Covid-19 will wipe out chip market growth in 2020, says Gartner

April 09, 2020 //By Peter Clarke
Covid-19 will wipe out chip market growth in 2020, says Gartner
The global chip market will fall by 0.9 percent to $415.4 billion in 2020 but be underpinned by strength in memory markets, according to the latest prediction from Gartner.

Gartners view of the memory market is more optimistic of that of another market analyst TrendForce

Gartner's overall market prediction is down from its forecast in the previous quarter that said the market was ready to rebound and would grow by 12.5 percent (see Chip market declined 12% in 2019, says Gartner ).

"The wide spread of COVID-19 across the world and the resulting strong actions by governments to contain the spread will have a far more severe impact on demand than initially predicted," said Richard Gordon, a vice president at Gartner. "This year's forecast could have been worse, but growth in memory could prevent a steep decline."

The impact of Covid-19 has taken about $55 billion out of Gartner's estimate for the annual global market.

The market research firm now feels the non-memory market will contract by 6.1 percent to $290.6 billion, about 70 percent of the market; while the memory market will grow year-on-year by 13.9 percent to $124.7 billion.

Garner said NAND flash revenue would grow 40 percent in 2020 due to persistent shortages of supply. "Initial price increases of 15.7 percent during the first half of 2020 will reverse to a 9.4 percent decline during the second half of the year. However, average pricing levels will still enable NAND flash revenue to achieve growth this year," said Gordon.

Nonetheless, 40 percent growth for NAND flash revenue seems extremely bullish. Gartner's view of the memory market differs from that of TrendForce which sees memory prices and market revenues falling in the 2H20 due to a collapse in demand ( Covid-19 likely to send memory prices, markets down ).

Gartner reckons cloud service providers and data center operators are creating strong demand for DRAM in 1H20 but that this will be offset by weak demand for DRAM from smartphone manufacturers. The full year estimate is that DRAM revenue will decline 2.4 percent in 2020.

For non-memory chip markets demand


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