Omdia: Semiconductor market posts strong Q3, set for significant growth in 2024

Rhea-AI Summary

The global semiconductor market demonstrated robust growth in Q3 2024, with revenues reaching $177.8 billion, an 8.5% increase from Q2 and a 25% year-over-year growth. The industry is on track for a 24% annual expansion, primarily driven by AI-related demand. The first three quarters of 2024 saw a 26% revenue increase compared to 2023, totaling approximately $494 billion.

NVIDIA and SK Hynix have emerged as major beneficiaries of the AI surge, being the only companies among 127 analyzed to more than double their revenue. However, growth remains uneven across sectors, with the industrial segment facing a projected 16% decline in 2024. The automotive sector has stabilized, while memory markets show improvement with Samsung, SK Hynix, and Micron ranking in the top six. NVIDIA maintains the leading position with over 15% market share.

Positive

• Q3 2024 semiconductor revenue increased 8.5% QoQ to $177.8 billion
• 25% YoY growth in Q3 2024 compared to Q3 2023
• 26% revenue increase in first three quarters of 2024 vs 2023
• Memory market projected to grow by $73 billion in 2024
• NVIDIA increased revenue by 10.5% in Q3, maintaining market leadership

Negative

• Industrial sector facing 16% YoY decline in 2024
• Automotive semiconductor revenue remains flat YoY
• Industrial segment expected to see $10 billion revenue decline in 2024
• Growth largely concentrated in AI segment, showing uneven industry recovery

Insights

Financial Analyst

The semiconductor market's Q3 performance signals a robust recovery, with revenue reaching $177.8B, marking a 8.5% QoQ and impressive 25% YoY growth. The $494B revenue in the first three quarters already surpasses 2020's full-year figures, primarily driven by AI-related demand. NVIDIA and SK Hynix emerge as standout performers, with NVIDIA commanding over 15% market share. However, this growth isn't uniform - the industrial sector faces a projected 16% decline, while automotive remains flat. The memory market's expected $73B growth in 2024 benefits key players like Samsung, SK Hynix and Micron, suggesting a broader industry recovery beyond just AI applications.

Market Research Analyst

The semiconductor industry's bifurcation between AI and non-AI segments presents both opportunities and challenges. While AI-focused companies are thriving, traditional sectors face headwinds, creating a two-speed market. The projected 4.5% growth in Q4 to $186B indicates sustained momentum in AI-related demand. The $10B decline in industrial segment revenue highlights the impact of weak macroeconomic conditions. This divergence suggests a structural shift in the semiconductor market, where companies' exposure to AI technologies increasingly determines their growth trajectory. The strong performance of memory manufacturers indicates a broader recovery in key semiconductor components beyond just AI processors.

Tech Industry Analyst

The semiconductor industry's transformation is evident in the contrasting fortunes of AI-centric versus traditional segments. NVIDIA's continued dominance and 10.5% sequential growth in Q3 underscores the sustained demand for AI computing infrastructure. The success of SK Hynix in high-bandwidth memory demonstrates how AI's influence extends beyond just processors. However, the weakness in industrial and automotive sectors suggests a recalibration of traditional semiconductor markets. With 17 of the top 20 companies showing sequential growth, the industry's recovery appears broad-based, though clearly tilted toward AI-enabling technologies.

LONDON, Dec. 12, 2024 /PRNewswire/ -- The global semiconductor market surged in Q32024, with revenues climbing 8.5% from the previous quarter to $177.8 billion, (from $163.8 billion) driven by the booming AI segment. This demonstrates a remarkable 25% year-over-year growth from $141.6 billion in Q32023, positioning the industry for an impressive 24% annual expansion according to Omdia's latest research.

Aggregate semiconductor revenue for the first three quarters of 2024 increased by 26% compared to the same period in 2023 – a $102 billion increase – according to Omdia's Competitive Landscaping Tool report. This growth was fueled by strong demand for AI and related semiconductor components.

Cliff Leimbach, Senior Analyst at Omdia, stated, "The high demand for AI is setting 2024 up to be a record-breaking year.  Semiconductor revenue from the first three quarters of 2024, approximately $494 billion, has already surpassed the total for all of 2020. However, this robust revenue is not evenly distributed across the industry. For example, the industrial sector is facing weak demand and is projected to see a 16% year-over-year decline in 2024."

NVIDIA and SK Hynix are two companies that have greatly benefited from the AI surge: NVIDIA through its GPUs, and SK Hynix through high-bandwidth memory. Among the 127 semiconductor companies analyzed in the Competitive Landscaping Tool report, these two companies are the only ones who have more than doubled revenue in the first three quarters of 2024 compared to same period in 2023.

Semiconductor revenue is expected to continue growing = in the fourth quarter, increasing approximately 4.5% to nearly $186 billion, as AI-focused companies continue to outperform the broader semiconductor industry.

However, growth outside of AI has been challenging in certain sectors. The automotive market, saw consistent semiconductor revenue growth from Q32020 through Q32023, has stabilized as demand leveled off in 2024, with revenue expected to remain flat compared to 2023. Additionally, weak macroeconomic conditions have impacted the industrial segment, which is forecasted to experience a $10 billion in decline in revenue in 2024 compared to 2023.

Despite the unevenness performance across semiconductor segments, all top ten companies saw sequential revenue growth in Q32024 with 17 of the top twenty companies also growing quarter-over-quarter.

NVIDIA held the number one ranking in the third quarter, with a 10.5% revenue increase from Q22024 driven by AI demand. Its share of the semiconductor market rose slightly to over 15%.

Outside of NVIDIA, improved memory market dynamics have  boosted rankings for memory companies. The memory market is forecast to grow by $73 billion in 2024 than 2023 placing Samsung, SK Hynix, and Micron in the top six.

ABOUT OMDIA

Omdia, part of Informa TechTarget, Inc. (Nasdaq: TTGT), is a technology research and advisory group. Our deep knowledge of tech markets combined with our actionable insights empower organizations to make smart growth decisions.

Contact

Fasiha Khan- fasiha.khan@omdia.com

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SOURCE Omdia

FAQ

What was the semiconductor market revenue in Q3 2024?

The global semiconductor market revenue reached $177.8 billion in Q3 2024, representing an 8.5% increase from the previous quarter.

How much growth is expected in the semiconductor market for 2024?

The semiconductor market is expected to see a 24% annual expansion in 2024, driven primarily by AI-related demand.

Which semiconductor companies benefited most from AI demand in 2024?

NVIDIA and SK Hynix were the only companies among 127 analyzed that more than doubled their revenue in the first three quarters of 2024 compared to 2023, primarily due to AI-related demand.

What is the projected decline in the semiconductor industrial sector for 2024?

The industrial sector is projected to see a 16% year-over-year decline in 2024, with an expected revenue decrease of $10 billion compared to 2023.

What is NVIDIA's current market share in the semiconductor industry?

NVIDIA holds over 15% market share in the semiconductor industry, maintaining the number one ranking in Q3 2024.