong relationships with reliable sourcing partners. Lantek Corporation’s scheduled ordering service could be key to your company’s supply chain stability in the coming years. Not only can you secure a competitive price, you can also secure a year’s supply of electronic components without taking up vital space in your facilities.
Contact us today to see what we can do for you. Email us at sales@lantekcorp.com or call us on 1-973-579-8100.
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