BISinfotech Semiconductor Industry Outlook in 2023

Professionals in the semiconductor industry are familiar with shortages, also known as allocations, as they are cyclical in nature. Natural disasters, variations in the semiconductor material supply, shifting economic conditions, or other geographic and political events can all result in shortages. These allocation periods for electronic components have typically been brief (between six months and a year), but the current chip shortage represents an unprecedented buck in that pattern.

The market has witnessed numerous companies transition to just-in-time inventory strategies over the past ten years the Semiconductor Industry Outlook 2023 mentions. When there are no shortages in the supply chain, this is economical and efficient because a just-in-time system allows companies to reduce their supply chain inventory while saving on costs and storage space. Semiconductor Industry Outlook 2023 states in order to accurately increase and decrease production based on their anticipated orders and inventory pipeline, businesses rely on factory capabilities. The majority of semiconductor manufacturing facilities, or “fabs,” run at about 80% capacity utilisation and adjust this operating level to account for demand fluctuations mention in this Semiconductor Industry Outlook 2023. Due to the disruption caused by the unpredictability of the past two years’ events, businesses are currently dealing with supply chain shortages.

Consumer Electronics Facing Low Demand

The consumer electronics sector, which includes tablets, PCs, and cell phones, has seen a decline due to weak demand. IDC projects that there will be 1.27 billion smartphones shipped globally in 2022, a 6.5% YoY reduction. IDC also notes that global shipments of PCs and tablets will fall by 12.8% and 6.8% to 305.3 million and 156.8 million units, respectively, in terms of personal computing devices notes the Semiconductor Industry Outlook 2023.