When 2020 started, global economic conditions pointed to single-digit percentage sales growth in the IC market after it fell by 15 percent in 2019, based on worldwide market data compiled by IC Insights for the 2020 edition of The McClean Report—A Complete Analysis and Forecast of the Integrated Circuit Industry (MR20). However, the world abruptly changed in 1Q20 with the rapid outbreak of the Covid-19 virus, which shut down nearly all countries and paralyzed global markets beginning in March 2020.
Figure 1 depicts the changes made to IC Insights’ 2020 total IC market forecasts as compared to the original MR20 forecast presented in January of this year.
As shown, the current worldwide 2020 IC market expectation of $345.8 billion is $39.0 billion less than the original MR20 forecast, which called for an 8 percent increase this year. A further breakdown of the total IC market and a forecast for each of the 33 IC product categories by market, units, and average selling price through 2024 is presented in the April Update.
IC Insights published its March Update on March 12. This Update included assumptions for the 2020 IC market that considered the potential impact of the coronavirus. When the March Update was released, the expectation at that time was that the majority of the impact on the global economy and IC market from Covid-19 would primarily be from market and production disruptions within China.
However, the impact of Covid-19 has truly transformed into a worldwide issue with the U.S. and Europe now being the “hotspots” of this highly infectious and deadly virus. The data shown below illustrates how quickly things changed in the U.S. in just the past four weeks.
As shown in Figure 1, IC Insights’ current baseline forecast for the IC market in 2020 calls for a 4 percent drop. Moreover, global GDP is now expected to post a decline this year that is at least as deep as the 2.1 percent drop that was registered in 2009. How rare is a decline in worldwide GDP? Before 2009, the previous year that global GDP went negative was 1946, 63 years ago!