Semiconductor Revenue Will Decline in 2020 Due to Coronavirus Impact

Due to the impact of the coronavirus on semiconductor supply and demand, worldwide semiconductor revenue is forecast to decline 0.9% in 2020, according to Gartner. This is down from the previous quarter’s forecast of 12.5% growth.

“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 Richard Gordon, research practice vice president at Gartner. “This year’s forecast could have been worse, but growth in memory could prevent a steep decline.“

Overall, 2020 global semiconductor revenue has been reduced from the previous quarter’s forecast by $55 billion, to $415.4 billion. 2020 total market growth has been reduced from 12.5% to a decline of 0.9%, with nonmemory expected to decline 6.1%, while memory is forecast to grow 13.9%.

Semiconductor memory revenue will account for 30% of the total worldwide semiconductor market in 2020. The memory market is forecast to reach $124.7 billion in 2020, an increase of 13.9%, while the nonmemory revenue market is on pace to total $290.6 billion, a decline of 6.1% year over year.

Within memory, NAND flash revenue is forecast to grow 40% in 2020 due to severe shortages persisting from 2019, which keeps pricing firm. Strong demand from cloud service providers in the first half of 2020 will push pricing and revenue higher in server DRAM. However, this growth will be more than offset by weak demand and falling prices from the smartphone market. For the DRAM market overall, Gartner analysts estimate DRAM revenue will decline 2.4% in 2020.