SAN MATEO, CA – As a result of the spread of Covid-19, there is nearly an 80% chance for significant contraction in worldwide semiconductor revenues in 2020, instead of a previously expected minor overall growth of 2%, according to a new report from International Data Corp.

At this time, IDC believes the most likely outcome will be a year-over-year revenue drop of 6% in 2020, with a probability of 54%. The impact will be $25.8 billion.

"The emergence of COVID-19 has brought with it travel bans and quarantines; massive slowing of the supply chain; uncertainty in the stock market; falling business confidence; and growing panic among the population," said Mario Morales, program vice president, Semiconductors and Enabling Technologies at IDC. "Despite the growing uncertainty and panic, technology suppliers must continue to focus on their long-term investments, maintain engagement with partners and prospects, and look to specific markets for stability. Emerging technologies like 5G, the Internet of Things, high-performance computing, and intelligent edge will be fundamental to an overall recovery by the technology sector."

The research firm says the Covid-19 crisis is just beginning, with too many variables to immediately craft a single forecast in response. The impact to technology supply chains in China are significant, but the timing of the recovery is uncertain.

There is still a one-in-five chance a fast, strong bounce-back from Covid-19 in 2020 is possible, says IDC. The supply chain will start to recover, and quarantines and travel bans will ease, over the summer. While the impact of the virus will be felt through the bulk of the year, the accumulated knowledge about the virus, public health initiatives, and other efforts will to some degree mitigate harm done by Covid-19. In the short term, there will be lower demand for systems and some impact to component availability, but as recovery sets in, growth will return to the market.