5G Expansion to See Chip Demand Rebound in 2020
Global demand for memory chips is expected to rebound next year, driven by the spread of 5G services, according to new market research reports.
2019 saw chipmakers, such as Samsung Electronics Co. and SK Hynix Inc., suffer from a decline in sales revenue, on account of excessive inventories and lower demand from corporate customers.
According to the latest data from research firm IHS Markit, semiconductor sales fell by 15 percent to US $111 billion in the July-September quarter, down 15 percent on 2018. Forecasts predicted that the world’s semiconductor sales would remain weak and post a 12 percent year-on-year sales drop for the whole of 2019.
World Semiconductor Trade Statistics (WSTS) predict a 13 percent decline in overall semiconductor sales in 2019 compared to 2018.
However, market research firms predict that chip sales will increase in 2020 to meet the demand from providers of 5G mobile communication services that facilitate global connectivity.
WSTS expect 2020 to see chip demand grow by 5.9 percent compared to 2019, and DRAMeXchange anticipates a recovery in DRAM prices next year, thanks to increased use of 5G services.
5G is expected to be used heavily across connected cars, the Internet of Things, and data centres.
As companies become increasingly interested in 5G technology, artificial intelligence, deep learning and virtual reality businesses, IC Insights believe this will help drive up the demand for NAND flash memory and dynamic random access memory chips.