Semiconductor revenue: Intel tops, Nvidia soars in 2023 slump

In the technology industry, where silicon drives innovation, the global semiconductor industry reflects the ebb and flow of progress through its revenue patterns. In 2023, several challenges emerged — a dip in spending led to an 8.8% global revenue decline.

Amid the narrative twists of the year, Intel reclaimed the revenue throne from Samsung, which was grappling with memory sector woes, while Nvidia stole the show, nearly doubling its 2023 revenues and ascending to the third spot in the market.

The global semiconductor industry has witnessed a market in flux, and it’s still navigating the delicate balance of supply and demand. “The global semiconductor industry’s revenue declined 8.8% in 2023 due to a slowdown in enterprise and consumer spending. Besides, the overall 2023 semiconductor revenue rankings saw some big changes from 2022, like Intel reclaiming the top spot from Samsung as the latter suffered a lot from the memory sector downtrend as well as lackluster smartphone business,” Counterpoint Research said in its latest Global Semiconductor Revenues report.

The report characterizes 2023 as a year for semiconductor companies to fine-tune their strategies/outlook and manage inventory adjustments to prepare for the impending AI boom. “AI provided positive news to the semiconductor industry, emerging as a key content and revenue driver, especially in the year’s second half. Nvidia appeared to be the largest beneficiary, followed by AMD. Both will be growing their AI-related businesses in the coming years,” the report noted.

Counterpoint’s semiconductor revenue tracker shows only six of the top 20 global semiconductor vendors reported a year-on-year (YoY) revenue growth. The memory sector, in particular, experienced solid headwinds and was down 43% YoY in revenue in 2023. “We also found that the top 20 global semiconductor vendors contributed to 71% of the market, down from 76% in 2022 and showing a 14% YoY revenue decline,” Counterpoint added.

Intel & allies see declines, but AI surge lifted Nvidia up

In 2023, Intel may have reclaimed its throne but still echoed a 16% revenue dip from PC and server woes. Samsung got swept up in the memory market’s ebb and faced a 38% YoY revenue decline. Meanwhile, soft demand and market glut afflicted SK Hynix and Micron, marking 33% and 36% declines, respectively. 

Amid this symphony of setbacks, Nvidia emerged, riding the AI wave. With an 86% YoY revenue surge, Nvidia secured a third place in revenue, its first-ever top five position. “We believe the company will continue to lead the semiconductor industry’s growth because of its high market share of general purpose GPUs used in AI/high-performance computing,” the report noted.

AI to dominate the industry

Senior analyst William Li, commenting on the market dynamics, said he believes AI servers, AI PCs, AI smartphones, etc, will continue to be significant organic growth drivers in the semiconductor industry in 2024, followed by the memory sector’s rebound due to a normalizing oversupply situation and demand recovery. 

“The automotive sector could be another driver for the market due to content growth, which was already a key revenue driver for Infineon and STMicroelectronics in 2023,” he added. Li claims that since the industry is at the end of the inventory correction cycle and the support from clients’ demand is relatively solid, supply constraints will likely be the key variants to keep an eye on. 

“During its latest quarterly earnings call, the world’s largest foundry player, TSMC, maintained its solid capacity expansion plan for 2024. The company holds an optimistic view on its utilization rate in the coming quarters, reiterating our view of strong demand throughout the year,” Li concluded.

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