Global semiconductor industry sales are forecasted to hit US$602 billion (RM2.67 trillion) in 2024, said US-based Semiconductor Industry Association (SIA).
Global semiconductor sales data showed the industry experienced significant ups and downs in 2022.
SIA in its 2023 SIA Factbook released last Friday (May 5) said that while chip sales reached the highest-ever annual total in 2022, the slowdown in the second half of the year substantially limited growth.
It said global semiconductor sales reached US$574 billion in 2022, and US semiconductor companies accounted for sales totalling US$275 billion, or 48% of the global market.
The report added that to remain competitive in the industry, US semiconductor firms also invested US$58.8 billion in research and development (R&D), the highest in history.
Capital and R&D investment critical
SIA said firms must continually invest a significant share of revenue in both R&D and new plants and equipment.
It said the pace of technological change in the industry requires that companies develop more complex designs and process technologies, as well as introduce production machinery capable of manufacturing components with smaller feature sizes.
The ability to design and produce state-of-the-art semiconductor components can only be maintained through a continual commitment to keeping pace with industry-wide investment rates of roughly 30% of sales.
The need to stay at the leading edge of technology has resulted in some extreme fluctuations in years such as 2001 and 2002, when sales declined precipitously while expenditures on R&D and capital equipment did not decline at the same rate, said SIA.
Global sales
SIA said worldwide semiconductor sales increased from US$139 billion in 2001 to US$574 billion in 2022, a compound annual growth rate of 6.67% per year.
According to the World Semiconductor Trade Statistics (WSTS) Fall 2022 Semiconductor Industry Forecast, worldwide semiconductor industry sales are forecasted to decrease to US$556 billion in 2023 and increase to US$602 billion in 2024.
SIA said the vast majority of semiconductor demand is driven by products ultimately purchased by consumers, such as laptops or smartphones. Increasingly, consumer demand is driven in emerging markets including those in Asia, Latin America, Eastern Europe, and Africa.
According to the report, in 2001, the Asia Pacific market surpassed all other regional markets in sales, as electronic equipment production shifted to the region.
It has multiplied in size since then, from US$39.8 billion to over US$330.94 billion in 2022.
By far, the largest country market in the Asia Pacific region is China, which accounted for 55% of the Asia Pacific market and 31% of the total global market.
This data reflects sales of semiconductors to electronic equipment makers only — final electronic products containing semiconductors are then shipped for consumption around the world, said SIA.
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