Research finds weak demand leads to declining quarter for semiconductor market – Omdia

In the first quarter of 2024, the semiconductor market experienced approximately 2% decline falling to $151.5bn according to Omdia's new Competitive Landscaping Tool. Typically, the first quarter of the year sees a downturn with the market dropping 4.4% by revenue following a strong fourth quarter being driven by seasonal demand. Most segments within the semiconductor market faced declines this quarter. The consumer segment was hit the hardest dropping 10.4% from 4Q23 while the industrial segment dropped 8.5% due to inventory adjustments. Even the automotive segment, which has seen steady growth for years, turned negative with a 5.1% decline in 1Q24.

The drops in these segments were offset by quarterly growth in the data processing division, which increased 3.7%, driven by a continuous high demand for NVIDIA's chips and other AI-related products.

NVIDIA maintains its robust growth trajectory expanding its market share by more than two percentage points now representing 14.5% of the total semiconductor market revenue. Despite overtaking the traditional semiconductor leaders, Samsung and Intel who collectively hold 18.6% of the semiconductor market revenue, NVIDIA continues to gain ground. Additionally, with the resurgence of memory growth, SK Hynix and Micron rose in their market share rankings.

The automotive sector which initially resisted the industry-wide semiconductor market growth triggered by the COVID-19 pandemic, eventually succumbed to decline but quickly recovered. After 13 consecutive quarters of revenue growth, starting in 3Q20, the automotive segment experienced a slight downturn of 0.6% in 4Q23. However, the decline deepened in further in 1Q24 with a more substantial drop of 5.1% from the previous quarter. This downward trend reflects a broader deceleration in the demand for cars. The growth rate of EVs has tapered off in recent quarters, prompting a recalibration in semiconductor demand. Despite these challenges, the auto semiconductor market remains a promising long-term growth area, poised to climb over the next five years.

Read the full press release here.

Omdia