Despite a slight decrease in monthly sales, global semiconductor sales in February still significantly exceeded the total sales of the same month last year.

Yesterday, the Semiconductor Industry Association (SIA) announced that the total global semiconductor industry sales in February 2024 amounted to $46.2 billion, a 16.3% increase compared to the total of $39.7 billion in February 2023, but a 3.1% decrease from the total of $47.6 billion in January 2024. The monthly sales figures are compiled by the World Semiconductor Trade Statistics (WSTS) organization and represent a three-month moving average. In terms of revenue, SIA accounts for 99% of the U.S. semiconductor industry and nearly two-thirds of non-U.S. chip companies.

John Neuffer, President and CEO of SIA, stated: "Although there was a slight decrease in monthly sales, global semiconductor sales in February were still significantly higher than the total sales of the same month last year, continuing the strong year-over-year growth that the market has experienced since the middle of last year. The year-over-year increase in sales in February is the largest percentage since May 2022, and the market growth is expected to continue for the rest of the year."

Regionally, year-over-year sales increased in China (28.8%), the Americas (22.0%), and Asia Pacific/All Other Regions (15.4%), but decreased in Europe (-3.4%) and Japan (-8.5%). Monthly sales declined in all markets: Asia Pacific/All Other Regions (-1.3%), Europe (-2.3%), Japan (-2.5%), the Americas (-3.9%), and China (-4.3%).

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The global semiconductor industry experienced a full year of "low operation" in 2023, with high inventory, low demand, reduced investment, and production capacity cuts continuously rotating through various segments. Fortunately, since the fourth quarter of 2023, there seems to be a glimmer of hope for the start of a new cycle of prosperity. Facing 2024, global analysis institutions unanimously predict an increase compared to the previous year, with the most optimistic being a growth of over 20%, and the average growth rate forecast also exceeds a double-digit percentage.

However, it must be acknowledged that, influenced by factors such as weak purchasing power demand and inflation, the global semiconductor industry is not expected to "quickly rebound" in the short to medium term. It is likely that 2024 will show a trend of "overall steady recovery with structural differentiation and adjustment in specific fields."

Below is IDC's analysis and forecast of the development trends of the global semiconductor industry in 2024.The Global Semiconductor Market in 2024 Will Show Eight Major Development Trends

The latest research from market research institution IDC indicates that with the explosive growth in global demand for artificial intelligence and high-performance computing (HPC), as well as the recovery in demand from markets such as smartphones, personal computers, servers, and automobiles, the semiconductor industry is set to usher in a new wave of growth. The institution predicts that the semiconductor market will exhibit eight major development trends in 2024.

The semiconductor market will rebound in 2024. The reduction in memory production in 2024 will drive product price increases, and the penetration rate of high-priced, high-bandwidth memory (HBM) will also increase, both of which will become drivers of market growth. As the terminal market gradually recovers, AI chips will be in short supply, and it is expected that the semiconductor market sales will show a growth trend in 2024, with an annual growth rate of 20%.

Advanced Driver Assistance Systems (ADAS) and automotive infotainment systems drive the development of the automotive semiconductor market. Although the growth rate of the overall vehicle market is limited, the trend towards intelligent and electric vehicles is evident, which injects momentum into the semiconductor market. It is expected that the compound annual growth rate of ADAS will reach 19.8% by 2027, accounting for 30% of the automotive semiconductor market that year. Driven by the intelligence and connectivity of vehicles, the compound annual growth rate of this segment is expected to reach 14.6% by 2027, accounting for 20%. More and more automotive systems will rely on chips, leading to a stable increase in demand for semiconductors.

The application of semiconductor AI expands to personal terminals. With the advancement of semiconductor technology, it is expected that more AI functions will be integrated into personal terminals by 2024, leading to the rise of AI smartphones, AI personal computers, and AI wearable devices. Personal terminals will have more innovative applications after the introduction of AI, further increasing the demand for semiconductors.

The "de-stocking" of IC design will gradually come to an end. IC design products in the Asia-Pacific region are widely diverse and have applications across the globe. Although the market performance in 2023 was relatively flat due to the lengthy "de-stocking" process, the industry still showed resilience under the influence of multiple pressures, actively exploring innovative and breakthrough paths. In addition to continuing to delve into the smartphone field, companies are also entering the AI and automotive application tracks to adapt to the rapidly changing market environment. With the gradual recovery of the global personal terminal market, this segment will have new growth opportunities, with an expected market growth rate of 14% in 2024.

Demand for advanced processes in wafer foundries will grow rapidly. The wafer foundry industry was affected by market inventory adjustments, with a significant decline in capacity utilization in 2023, especially for mature processes above 28nm. However, influenced by the recovery of some consumer electronics demand and the surge in AI demand, 12-inch wafer fabs have gradually recovered in the second half of 2023. With the accelerated development of leading enterprises and the gradual recovery of terminal demand, this segment is expected to achieve double-digit growth in 2024.

Price competition in mature processes will intensify. From the second half of 2023 to the first half of 2024, there will be a short-term "de-stocking" demand for industrial control and automotive chips, which are mainly produced in large quantities using mature processes. This will give wafer fabs with mature processes the bargaining power again.

The 2.5/3D packaging market will see explosive growth. As semiconductor chip performance continues to improve, advanced packaging technology becomes increasingly important. Advanced packaging and advanced process technologies complement each other, continuously pushing the industry to break through the limits of Moore's Law, leading to a qualitative improvement in the semiconductor industry and thus promoting rapid market growth. It is expected that from 2023 to 2028, the compound annual growth rate of the 2.5/3D packaging market will reach 22%, which is a direction that the semiconductor packaging and testing field needs to focus on closely.Wafer-level packaging (CoWoS) supply chain capacity expansion drives ample AI chip supply. The AI wave has driven a surge in server demand, with advanced packaging technology CoWoS playing a significant role. Currently, there is still a 20% gap in CoWoS supply and demand. By the second half of 2024, CoWoS capacity is expected to increase by 130%, with more manufacturers actively engaging in the CoWoS supply chain. These factors will contribute to a more abundant supply of AI chips in 2024, becoming an important driving force for the development of AI chips.

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