Chen Chang, Strategic Business Development Sr Director, Emerson Test & Measurement BU

Navigating the Semiconductor Recovery in 2024 

In the aftermath of a challenging year for the semiconductor industry, marked by a down cycle fueled by macroeconomic pressures and shifts in consumer electronics demand, 2024 holds promising prospects. With supply chain pressures alleviating and lead times beginning to shrink, the industry is poised for a potential double-digit rebound according to Gartner research

Rebounding from Supply Chain Challenges 

Following the COVID-19 pandemic, the semiconductor industry faced a prolonged chip shortage, exacerbated by external factors including the worst drought in half a century hitting Taiwan and a plant fire in Wuxi, China. Governments worldwide have responded by injecting substantial funds to establish new fabrication facilities, aiming to increase production capacity and prevent global competition gaps. China has been leading the way in development of semiconductor production facilities and moving into 2024, it will likely continue to be the largest player as the rest of the world catches up. 

Much of the production volume this year will ultimately be driven by the need for new equipment such as silicon and test and measurement equipment.  Although there is a gradual return to normalcy from an inventory perspective, manufacturers are expected to adopt a cautious approach, anticipating modest growth, particularly in the first half of the year. 

Increasing Charging Capabilities for Electric Vehicles 

The surge in electric vehicle (EV) adoption has heightened the demand for semiconductors, particularly the need for new silicon capabilities to increase higher voltage in batteries to meet consumer demand for faster charging. However, this transition brings safety and reliability challenges, necessitating increased investment in test and measurement equipment. I predict there will certainly be an uptick in new requirements to simulate the various grid conditions, charging scenarios, battery conditions and the different ways to wirelessly manage battery management subsystems. Rigorous testing becomes imperative to ensure safe and efficient charging capabilities, preventing issues like overheating and premature battery degradation. 

Making the Jump From 5G to 6G 

As 5G matures in many regions, the semiconductor industry is gearing up for practical developments around 6G.  While millimeter wave (mmWave) 5G provides immense bandwidth, range limitations make economic viability questionable beyond high-density urban areas. Deploying 5G capabilities in remote areas is almost financially impossible, so wireless providers have been looking for alternative ways for 5G frequencies to reach these areas. I predict in 2024 there will be significant progress in enabling 5G frequencies to reach remote areas through a collective interest around lower frequency spectrum between 5G and mmWave that balances range, bandwidth and deployment costs for wider coverage. As 5G development expands, semiconductor companies and network operators have big architecture decisions around upgrading existing infrastructure versus new build outs. 

Rapid Growth of AI Technologies 

Like many industries, AI and machine learning continues to drive innovation and pose challenges for the semiconductor industry. Specifically, AI technology like generative AI is increasing the demand for new chips and silicon hardware that’s optimized for complex computing needed to power these supercomputers. I predict there will be an increased push to enable more AI processing directly on devices rather than relying on the cloud which could decentralize where chip innovation occurs. 

Looking Forward into 2024 

While there are still economic uncertainties and logistical challenges to navigate on the road back to peak conditions, the pieces are lining up and inventory restocking underway indicate 2024 could see the semiconductor industry exit its downcycle slump and enter a growth phase.   

Go to the next page for predictions from Spirent.