Omdia: semiconductor market in decline

Source: Omdia

Q2 2022 marked the third consecutive quarter of weakening revenue growth for the semiconductor market with the market now in decline, reports Omdia.

According to the research house’s Competitive Landscape Tracker, revenue for Q2 2022 declined 1.9% from US$161.2 billion in Q1 to US$158.1 billion in Q2. This decline follows the longest sustained period of semiconductor growth of eight uninterrupted quarters.

The report notes that a major contributing factor is poor performance from Intel, and a decline of 13% in their microprocessors (MPU) business in Q1. This drop from a market that represents over 10% of the total semiconductor market has pulled the entire market down.

Another factor impacting the market is the strength of the dollar against many foreign currencies in Q2. Some non-US based companies experienced a quarterly revenue increase in local currency but a negative quarterly increase from a US dollar perspective, contributing to a downward influence on the total semiconductor market revenues in US dollars.

Underlining the market’s stagnation is the combined decline of US$3.7 billion from Intel and NVIDIA in Q2 as a result of consumer demand for their products and OEMs holding less inventory in these uncertain times. Qualcomm also saw revenue decline in Q2.

Cliff Leimbach, senior research analyst at Omdia said: “The recent decline in semiconductor revenue has led to 2Q22 being recorded as the third-worst performing Q2 in twenty years of Omdia tracking the market. Changes are coming after an unprecedented run of demand growth from work-from-home and educate-from-home activity. Given the cyclical nature of the semiconductor market, we expect the remainder of 2022 and potentially the first half of 2023 will be an adjustment period as the market returns to normalcy.”