2024 Chip Market Forecasted to Grow 16% by WSTS

In its Spring forecast, the World Semiconductor Trade Statistics (WSTS) has projected that the global chip market will reach a value of US$611.23 billion in 2024, reflecting a significant increase of 16.0 percent from the previous year. This forecast marks a notable uptick from the 11.8 percent growth predicted by WSTS in November. Following the robust 16-percent growth in 2024, WSTS anticipates a further expansion of 12.5 percent in 2025, pushing the market to an estimated annual worth of US$687.38 billion.

However, not all analysts share the same level of optimism regarding the chip market's growth trajectory. Malcolm Penn from the analysis firm Future Horizons recently revised his growth forecast downwards. Initially projecting a 16 percent growth rate for 2024, Penn adjusted his forecast to a more modest 4.9 percent. He expressed concerns about the current growth pattern, highlighting that the increase in average selling prices has not been matched by a corresponding rise in units shipped.

Despite the adjustments made by individual analysts, the overall outlook for the chip market in 2024 remains positive according to WSTS's Spring 2024 forecast summary. The organization foresees growth being primarily driven by stronger sales in the Americas and Asia-Pacific regions, while Europe and Japan are expected to experience comparatively weaker sales. This trend aligns with the narrative of a rebound in consumer electronics and enterprise computing, alongside a more cautious approach in industrial, automotive, and communications infrastructure sectors following supply chain adjustments.

One of the key factors contributing to the anticipated surge in consumer and enterprise demand is the prolonged replacement cycles for smartphones and personal computers, coupled with a robust appetite for AI technologies in both datacenter and edge computing environments. Looking specifically at 2024, WSTS predicts that logic and memory IC categories will spearhead growth with double-digit percentage increases, while other categories like discrete, optoelectronics, sensors, and analog Semiconductors are expected to see slight declines.

Regionally, the Americas and Asia Pacific are poised for substantial growth in 2024, with projected increases of 25.1 percent and 17.5 percent, respectively. In contrast, Europe is expected to show marginal growth of 0.5 percent, while Japan is forecasted to experience a slight decline of 1.1 percent. Moving into 2025, the momentum is expected to continue, with memory and logic sectors leading the way and all regions gearing up for further expansion.