As the impact of digital on lives and businesses has accelerated, semiconductor markets have boomed, with sales growing by more than 20 percent to about $600 billion in 2021. McKinsey analysis based on a range of macroeconomic assumptions suggests the industry’s aggregate annual growth could average from 6 to 8 percent a year up to 2030.

The infamously cyclical semiconductor industry had a challenging year in 2023, the seventh downturn since 1990, with sales expected to be down 9.4% (to US$520 billion) for the year.1 But that’s not as bad as was expected in the spring; before relatively stronger second and third quarters were in the books, the previous forecast had been for US$515 billion.2 2024 is now predicted to see global sales of US$588 billion.3 Not only would that be 13% better than 2023, but it’s 2.5% higher than 2022’s record industry revenues of US$574 billion.

The semiconductor industry continues to experience twists and turns along the road to recovery. Inventory overhang and the uncertain market outlook has caused seesawing between low to high demand. As market research firms began to forecast a likely decline in memory demand, it surged again. Prices are rising as demand propels them forward.

Global semiconductor revenue is projected to grow 16.8% in 2024 to total $624 billion, according to the latest forecast from Gartner, Inc. In 2023, the market is forecast to decline 10.9% and reach $534 billion.