Gartner Predicts Semiconductor Revenue Will Fall 0.9% in 2020

Global research firm Gartner released its latest numbers on the global semiconductor market on Thursday, pointing to an expected decline of 0.9 percent throughout 2020 compared to 2019. Although that figure isn't huge, Gartner does expect bigger changes within individual markets. 

“Non-memory semiconductor markets will experience a significant reduction in smartphone, automobile and consumer electronics production and be heavily impacted across the board,” said Richard Gordon, research practice VP at Gartner. “In contrast, the hyperscale data center and communications infrastructure sectors will prove more resilient with continued strategic investment required to support increased remote working and online access.”

The total memory market, including NAND and DRAM, are expected to grow by 13.9% over 2020, with the total market expected to reach $124.7 billion.

NAND markets specifically are expected to grow by up to 40% throughout 2020, as supplies have run dry in 2019 and aren't rapidly replenished, pushing up pricing and thus revenue. 

Not long ago, NAND and DRAM prices were at an all-time low, and it was already expected that these would bounce back up this year. The COVID-19 outbreak is pushing pricing up further.

Previously, Gartner's forecast for 2020 predicted revenue growth of 12.5% in the entire semiconductor industry, recovering from 2019's 12% drop. Despite the growth in the memory market, the non-memory revenue is expected to drop by 6.1%, and given that the non-memory market is twice the size of the memory industry, offsets the growth into negative territory.

“The wide spread of COVID-19 across the world and the resulting strong actions by governments to contain the spread will have a far more severe impact on demand than initially predicted,” said Gordon. “This year’s forecast could have been worse, but growth in memory could prevent a steep decline.”

Looking at the global market, these changes in the forecasts make sense given the current state of the world. Now that we all need to stay home as much as possible for what looks like quite some time to come, the product landscape is changing big time.

For consumers, this means that if you're in need of an SSD or RAM, now might be a better time to make a purchase than a few months from now.