After 1Q23 Bottom, Expectations Increase for a 2Q23 IC Market Rebound
Notably, the IC market has never shown more than three sequential quarters of decline!
Over its 60-year history, the IC industry is well known for its cyclical behavior. Looking back to the mid-1970s, there hasn’t been a period where the IC market declined for more than three quarters in a row. Following a 9% drop in the 3Q22 IC market, and assuming the 4Q22 and 1Q23 IC markets register a decline, the 3Q22-1Q23 time period would mark the seventh three-quarter IC market drop on record (Figure 1).
As shown, there hasn’t been a three-quarter decline in the IC market since 4Q18-2Q19. Moreover, the three-quarter decline in 2001 was the steepest on record, with three double-digit declines, which led to a 33% annual decline—the most severe annual IC market drop in history.
Given that the IC industry has never registered a four-quarter sequential IC market decline, expectations are high for a return to IC market growth beginning in 2Q23. While the U.S. and China trade war is an unpredictable “wildcard” for near-term IC market growth scenarios, 2Q23 is currently expected to display modest 3% increase. However, even with a rebound in IC sales beginning in 2Q23, the total IC market is forecast to drop by 6% next year.