The Semiconductor industry is notoriously cyclical, as every manufacturer servicing it is well aware. The industry had a challenging year in 2023, with its seventh downturn since 1990. The challenges continued through Q1 of 2024. However, the sector is pulling out of the slump, with the Semiconductor Industry Association reporting that industry sales in April 2024 rose to $46.4 billion, an increase of 15.8% compared to April 2023 and 1.1% over the March 2024 total of $45.9 billion.
The World Semiconductor Trade Statistics (WSTS) organization released a new industry forecast projecting an annual global sales increase of 16% for 2024 and 12.5% in 2025. Growth in 2024 is expected to be led by the Americas with 25% growth.
The report indicated that, “Regionally, year-to-year sales in April increased in the Americas (32.4%), China (23.4%), and Asia Pacific/All Other (11.1%), but decreased in Europe (-7.0%) and Japan (-7.8%). Month-to-month sales in April increased in the Americas (4.2%), Japan (2.4%), and China (0.2%), but decreased in Asia Pacific/All Other (-0.5%) and Europe (-0.8%).”
Here’s the WSTS Forecast Summary
The value of M&A deals in the semiconductor sector reached $200 billion in 2024, a 50% increase over 2023. The number of deals has risen 25% in 2024. Major, high-profile deals include Intel’s $75 billion acquisition of Advanced Micro Devices and NVIDIA’s $80 billion acquisition of ARM Holdings.
The anticipated Semiconductor industry growth is expected to trickle down to lower middle market transactions that were stalled in Q4 of 2023 and Q1 of 2024.
