"Global Semiconductor Market Facing Shortage Crisis, Possibility of Oversupply in 2023"

[Asia Economy Reporter Jeong Hyunjin] The global semiconductor market, which has been experiencing a shortage, is expected to face an oversupply situation in 2023.

On the 20th, market research firm IDC forecasted that the semiconductor market, which grew by 10.8% last year, will expand by 17.3% this year. IDC predicted that the semiconductor industry will normalize and find balance around mid-next year, and with a significant increase in production capacity by the end of next year, supply could exceed demand in 2023.

IDC analyzed that the current characteristics of the semiconductor market include a strong global recovery, rising prices of memory semiconductors such as DRAM and NAND flash, a robust 5G mobile replacement cycle, and a rebound in the high-performance computer and PC markets.

(Source: IDC)

The recent expansion of the semiconductor market size is due to increased demand for memory semiconductors driven by mobile devices, laptops, servers, automobiles, smart homes, gaming, and wearable devices, and IDC expects the IC shortage situation to somewhat ease by rapidly expanding production capacity through the fourth quarter of this year.

Since the second half of last year, semiconductor demand has increased due to expanded demand for electronic devices and the resumption of automobile production amid the impact of COVID-19, and wafer prices, a key semiconductor material, also rose in the first half of this year, IDC reported. Furthermore, due to the opportunity costs of rising material prices and advanced process technologies, the upward trend in semiconductor wafer prices is expected to continue through the second half of the year.

IDC projects that the semiconductor market will exceed $600 billion by 2025, with an annual average growth rate of 5.3%, surpassing the past growth rates of around 3-4%.