Worldwide chip sales decimated by coronavirus

Coronavirus has killed off any hope of a 12.5 percent growth forecast, according to Gartner bean counters.

Now after shuffling their tarot cards, the augers at Big G think that worldwide semiconductor revenue is forecast to decline by 0.9 percent during 2020 due to the economic effects of the COVID-19 pandemic.

Expected revenue has been slashed from the previous quarter’s forecast by $55 billion, falling from $470 billion to $415 billion, according to Gartner. This represents an overall decline in year-on-year revenues against 2019 figures.

However, memory revenue is forecast to grow by 13.9 percent. This will save the market from a much sharper contraction, with an expected 6.1 percent drop in non-memory semiconductor revenue.

Gartner’s research practice vice president Richard Gordon said: “The widespread of COVID-19 across the world and the resulting strong actions by governments to contain the spread will have a far more severe impact on demand than initially predicted.

“This year’s forecast could have been worse, but growth in memory could prevent a steep decline.”

The memory market, which will comprise roughly a third of all semiconductor sales in 2020, is forecast to reach $124.7 billion. The non-memory revenue market will decline and will reach $290.6 billion in 2020.

NAND flash revenue is expected to grow 40 percent, despite coronavirus disruption, due to severe shortages from the previous year. Demand is not expected to recede until later this year.

DRAM revenue, meanwhile, will decline by 2.4 percent this year. Strong demand from cloud service providers in the first half of this year will push income higher in server DRAM, according to Gartner. This growth will be offset by weak demand and falling prices from the smartphone market, however.

There will be a reduction in demand among smartphone manufacturers and for companies in the automotive and consumer electronics segments.