The semiconductor market experienced significant growth in the first quarter of 2024, driven largely by developments in the memory sector, according to the latest research from the International Data Corp. (IDC). The report highlights how the stabilization of device markets and the rising demand for artificial intelligence (AI) applications have played key roles in this expansion.
“In 2024, memory makers will continue to be key players in the global integrated device manufacturer (IDM) market,” said Helen Chiang, head of Semiconductor Research, Asia Pacific, IDC.
She noted that as inventory levels continue to stabilize, the automotive and industrial sectors are expected to see a resurgence in demand during the second half of the year, further contributing to market growth.
The report underscores the role of high-bandwidth memory (HBM) in shaping the memory market’s trajectory. With prices significantly higher than those of traditional memory, HBM has led to a tightening of Dynamic Random Access Memory (DRAM) capacity within the device market, subsequently driving up prices and boosting overall memory market revenue. The release of AI-powered PCs and smartphones, which require more memory than their traditional counterparts, has further fueled this growth.
AI in data centers
The IDC said memory-related companies have dominated the IDM market this quarter, with three of the top five vendors specializing in this area. These companies accounted for nearly half of the total revenue among the top 10 vendors, which include industry leaders such as Samsung, Intel, SK Hynix, Micron, Infineon, Texas Instruments, STMicroelectronics, NXP, Sony, and Murata.
The demand for AI in data centers and consumer devices is expected to sustain the momentum of the memory market into the second half of 2024. Computing remains the leading application field within the IDM market, representing 35% of the total share in Q1 2024, an increase from 29% in the same period last year. Wireless communication follows as another key sector.
In contrast, the automotive and industrial markets have faced challenges due to excess chip inventories and customer stockpiling driven by last year’s supply chain disruptions. As a result, these markets have seen a decline in their market share compared to the previous year. However, they are expected to focus on inventory adjustments in the first half of 2024, with a potential rebound anticipated in the third quarter.
IDC said the semiconductor market will likely continue to be shaped by the evolving dynamics of the memory sector and the growing demand for AI-driven technologies as the year progresses.