Semiconductors on the Rise: IDC Forecasts a Resilient 20% Growth in 2024, Fueled by AI and Automotive Innovation

In a pivotal turn of events, the global semiconductor market is set to stage a robust comeback in 2024, with analysts from the renowned global market intelligence firm IDC predicting an impressive annual growth rate of 20%. Despite facing challenges, the semiconductor industry is gearing up for a transformative year, driven by escalating demand for artificial intelligence (AI) and high-performance computing (HPC).

Galen Zeng, Senior Research Manager for Semiconductor Research at IDC Asia/Pacific, highlighted that the strict control of supply and output by memory manufacturers has triggered price increases since November. The surge in demand for AI applications across various sectors is expected to be a key driver in revitalizing the semiconductor sales market in 2024. Zeng confidently asserted, “The semiconductor supply chain, encompassing design, manufacturing, packaging, and testing, will bid farewell to the downturn in 2023.”

IDC forecasts eight pivotal trends for the semiconductor market in 2024, laying the foundation for a promising recovery:

1. Semiconductor Sales Market to Bounce Back: Anticipating a revival, IDC projects the semiconductor sales market to surge with a remarkable 20% annual growth rate in 2024.
2. ADAS & Infotainment Fuel Automotive Semiconductor Growth: The automotive semiconductor market is set to thrive, with Advanced Driver Assistance Systems (ADAS) and infotainment driving the industry forward.
3. Semiconductor AI Applications Expand: Artificial Intelligence is set to become more integrated into personal devices, such as smartphones, PCs, and wearables, fostering innovation and stimulating semiconductor demand.
4. IC Design Growth in Asia-Pacific: Despite a sluggish 2023, IC design companies in the Asia-Pacific region are expected to rebound, with a projected 14% annual growth in 2024.
5. Foundry Industry Sees Demand Rebound: The foundry industry, impacted by weak demand in 2023, is expected to recover in 2024, fueled by increased demand for consumer electronics and AI.
6. China’s Production Capacity Expansion: China’s active expansion in production capacity, coupled with intensified price competition, poses challenges to non-Chinese foundries.
7. 2.5/3D Packaging Market Surges: Advanced packaging technologies, crucial for meeting evolving chip requirements, are set to grow at a CAGR of 22% from 2023 to 2028.
8. CoWoS Supply Chain Expansion Boosts AI Chip Supply: The CoWoS packaging technology, vital for AI chips, is expected to witness a 130% capacity increase by the second half of 2024, strengthening the AI chip supply chain.

The semiconductor industry is primed for a dynamic 2024, with technological advancements, increased demand, and strategic collaborations paving the way for a substantial recovery and growth.