Semiconductors: Global chip sales to reach $526.9 billion in 2023

After chip sales reached a record $574.1 billion in 2022, the chip industry's global revenue fell 8.2% to $526.9 billion in 2023 due to normal market cycles.

Historically, the PC/computer and communications end markets accounted for about two-thirds of total sales, with industries such as automotive, industrial, and consumer electronics accounting for the rest. But in recent years, sales by end market have changed, and this trend continues in 2023. According to the World Semiconductor Trade Statistics (WSTS) organization's survey of semiconductor end uses in 2023, the PC/computer and communications end markets still account for the largest share of semiconductor sales in 2023. Sales in the communications industry increased by 2 percentage points, while PC/computer sales fell to 25%. At the same time, the automotive industry saw the largest increase in chip sales share, becoming the third largest end market in 2023.

The automotive industry will continue to be an important industry driving semiconductor demand over the next decade. Innovations in vehicle electrification, autonomous driving, and connectivity require more chips. Current cars, including electric vehicles, can use between 1,000 and 3,500 semiconductors. This number is expected to grow as consumers continue to prioritize vehicle safety systems such as advanced driver assistance systems (ADAS), vehicle connectivity, and electrification when choosing a car.

Despite a global semiconductor market downturn in 2023, chip demand is expected to show strong growth in the long term. In fact, WSTS expects the market to grow at a double-digit annual rate through 2024. To meet this growing demand, the industry recently pledged to expand manufacturing capacity in the United States through more than $250 billion in private investments to date.