Semi: chip market slowly turns about in H2 2023

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The current global semiconductor manufacturing industry contraction is expected to moderate in the second quarter of 2023 and give way to a gradual recovery starting in the third quarter, according to Semi’s Semiconductor Manufacturing Monitor Report, prepared in partnership with market research firm Techinsights.

In the second quarter of 2023, industry indicators including IC sales and silicon shipments – taking into account seasonality – point to quarter-over-quarter improvements. However, elevated inventories continue to dampen silicon shipments and fab utilization rates remain significantly lower than last year’s levels. In addition, semiconductor equipment sales continue to decline in parallel with capital expenditure adjustments by major industry stakeholders.

“The current market downturn is compounded by soft consumer demand and elevated inventory levels and has led to a sharp decline in semiconductor fab utilization,” says Clark Tseng, senior director of market intelligence at Semi. “However, as the inventory correction comes to an end in mid-2023, a mild recovery is expected in the second half of the year driven by a pickup in demand for inventory and the holiday season.”

“Despite ongoing uncertainties and risks, we expect continuing production cuts and capex reductions, especially in the memory market, will start having a positive impact on market fundamentals in the latter part of the year, resulting in a more balanced market environment,” says Risto Puhakka, VP of market analysis at Techinsights.