Robust Semiconductor Market in 2024

The global semiconductor market reached $149.9 billion in the second quarter of 2024, according to WSTS. 2Q 2024 was up 6.5% from 1Q 2024 and up 18.3% from a year ago. WSTS revised 1Q 2024 up by $3 billion, making 1Q 2024 up 17.8% from a year ago instead of the previous 15.3%.

The major semiconductor companies posted generally strong 2Q 2024 revenue gains versus 1Q 2024. Of the top fifteen companies, only two – MediaTek and STMicroelectronics – saw revenue declines in 2Q 2024. The strongest growth was from the memory companies, with SK Hynix and Kioxia each up over 30%, Samsung Semiconductor up 23% and Micron Technology up 17%. The weighted average growth of the top fifteen companies in 2Q 2024 versus 1Q 2024 was 8%, with the memory companies up 22% and the non-memory companies up 3%.

Nvidia remained the largest semiconductor company, based on its 1Q 2024 guidance of $28 billion in 2Q 2024 revenue. Samsung was number two at $20.7 billion. Broadcom has not yet reported its 2Q 2024 results, but we estimate revenues at $13.0 billion, passing Intel at $12.8 billion. Intel slipped to fourth, after many years of being number one or number two.

Revenue guidance for 3Q 2024 versus 2Q 2024 is positive, but with a wide range of outlooks. AMD expects 3Q 2024 revenue to increase 15% based on strong growth in data center and client computing. Micron indicated the memory boom will continue, with supply below demand, and guided for 12% growth. Samsung Semiconductor and SK Hynix did not provide revenue guidance, but both companies expect continuing strong demand from server AI.

A few companies project low 3Q 2024 revenue growth of about 1%: Intel, MediaTek and STMicroelectronics. Intel blamed excess inventory for the weak outlook. The other five companies providing revenue guidance are in the 4% to 8% range. STMicroelectronics and NXP Semiconductors expect automotive to improve in 3Q 2024, but inventory issues remain in the industrial sector. Texas Instruments projects strength in personal electronics. The 3Q 2024 weighted average revenue growth of the nine non-memory companies providing guidance was 5%.

The substantial increase in the semiconductor market in the first half of 2024 (up 18% from the first half of 2023) will drive robust growth for the full year 2024. 2024 forecasts from the last few months range from 14.4% from the Cowan LRA Model to 20.7% from Statista Market Insights. Our Semiconductor Intelligence (SC-IQ) projection of a 17.0% increase in 2024 is in line with Gartner at 17.4% and WSTS at 16.0%.

The four estimates for 2025 show similar trends – slower but still strong growth ranging from our Semiconductor Intelligence’s 11.0% to Statista’s 15.6%. The growth deceleration from 2024 to 2025 ranges from minus 3.5 percentage points from WSTS (16% to 12.5%) to our minus 6 percentage points (17% to 11%). Our initial projections for 2026 are in the mid-single digits. The momentum from AI and a recovering memory market should taper off by then. The other major end markets (smartphones, PCs and automotive) will probably see flat to low growth in the next couple of years. Barring any significant new growth drivers to boost the market or an economic downturn to depress the market, the outlook for the semiconductor market should remain in the mid-single digits through the end of the decade.

Semiconductor Intelligence is a consulting firm providing market analysis, market insights and company analysis for anyone involved in the semiconductor industry – manufacturers, designers, foundries, suppliers, users or investors. Please contact me if you would like further information.

Bill Jewell
Semiconductor Intelligence, LLC
billjewell@sc-iq.com