The integrated circuit (IC) market, which was led last year by Nvidia, Qualcomm and Broadcom, is "unlikely to return to growth in 2020" due to the "combined influence of the U.S. Entity List and the COVID-19 pandemic," TrendForce said today. This is despite the slight improvements some companies saw in the fourth quarter of 2019.
The research firm said the industry's revenues were down 4.4% year-over-year for 2019. It attributed much of that decline on Broadcom, Qualcomm and Nvidia because they all suffered from decreased revenues despite being market leaders.
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Broadcom and Qualcomm's revenues dropped after Huawei was added to the Entity List by the U.S. Department of Commerce, according to TrendForce, which means they're unlikely to see much improvement in 2020 unless export restrictions change.
TrendForce said that Nvidia's problems resulted from "excessive stock of gaming graphics cards in the first three quarters of 2019." Things improved in Q4 but not enough for Nvidia's year-over-year revenues to fully recover.
Here's what TrendForce said about COVID-19's potential effect on the industry:
"The COVID-19 pandemic is now a global threat, which will certainly affect the public's purchasing demand for consumer electronics. [...] Given that the pandemic has already exerted its influence over the IC design industry in 1H20, the overall industry is unlikely to recover in 2020."
That's in line with previous reports indicating that COVID-19 led to reduced demand for motherboards and graphics cards in China (opens in new tab) earlier this year, as well as a report today that coronavirus is hitting motherboard and GPU shipments (opens in new tab). Now that the virus has gone global, it wouldn't be surprising if we saw similar declines elsewhere.
Companies were essentially hit with the one-two punch of U.S. export restrictions and a global pandemic that can disrupt their supply chains and reduce demand for their products. Here's to hoping that 2021 will be a little bit easier to manage.