Chip industry expected to grow in 2024 or exceed 2022 boom

The Semiconductor Manufacturing Monitor, authored by SEMI and TechInsights, is expected to forecast a 10% YoY increase in electronics sales in the third quarter of 2023. Meanwhile, the memory industry is expected to post double-digit growth for the first time since the market recession at the end of 2022. Analysts say electronics sales may grow even beyond their 2022 peak, and Clark Tseng, SEMI’s senior director of market intelligence, said, “Recent trends suggest that the worst is over for ICs. We expect semiconductor manufacturing to bottom out in the first quarter of 2024.”

In the U.S., the CHIPS Act has prompted chipmakers to move their operations to U.S. soil. TSMC is spending $40 billion to open two state-of-the-art chip factories in Arizona, but is currently facing a shortage of skilled workers. Meanwhile, countries like India and Japan are trying to expand their domestic chip industries to compete with the U.S., China, Taiwan and South Korea. Subsidies in both countries have attracted international investment and interest from major chipmakers. 

Strong demand for advanced chips for artificial intelligence applications leads the way as the semiconductor industry begins to recover. With Nvidia at the center of production, high-end GPUs and HBM3 DRAM chips are selling like hotcakes as companies and governments alike seek to expand their AI capabilities. Meanwhile, demand for traditional chips continues to grow. Their prominence in automotive and healthcare means that more of these chips are needed than ever before. 

Looking ahead, the chip industry is well-positioned to pursue an upward trajectory. With rapid technological advancements, the proliferation of connected devices, and a booming artificial intelligence sector, chips are needed in every corner of the global economy. Thanks to careful planning and patience during the current down cycle, chipmakers are poised to rise to the occasion and meet this demand in 2024.