The emergence of COVID-19 is not like the expected bottom and gradual recovery in 2020, but will promote another contraction of the entire semiconductor market. Strong demand in March and early April has made computing, connectivity and memory products more resilient. However, the continuous transfer of existing orders and purchases to basic goods and services worldwide will have a negative impact on consumer and business spending.
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According to the latest information, IDC expects that as the global economy strives to recover from this unprecedented crisis in 2020, the entire semiconductor market will decline by 4.2%. Excluding the DRAM and flash memory markets, semiconductors are expected to decline by 7.2%. In different industry markets, the demand for semiconductors will be very uneven. Smartphones will continue to be the biggest driver of demand, and as the number is concentrated in 4G, overall will remain weak. Large Chinese OEMs will need to reduce inventories after they have filled their channels in the past few quarters. This will push other Chinese OEMs to focus on launching 5G equipment to take advantage of potential subsidies from operators later this year.
IDC expects that despite the uncertain demand, 5G volume will continue to grow this year, which will drive a strong semiconductor content, because OEMs are positioning 5G at a lower level to expand coverage. In China, there are 5G mobile phones starting to sell for less than $ 300.
Smartphone shipments are expected to decline by a percentage point, which will have a few percentage points impact on overall semiconductor revenues this year.
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