Semiconductor Industry Trends for 2023

2022 proved to be a turbulent year for the semiconductor industry despite enourmous investment and support from the private and public sectors, and an incredible amount of coverage from international media as the knock-on effect of chip shortages impacted the general public. We saw supply chains cripple and geopolitical tensions rise, most recently between the USA and China. But what will 2023 have in store?

Is the semiconductor industry growing?

One of the first predictions made in any given year is always about revenue. Before 2022 was over, analysts and industry experts hedged their bets for the coming year. Most believe global semiconductor market revenue will shrink by 4% in 2023, with the memory market falling the most. Worsening global economic conditions are leading to the entire consumer electronics market slowing down, resulting in oversupply being almost unavoidable.

Whilst hundred of billions of dollars was invested to increase manufacturing capacity in 2022, demand for devices such as smartphones and laptops appear to be declining. Some believe that consumers are simply spending their hard-earned money on other things such as travel and leisure now they have the freedom to do so after lockdowns. Unless global economic conditions drastically improve and interest and inflation rates drop, we're likely to see this play out over the next 12 months.

What is the future of the semiconductor industry?

Regardless of what happens to global revenue in the industry over the next 12 months, we're likely to see a number of trends shape the industry in 2023. Here's the biggest trends we expect to see.

The Automotive market will soar in 2023

As the EV market continues to soar and research and development in autonomous vehicles thrives, we're likely to see this area of the industry boom in 2023. The growth of these markets will partly hinge on the power and ability of the semiconductors in the vehicles themselves. 21st century cars require 21st century tech, and the best people in the market to design, test and manufacture them. As this market diversifies outside of the domestic market and into transport and freight, we're likely to see the projected growth compound over time. Whether or not the growth in this market will be enough to compensate for the drop in the consumer electronics market is yet to be seen.

Closing the talent gap in the semiconductor industry

Whilst the investment the semiconductor industry received in 2022 was incredible, it will lead to the current talent gap expanding at an incredible rate as dozens of new facilities will need to be staffed. As it stands, an estimated 1,000,000 skilled workers will be required by 2030, equating to just over 100,000 every year. As a result, companies will be looking to hire a record amount of new employees across the globe to reach their full potential. We saw this prediction come to life at Electronica in November 2022, with heads of HR at dozens of companies all talking about plans for hiring over the next 12 months being a top priority.

Improving diversity in the semiconductor industry

Due to the recent success of our Women in Semiconductors roundtable, the growing focus on diversity and inclusion in the tech industry and the industry's current talent gap, we're predicting that companies will double down on their efforts to attract women into the semiconductor industry in 2023. The good news is that many companies and universities already have well rounded DEI initiatives, providing a solid platform for encouraging more women into the industry.

What we hope and believe to see in 2023 is a developing interest in talking to people from progressively younger ages. If we aren't seeing enough people, let alone females, in relevant university degrees, then we need to look at speaking to them before they get to university. Beginning to talk about STEM subjects and the semiconductor industry to people, especially women, at younger ages will help to position the industry as a far more viable career path.

Overall, the general consensus is positive within the industry when speculating about the next 12 months. Whilst it may be too soon to feel the effects of the record investments made throughout 2022, there is light at the end of the tunnel for the adverse market conditions we've endured for the past two years.

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