In the 2023 downward cycle, key words such as layoffs, cutting orders, and bankruptcy write-off run through the cloudy chip industry.
In 2024, which is full of imagination, what new changes, new trends and new opportunities will the semiconductor industry have?
1. The market will grow by 20%
Recently, the latest research of International Data Corporation (IDC) shows that the global semiconductor revenue in 2023 fell by 12.0% year-on-year, reaching $526.5 billion, but it is higher than the agency’s estimate of $519 billion in September. It is expected to grow 20.2% year-over-year to $633 billion in 2024, up from the previous forecast of $626 billion.
According to the agency’s forecast, the visibility of semiconductor growth will increase as the long-term inventory correction in the two largest market segments, PC and smartphone, fades, and inventory levels in automotive and industrial are expected to return to normal levels in the second half of 2024 as electrification continues to drive semiconductor content growth over the next decade.
It is worth noting that the market segments with a rebound trend or growth momentum in 2024 are smartphones, personal computers, servers, automobiles, and AI markets.
1.1 Smart Phone
After nearly three years of downturn, the smartphone market finally began to pick up momentum from the third quarter of 2023.
According to Counterpoint research data, after 27 consecutive months of year-on-year decline in global smartphone sales, the first sales volume (that is, retail sales) in October 2023 increased by 5% year-on-year.
Canalys forecasts full-year smartphone shipments will reach 1.13 billion units in 2023, and is expected to grow 4% to 1.17 billion units by 2024. The smartphone market is expected to reach 1.25 billion units shipped by 2027, with a compound annual growth rate (2023-2027) of 2.6%.
Sanyam Chaurasia, senior analyst at Canalys, said, “The rebound in smartphones in 2024 will be driven by emerging markets, where smartphones remain an integral part of connectivity, entertainment and productivity.” Chaurasia says one in three smartphones shipped in 2024 will be from the Asia-Pacific region, up from just one in five in 2017. Driven by resurgent demand in India, Southeast Asia and South Asia, the region will also be one of the fastest growing at 6 per cent a year.
It is worth mentioning that the current smart phone industry chain is highly mature, the stock competition is fierce, and at the same time, scientific and technological innovation, industrial upgrading, talent training and other aspects are pulling the smart phone industry to highlight its social value.
1.2 Personal Computers
According to the latest forecast of TrendForce Consulting, global notebook shipments will reach 167 million units in 2023, down 10.2% year-on-year. However, as the inventory pressure eases, the global market is expected to return to a healthy supply and demand cycle in 2024, and the overall shipment scale of the notebook market is expected to reach 172 million units in 2024, an annual increase of 3.2%. The main growth momentum comes from the replacement demand of the terminal business market, and the expansion of Chromebooks and e-sports laptops.
TrendForce also mentioned the state of AI PC development in the report. The agency believes that due to the high cost of upgrading the software and hardware related to AI PC, the initial development will focus on high-level business users and content creators. The emergence of AI PCS will not necessarily stimulate additional PC purchase demand, most of which will naturally shift to AI PC devices along with the business replacement process in 2024.
For the consumer side, the current PC device can provide cloud AI applications to meet the needs of daily life, entertainment, if there is no AI killer application in the short term, put forward a sense of upgrading AI experience, it will be difficult to quickly increase the popularity of consumer AI PC. However, in the long run, after the application possibility of more diversified AI tools is developed in the future, and the price threshold is lowered, the penetration rate of consumer AI PCS can still be expected.
1.3 Servers and Data Centers
According to Trendforce estimates, AI servers (including GPU, FPGA, ASIC, etc.) will ship more than 1.2 million units in 2023, with an annual increase of 37.7%, accounting for 9% of the overall server shipments, and will grow more than 38% in 2024, and AI servers will account for more than 12%.
With applications such as chatbots and generative artificial intelligence, major cloud solution providers have increased their investment in artificial intelligence, driving the demand for AI servers.
From 2023 to 2024, the demand for AI servers is mainly driven by the active investment of cloud solution providers, and after 2024, it will be extended to more application fields where companies invest in professional AI models and software service development, driving the growth of edge AI servers equipped with low – and medium-order Gpus. It is expected that the average annual growth rate of edge AI server shipments will be more than 20% from 2023 to 2026.
1.4 New energy vehicles
With the continuous advancement of the new four modernization trend, the demand for chips in the automotive industry is increasing.
From basic power system control to advanced driver assistance systems (ADAS), driverless technology and automotive entertainment systems, there is a great reliance on electronic chips. According to the data provided by the China Association of Automobile Manufacturers, the number of car chips required for traditional fuel vehicles is 600-700, the number of car chips required for electric vehicles will increase to 1600 / vehicle, and the demand for chips for more advanced intelligent vehicles is expected to increase to 3000 / vehicle.
