WSTS Forecasts Semi Revenue Increase of 13.1% In 2024. Seriously?

forecast assumes a ~45% YoY increase in memory revenue. Seems optimistic to us...

WSTS Semiconductor Market Forecast Fall 2023

The World Semiconductor Trade Statistics (WSTS) published its latest forecast for the semiconductor market on November 28 last, details here. According to the report, the WSTS is now forecasting a 9.4% YoY decline in global semi sales for 2023, followed by a recovery of 13.1% YoY in 2024.

WSTS has revised its forecast, anticipating a single-digit contraction in the global semiconductor market of 9.4 percent in 2023. However, this is anticipated to be followed by a robust recovery, with an estimated growth of 13.1 percent in 2024.

The 9.4% decline forecast for 2023 is somewhat of a no-brainer and is pretty much in line with what we have been predicting since Q123. However, the 13.1% growth forecast for 2024 is something of a head scratcher. Here’s the justification given by the WSTS for this prediction:

The outlook for 2024 points to a vigorous upswing in the worldwide semiconductor market, with projections indicating a 13.1 percent increase, reaching a valuation of US$588 billion. This growth is expected to be largely fuelled by the Memory sector, which is on track to soar to around US$130 billion in 2024, representing an upward trend of over 40 percent from the previous year. The majority of other principal segments, including Discrete, Sensors, Analog, Logic, and Micro, are also expected to record single-digit growth rates.

The forecasted $588 billion in semi revenues for 2024 would handily beat the previous record of $574 billion set in 2022. It is predicated on a memory rebound to its 2022 level of $129 billion. For the record, we have 2022 memory revenues $11 billion higher at $140 billion.

While such a prediction will be welcome news for the beleaguered memory segment, it needs to be taken with a healthy does of scepticism for at least three key reasons, the WSTS track record, historical patterns for recovery years and what we learned from Micron last week. Let’s dig in….