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Global chip revenue reaches $602 bn last year

Worldwide semiconductor revenues grew just 1.1 percent during 2022, a far cry from a year ago when the annual increase was more than 25 percent, showing quite how bad chipmakers are having it at the moment.

The preliminary results from research outfit Gartner put the semiconductor industry revenue for 2022 at $601.7 billion, up from $595 billion during 2021. Memory was the worst-performing market segment, declining 10 percent against the previous year, and worse may be to come in 2023.

But last year started out quite well for many chipmakers as demand bounced back once economies started to emerge from the pandemic and some companies found that there were demands to increase production to meet component shortages.

“2022 began with many semiconductor devices in shortage resulting in extended lead times and increasing pricing which led to reduced electronic equipment production for many end markets. As a result, OEMs started hedging themselves from shortages by stockpiling chip inventory,” said Gartner VP Analyst Andrew Norwood.

Then inflation and high interest rates started to curb spending, and semiconductor companies began to see demand evaporating as many OEMs decided to use up their stockpiled inventories before buying in new supplies.

“By the second half of 2022, the global economy began to slow under the strain of high inflation, rising interest rates, higher energy costs and continued COVID-19 lockdowns in China, which impacted many global supply chains,” Norwood said.

According to Gartner, the largest companies appear to have come out best, with the combined revenue of the top 25 semiconductor vendors growing 2.8 percent in 2022 and accounting for 77.5 percent of the market.

The top spot was kept by Samsung Electronics, although its revenue actually declined by 10 percent to $65.585 billion from $73.197 billion in 2021. This was chiefly due to falls in memory and NAND flash sales, according to Gartner.

Intel remained in second spot with $58.373 billion in revenue, which reflected an even larger decline of 19.5 percent during 2022, owing to falling off in demand in the consumer PC market and strong competition in its core x86 processor businesses.

SK hynix was a distant third at $36.229 billion, but saw a much smaller decline of 2.6 percent last year, while Qualcomm took fourth position with 28.3 percent growth to 34.748 billion. Down in seventh place was AMD on $23.285 billion, but it saw the highest year-on-year growth at 42.9 percent. TheRegister

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