GamesBeat is thrilled to join forces with Lil Snack to bring customized games directly for you! As fellow gamers, we find this a fantastic way to connect and have fun with the GamesBeat content you already love. Dive into the games here.
In 2023, the chip industry had a tough year with sales dropping by 9.4% to $520 billion. However, Deloitte predicts a strong comeback with a 13% growth to $588 billion in 2024. The semiconductor market is known for its ups and downs, and making accurate predictions can be challenging. Nevertheless, Deloitte’s latest global semiconductor industry outlook suggests a bright future for 2024.
Several factors contribute to this positive forecast. Despite the struggles of 2023, the memory chip market is expected to bounce back, reaching sales levels similar to 2022. The stock market’s positive reaction, with the combined market cap of the top 10 chip companies reaching $3.4 trillion by mid-December 2023, serves as a promising sign.
Market areas like PCs and smartphones, which saw declines in 2023, are also anticipated to grow by 4% in 2024. This is vital for the semiconductor sector since communication and computer chip sales made up 56% of the total semiconductor sales in 2022.
Deloitte’s report also examines important indicators of industry health, such as inventories and fabrication plant utilization. High inventories, exceeding $60 billion this fall, pose a challenge for sales in early 2024. However, the overall trend appears positive. Yet, the need for higher utilization rates, expected to drop below 70% in Q4 2023, indicates that achieving profitability might take time.
The report highlights five critical points for the semiconductor industry in 2024:
1. Generative AI accelerator chips: Sales of these chips are expected to surpass $50 billion in 2024, contributing around 8.5% of total sales. However, the relatively low production volumes of these valuable chips may affect overall manufacturing capacity and utilization.
2. Smart manufacturing trends: Deloitte discusses the rise of smart manufacturing and the industry’s use of generative AI, showcasing the changing landscape of semiconductor production.
3. Global assembly and test capacity: The report stresses the need for increased global assembly and test capacity, which is essential for future growth.
4. IP security and cyberattacks: Intellectual property in the semiconductor sector is increasingly targeted by cyberattacks, posing potential risks to the industry.
5. Geopolitical implications: The report considers export controls on advanced manufacturing equipment and technologies, as well as advanced generative AI semiconductors, in light of the geopolitical environment.
While Deloitte acknowledges the positive direction for the semiconductor industry in 2024, it also highlights the importance of strategic planning amid geopolitical issues and potential cybersecurity threats.