As B2B technology marketers, it’s important that we stay up-to-date with the trends and outlook of technology markets. It’s always great to be able to share positive news, and so we were delighted to receive the opportunity from Future Horizons, to share an extract from its report on the state of the Semiconductor market:
Executive Overview
August’s WSTS Blue Book showed Q2-2023 sales rebounding strongly, up 4.2 percent vs. Q1, heralding the end of the downturn and welcome news for the beleaguered chip industry.
The really good news, however, was that the downturn bottomed one quarter earlier than previously anticipated. This pull-forward only added a modest US$11 billion to Q2’s US$ 244 billion sales but this was enough to swing Q2’s growth from minus 5.0 percent to plus 4.2 percent.
A small change in the numbers at the start of the year makes a huge difference to the quarterly growth rates and hence the final year-on-year number.
Market Detail
The market turnaround was driven by a dramatic change in the Asia/Pac region, with 5.4 percent month-on-month growth, followed by the US (plus 3.5 percent), Japan (plus 2.1 percent) and Europe (plus 1.8 percent).
On an annualised basis, Q2-2023 was down 17.3 percent vs. Q2-2023, with Asia/Pac down 22.6 percent, the US down 17.9 percent, Japan down 3.5 percent with Europe, the only region showing year-on-year growth, at plus 7.6 percent.
The near-term market outlook is starting to look a lot stronger, driven by the positive impact of the inventory burn, stronger than expected resilience in the global economy, especially in the USA, and a seemingly robust demand boost from the emerging AI market.
Forecast Summary
Looking ahead to the second half of the year, the overall industry consensus has now (mostly) acknowledged a likely double-digit decline for 2023 vs. the ‘positive growth’ positions predicted this time last Year.
Future Horizons stood alone in the crowd when we first published our 2023 double-digit decline forecast 15 months ago in May 2022, likewise too when we stood by that number at our January 2023 Industry Update Webinar when all others, bar one, were predicted a very mild downturn followed by a sharp V-shaped rebound in 2024.
The stronger than expected second-quarter results will now push our 2023 forecast beyond the bull end of our January 2023 forecast scenario, but our longer-term concerns, re the still ongoing uncertain economic outlook and the excess CapEx spending, show no signs yet of abatement.
Over-capacity is the industry’s number one enemy, depressing ASPs and condemning the industry to low dollar value growth. An economic slowdown will nip any recovery in the bud.
As one of the most respected semiconductor industry analysts across the globe, Future Horizons report provides some fantastic detail on what’s currently happening in the semiconductor market. Future Horizons will be hosting a webinar on Tuesday 12th September at 3pm BST, covering the full report, with an update to their outlook for 2023-2024. Registration for the webinar is currently open, and be accessed here.
For any further details, please reach out to the Future Horizons team.
