Assuming that production chains, demand and technological innovation return to normal within three to nine months, the world semiconductor market would shrink by 6% in 2020.

Research firm IDC said Wednesday, due to the effects of coronavirus, there is an 80 percent risk of a major contraction in semiconductor revenues in 2020.

The decline’s most likely size would be 6% of global semiconductor sales with a 54 per cent likelihood, IDC said, resulting in a $26 billion loss. According to the Semiconductor Industry Association, overall semi-revenue in 2019 were $412 billion, which was a 12 per cent decrease in sales over 2018.

semiconductor industry

The semiconductor industry joins the list of markets that are expected to be severely affected by the COVID-19 pandemic. According to IDC, the probability of its revenues decreasing is 80%. The decline could reach 6%, while the research firm previously anticipated an increase of 2%. The difference between the two forecasts represents $ 25.8 billion less in turnover for manufacturers in the sector.

A 12% drop in the worst case

This scenario is not the only one developed by IDC which nevertheless judges it most likely to occur (54% probability). It was built on the assumption that production, demand and technological innovation will return to normal within 3 to 9 months. The worst-case scenario anticipates a 12% drop in income. The most optimistic allows us to envisage growth of 6% and more. This would require a return to normal within 1 to 3 months.