Global Semiconductor Market Expected to Decline by 5% in 2023, Asia-Pacific Region Most Affected

The Economic Daily News from Taiwan cited a report from ANLian Trading on the 7th of March, stating that the global semiconductor market is expected to decline by approximately 5% this year, with 80% of the consumer electronics, computer, and communication industries experiencing a downturn. The report indicates that only when inventories from retailers to consumer electronics companies to semiconductor design and production are all depleted, can the demand for semiconductors have a chance to rebound.

The report also mentioned that Chinese consumers may drive a faster recovery in the semiconductor market. However, at present, the growth in demand for semiconductors in mainland China is still not sufficient to increase the overall shipment volume in 2023.

As a result, the Asia-Pacific region, which accounts for 75% of global semiconductor manufacturing capacity and 90% of semiconductor situations, will be most disadvantaged. The report analyzes the semiconductor trade surplus and export ratio in major chip export markets in Asia. South Korea is hit the hardest because of its relatively high dependence on memory chips.

Electronic components distributors should take note of the expected decline in the global semiconductor market and prepare for potential inventory depletion before the market has a chance to recover. While China may offer some hope for a faster recovery, the overall demand for semiconductors is not yet strong enough to drive significant growth. Distributors in the Asia-Pacific region should be especially cautious as they face the most significant challenges due to the region's dominance in semiconductor manufacturing.