According to new research from Omdia, the semiconductor market's revenue declined for the fifth consecutive quarter in the first quarter of 2023. This is the longest recorded decline since 2002, when Omdia began monitoring the market.
The revenue for the first quarter of 2023 was US$120.5 billion, a decline of 9% compared to the previous quarter. This prolonged decline follows the upswing that resulted in record quarterly revenues between the fourth quarter of 2020 and fourth-quarter 2021 due to the global pandemic, according to Omdia.
The memory and MPU markets are major contributors to the decline in the semiconductor market in the first quarter of 2023, Omdia indicated. The MPU market came to US$13.1 billion, or 65% of its total size in the first quarter of 2022. The memory market performed poorly in the first quarter of 2023 with sales of US$19.3 billion, or 44% of its size the previous year. The MPU and memory markets collectively declined 19% in the first quarter of 2023, contributing to the 9% quarterly decline of the overall semiconductor market, Omdia said.
"The semiconductor market is plagued by a lack of demand that has continued for multiple quarters and resulted in declining ASPs for many components," said Cliff Leimbach, senior analyst for Omdia. "However, there is demand thanks to generative AI. Nvidia has seen strong revenue growth as they lead in this space, reversing the performance of most semiconductor companies to begin 2023, but other semiconductor companies have yet to take advantage of this space in a similar way."
In addition, the decline of the memory market over the last three quarters has rearranged the market share rankings, according to Omdia. One year ago, three of the top five semiconductor companies by revenue were memory companies Samsung, SK Hynix and Micron Technology. Only Samsung is still in the top ten. The last time both SK Hynix and Micron were not ranked in the top ten was in 2008, highlighting the difficulties encountered by memory-focused semiconductor makers.
