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2024 set to be a ‘bounce-back year’ for semiconductor revenues

Gartner estimates worldwide semiconductor revenue will grow 16.8% in 2024 after a forecasted decline of 10.9% this year.

Andrew Wooden

December 4, 2023

2 Min Read

The analyst predicts that the industry will rake in $624 Billion in 2024, compared to $534 billion this year.

Revenue for all chip types will grow, but the effect will apparently be particularly pronounced in the memory market, which is forecasted to record a 38.8% decline in 2023 and a growth of 66.3% next year.

‘Anaemic demand’ and declining pricing due to ‘massive oversupply’ will lead NAND flash revenue to decline 38.8% this year, but over the next 3 to 6 months, pricing will ‘hit bottom’ and conditions will improve for vendors, claims Gartner.

Meanwhile an oversupply in the DRAM market’s is expected to continue which will trigger a pricing rebound, the full effect of which will hit in 2024, when revenue is expected to increase 88% to total $87.4 billion.

“We are at the end of 2023 and strong demand for chips to support artificial intelligence (AI) workloads, such as graphics processing units (GPUs), is not going to be enough to save the semiconductor industry from double-digit decline in 2023,” said Alan Priestley, VP Analyst at Gartner. “Reduced demand from smartphones and PC customers coupled with weakness in data centre/hyperscaler spending are influencing the decline in revenue this year.”

The much reported surge in generative AI is credited as driving demand for deployment of high-performance GPU-based servers and accelerator cards in data centres. Gartner analysts estimate that by 2027, the integration of AI techniques into data centre applications will result in more than 20% of new servers including workload accelerators.

For the telecoms industry’s part, there has certainly been a ramping up of AI projects announced of late. Last month, Ericsson announced it is working with Concordia University, University of Manitoba and the University of Waterloo in Canada to build ‘cyber resilient and secure’ 5G networks using automation and AI.

BT meanwhile recently announced it is piloting an AI powered Patient Concierge service for the NHS, designed to streamline patient communication, cutting the amount of time spent arranging appointments for diagnosis and treatment. 

And also in November, Deutsche Telekom and its US arm T-Mobile US launched a scheme to give out cash prizes to anyone with any novel ideas about how AI can improve telecoms.

About the Author(s)

Andrew Wooden

Andrew joins Telecoms.com on the back of an extensive career in tech journalism and content strategy.

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