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Semiconductor set to fall by 4.2%, says IDC, but 5G will help recovery

May 13, 2020
report supply chain 5G smartphones

The overall semiconductor market is tipped to decline 4.2% as the global economy fights to recover from this unprecedented crisis in 2020, concludes the International Data Corporation (IDC) in their latest study. Excluding DRAM and flash markets, they say that semiconductors are expected to decline by 7.2% with “very uneven” demand across the different industry markets.

“The strength in demand in March and early April have made computing, connectivity, and memory products more resilient. However, the global shelter in place orders and ongoing shift in buying behavior toward essential goods and services will negatively impact consumer and business spending in the second quarter, and second half of the year,” said Mario Morales, program vice president, Semiconductors at IDC.

The report says that smartphones will continue to be the largest demand driver but will remain weak overall given the concentration in volumes being 4G as OEMS work down inventories. However, the IDC expects “5G volumes will grow this year despite the demand uncertainty, driving strong semiconductor content as OEMs position 5G in lower tiers to broaden the reach”.

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