GenAI drove the chip industry’s first quarterly revenue increase since 2021
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After five straight quarters with declining revenue, the semiconductor industry reversed course and increased revenue in the second quarter, according to a report by market researcher Omdia.
The company’s Competitive Landscape Tracker said quarterly revenue grew 3.8% to $124.3 billion Q2. This growth is in line with historical patterns for the total semiconductor market, with the second quarter revenue increasing on average of 3.4% from the first quarter (using data from 2002 through 2022).
However, growth within semiconductor segments continues to diverge from historical trends. For example, the dynamic random access memory (DRAM) market was up 15% in 2Q23 with the historical pattern of 7.5% in the second quarter.
Omdia said the growth is a welcome sign for the semiconductor industry after the longest period of declines since Omdia began tracking the market in 2002.
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However, the toll of the shrinking market has reduced the current market considerably, with the semiconductor market by revenue now at 79% of what it was one year ago when total revenue was $160 billion in 2Q22. It will take time to return to the revenue levels of late 2021.
Nvidia led the semiconductor turnaround in 2Q23. Industry wide, semiconductor revenue grew $4.6 billion from the
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