The second half of 2022 was hard on chip sales globally, even as the full year saw sales increase 3.2%. In fact, all of 2022 brought in the highest-ever annual total at $583 billion.
But the fourth quarter was tough, down nearly 15% from the same quarter a year earlier and down nearly 8% from the third quarter. 4Q sales totaled $130 billion globally.
For the Americas, 4Q sales into North and South America were down nearly 6% over the third quarter, based on a three month moving average tallied by the World Semiconductor Trade Statistics organization. Yet, over all of 2022, the Americas saw revenues of $140.9 billion, the largest increase of 16% compared to 2021.
China fared worse in 4Q compared to 3Q than the Americas, dropping by 12%. For all of 2022, China saw sales drop 6% compared to 2021, but remained the largest individual market for semconductors, with sales of $180 billion.
Semiconductor Industry Association President John Neuffer said 2022 was a year of “significant up and downs,” and also called the last part of the year a “cyclical downturn.”
Neuffer and nearly all industry observers believe the downturn was due to normal market cycles and macroeconomic conditions, including Covid shutdowns in China. “The long-term outlook for the semiconductor market remains incredibly strong due to the ever-increasing role of chips in making the world smarter, more efficient and better connected,” he said in a statement.
The WSTS has previously forecast a global decline of 4% in sales in 2023 over 2022. Still, many economists believe chip sales are still on track to reach $1 trillion in sales by 2030. Sales in 2022 were up by 4% over 2021. In November, the WSTS said the tally for 2023 is expected to reach $557 billion driven by a decline in memory chips of 17% over 2022, a drop of $112 billion.
The highest growth rate of chip product segments in 2022 came from analog chips with a growth rate of 7.5% and $89 billion in 2022 sales. Logic came in at $176 billion while memory chips came in at $130 billion. Automotive ICs grew by more than 29% for a record total of $34 billion.
Several companies that produce chips or chip designs have anticipated slower first quarter or first half 2023 sales, including Intel, Texas Instruments and Qualcomm. Their customers have already built up enough chip inventory and are seeing demand for products like smartphones, PCs and servers decline. Texas Instruments, which relies on analog chips for 75% of revenues, recently said it expects downward trends from the fourth quarter of 2022 to continue into 1Q 2023, although chips for automotive are expected to remain resilient.