After three consecutive years of growth, worldwide semiconductor revenues are forecast to decline by more than 7 per cent this year, according to a new forecast from IDC.

The research company said sales will fall from $474 million to $440 million but are expected to bounce back next year.

IDC said semiconductor revenues will likely log a compound annual growth rate (CAGR) of 2 per cent from 2018 to 2024, reaching $524 million in 2023.

According to the research company, after a strong cycle of demand for DRAM and NAND chips, there is now an oversupply of product on the market.

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Despite a challenging fourth quarter, the DRAM and NAND memory markets grew to $99 billion and $55 billion in 2018 respectively, reflecting year-over-year growth rates of 36 per cent and 12 per cent.

Excluding DRAM and NAND, the overall semiconductor market rose by 8 per cent year-over-year. For 2019, non-memory semiconductors are expected to grow 1 per cent to $319 billion while DRAM and NAND are expected to a decline in 2019 and 2020.

Samsung Electronics retained its position as the top semiconductor manufacturer.

The top 10 companies make up 62 per cent of the market overall, IDC said, up from 56 per cent two years ago.

IDC said it expects market consolidation to accelerate as the industry gets more clarity on the trade tariff dispute between China and the US.

"The current market downturn is being driven by a broad weakness in demand specifically centered in China and an ingestion of excess inventories in some of the major markets including automotive, mobile phones, and cloud infrastructure," said Mario Morales, program vice president, semiconductors at IDC.

“We expect the market to bottom by end of the third quarter this year as we work through inventories and demand begins to gradually return. Cloud infrastructure investment, 5G mobile devices, WiFi 6 adoption, Smart NICs, automotive sensors, powertrain technologies, AI training accelerators, and edge inference system on a chips (SoCs) will be instrumental in our growth expectations for 2020 and beyond,” he added.