MILPITAS, CA – The current global semiconductor manufacturing industry contraction is expected to moderate in the second quarter and give way to a gradual recovery starting in the third quarter, SEMI announced in the latest publication of the Semiconductor Manufacturing Monitor Report.

According to the report, which is prepared in partnership with TechInsights, industry indicators including IC sales and silicon shipments – both partly supported by seasonality – point to quarter-over-quarter improvements. Despite the gains, elevated inventories continue to dampen silicon shipments and fab utilization rates remain significantly lower than levels registered last year. In addition, semiconductor equipment sales continue to decline in parallel with capital expenditure adjustments by major industry stakeholders.

The indicators point to a likely bottoming of the current downturn in the second quarter with a slow recovery expected to begin in the year’s second half, SEMI reported.

"The current market downturn is compounded by soft consumer demand and elevated inventory levels and has led to a sharp decline in semiconductor fab utilization," said SEMI Senior Director of Market Intelligence Clark Tseng. "However, as the inventory correction comes to an end in mid-2023, a mild recovery is expected in the second half of the year driven by a pickup in demand for inventory and the holiday season."

"Despite ongoing uncertainties and risks, we expect continuing production cuts and capex reductions, especially in the memory market, will start having a positive impact on market fundamentals in the latter part of the year, resulting in a more balanced market environment," said Risto Puhakka, VP of market analysis at TechInsights.