Despite experiencing a slowdown during the second half of 2022, the semiconductor industry achieved its highest-ever annual sales, with a 3.3% year-over-year increase. Despite the near-term challenges of high inflation and declining consumer demand, industry experts hold an optimistic long-term outlook for the semiconductor sector due to its growing applications across various fields.
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According to Gartner, global semiconductor revenues will decline 11.2% in 2023. Although the long-term growth prospects of the semiconductor industry look bright, the current macroeconomic headwinds will continue to put pressure on the chip industry in the short term.
Gartner’s Practice VP Richard Gordon said, “As economic headwinds persist, weak end-market electronics demand is spreading from consumers to businesses, creating an uncertain investment environment.” The sector is poised for long term growth, due to the increasing interest in generative AI, which is expected to elevate the demand for advanced semiconductor chips.
INTC reported better-than-expected earnings and revenue in the second quarter. The company returned to profitability after two consecutive quarters of losses. For the third quarter, it guided for EPS of 20 cents per share and revenue of $13.40 billion at the midpoint. INTC’s third-quarter earnings and revenue forecast were higher than the Street estimates of 16 cents per share and $13.23 billion, respectively.
INTC CEO Pat Gelsinger said that the company continues to witness “persistent weakness” in all segments of its business through year-end, and its server chip sales will not recover until the fourth quarter. He also highlighted that cloud companies were securing graphic processing units (GPUs) for artificial intelligence (AI) instead of its central processors.
Due to demand softness in the consumer electronics market, demand for chips will remain subdued, putting pressure on…
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