Semiconductor revenues to rise 6.7% quarter-over-quarter in Q2 2024 despite weak demand
source:freepik

Semiconductor revenues to rise 6.7% quarter-over-quarter in Q2 2024 despite weak demand

In a new analysis, Omdia reports that total semiconductor revenues reached a record high of $162.1bn in 2Q24, with a quarterly growth rate of 6.7%. This figure was approximately $500 million higher than the previous record set in 4Q21. This record growth was driven by NVIDIA, the industry's top revenue generator, whose current quarterly semiconductor revenues are $18 billion higher than in 4Q21.

Despite the record revenue in 2Q24, not all companies benefited. While the semiconductor market grew by $33 billion year-over-year, more than 50 percent of the companies surveyed saw their semiconductor revenues decline year-over-year. This indicates that half of the companies did not share in the market's revenue growth. In two record quarters, 4Q21 and 2Q24, more than 70% of the 125 companies tracked reported lower semiconductor revenues in 2Q24 than in 4Q21.

NVIDIA's revenues are now more than four times those of the semiconductor industry's previous record quarter (4Q21). Without NVIDIA, market revenues would be far from new highs. Excluding NVIDIA's revenue, the total record revenue for 4Q21 remains $155.8 billion, compared to $138.2 billion in 2Q24, a decrease of more than $17 billion.


source:omdia

NVIDIA's dominance is largely due to AI demand, but other semiconductor sectors are also benefiting from AI growth.

Memory companies are benefiting from AI demand, particularly high-bandwidth memory (HBM) chips that support AI processors. Moreover, the supply-demand balance in the memory market has improved, which is fuelling growth in other sectors. After a challenging 2023, the market has recovered and is now generating quarterly revenues of more than $40bn.

Commenting on the latest industry performance, Cliff Leimbach, Principal Analyst at Omdia, said: ‘The top semiconductor companies continue to grow in size.24 The top ten companies in terms of revenue now account for 64 per cent of the overall market in Q24, the highest share on record and seven percentage points above the five-year average of 57 per cent. Market gains are concentrated among fewer companies than in the previous record revenue quarter (4Q21). the top ten companies accounted for 57 per cent of revenue share in 4Q21.

NVIDIA continues to expand its market share and now accounts for 14.8 per cent of semiconductor market revenue, driven by strong AI demand. Intel, which has historically been ranked either #1 or #2, was ranked #3 for the third consecutive quarter this quarter. leimbach concludes: ‘Intel's market share of 7.5 per cent in 2Q24 is the lowest market share quarter since Omdia began tracking the semiconductor market in the first quarter of 2002.


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