Relevant data show that in 2022, the global automotive chip market size is about 310 billion yuan. In the Chinese market, where the new energy trend is strongest, China’s vehicle sales reached 4.58 trillion yuan, and China’s automotive chip market reached 121.9 billion yuan. China’s total auto sales are expected to reach 31 million units in 2024, up 3% from a year earlier, according to the CAAM. Among them, passenger car sales were about 26.8 million units, an increase of 3.1 percent. Sales of new energy vehicles will reach about 11.5 million units, an increase of 20% year-on-year.
In addition, the intelligent penetration rate of new energy vehicles is also increasing. In the product concept of 2024, the ability of intelligence will be an important direction emphasized by most new products.
This also means that the demand for chips in the automotive market next year is still large.
2. Industrial technology trends
2.1 AI Chip
AI has been around throughout 2023, and it will remain an important keyword in 2024.
The market for chips used to perform artificial intelligence (AI) workloads is growing at a rate of more than 20% per year. The AI chip market size will reach $53.4 billion in 2023, an increase of 20.9% over 2022, and will grow 25.6% in 2024 to reach $67.1 billion. By 2027, AI chip revenue is expected to more than double the 2023 market size, reaching $119.4 billion.
Gartner analysts point out that the future mass deployment of custom AI chips will replace the current dominant chip architecture (discrete Gpus) to accommodate a variety of AI-based workloads, especially those based on generative AI technology.
2.2 2.5/3D Advanced Packaging market
In recent years, with the evolution of chip manufacturing process, the iteration progress of “Moore’s Law” has slowed down, resulting in a sharp rise in the marginal cost of chip performance growth. While Moore’s Law has slowed, demand for computing has skyrocketed. With the rapid development of emerging fields such as cloud computing, big data, artificial intelligence, and autonomous driving, the efficiency requirements of computing power chips are getting higher and higher.
Under multiple challenges and trends, the semiconductor industry has begun to explore a new development path. Among them, advanced packaging has become an important track, which plays an important role in improving chip integration, reducing chip distance, speeding up the electrical connection between chips, and optimizing performance.
2.5D itself is a dimension that does not exist in the objective world, because its integrated density exceeds 2D, but it cannot reach the integrated density of 3D, so it is called 2.5D. In the field of advanced packaging, 2.5D refers to the integration of the intermediary layer, which is currently mostly made of silicon materials, taking advantage of its mature process and high-density interconnection characteristics.
3D packaging technology and 2.5D is different from the high-density interconnection through the intermediary layer, 3D means that no intermediary layer is required, and the chip is directly interconnected through TSV (through-silicon technology).
International Data Corporation IDC forecasts that the 2.5/3D packaging market is expected to reach a compound annual growth rate (CAGR) of 22% from 2023 to 2028, which is an area of great concern in the semiconductor packaging test market in the future.
2.3 HBM
An H100 chip, H100 nude occupies the core position, there are three HBM stacks on each side, and the six HBM add up area is equivalent to the H100 nude. These six ordinary memory chips are one of the “culprits” of the shortage of H100 supply.
HBM assumes part of the memory role in the GPU. Unlike traditional DDR memory, HBM essentially stacks multiple DRAM memory in a vertical direction, which not only increases the memory capacity, but also controls the memory power consumption and chip area well, reducing the space occupied inside the package. In addition, HBM achieves higher bandwidth on the basis of traditional DDR memory by significantly increasing the number of pins to reach a memory bus of 1024 bits wide per HBM stack.
AI training has high requirements for the pursuit of data throughput and data transmission latency, so HBM is also in great demand.
In 2020, ultra-bandwidth solutions represented by high-bandwidth memory (HBM, HBM2, HBM2E, HBM3) began to gradually emerge. After entering 2023, the crazy expansion of the generative artificial intelligence market represented by ChatGPT has increased the demand for AI servers rapidly, but also led to an increase in the sales of high-end products such as HBM3.
Omdia research shows that from 2023 to 2027, the annual growth rate of HBM market revenue is expected to soar by 52%, and its share of DRAM market revenue is expected to increase from 10% in 2023 to nearly 20% in 2027. Moreover, the price of HBM3 is about five to six times that of standard DRAM chips.
2.4 Satellite Communication
For ordinary users, this function is optional, but for people who love extreme sports, or work in harsh conditions such as deserts, this technology will be very practical, and even “life-saving”. Satellite communications is becoming the next battleground targeted by mobile phone manufacturers.
Post time: Jan-02-2024