Research firm Gartner Inc. today revised its forecast for the global semiconductor market, saying it now expects revenues to decline as a result of the coronavirus outbreak.

Gartner had previously forecast the semiconductor industry to grow by around 12.5% this year, but it now says the market will decline 0.9%, representing a percentage change of 11.6 points.

Gartner said overall revenue in the semiconductor market will come to $415.4 billion in 2020, down $55 billion from its original forecast.

“The wide spread of COVID-19 across the world and the resulting strong actions by governments to contain the spread will have a far more severe impact on demand than initially predicted,” Gartner Research Vice President Richard Gordon said in a statement.

There is some good news, though, as Gartner said the memory products segment of the industry will grow by 13.9% this year, helping to prevent a full-scale collapse of the market. The segment, which includes both flash memory and NAND products, is likely to grow following persistent supply problems the previous year that have helped to bolster demand. NAND memory is expected to be especially strong, with Garner forecasting growth of 40% in 2020.

Memory products will account for 30% of the semiconductor industry’s total revenue in 2020, topping $124.7 billion, according to Gartner’s forecast. Revenue from nonmemory semiconductor products is expected to reach $290.6 billion this year, down 6.1% from a year ago. The last segment, Dynamic Random Access Memory, will see revenue decline by around 2.4%, Gartner said.

“Nonmemory semiconductor markets will experience a significant reduction in smartphone, automobile and consumer electronics production and be heavily impacted across the board,” Gordon said. “In contrast, the hyperscale data center and communications infrastructure sectors will prove more resilient with the continued strategic investment required to support increased remote working and online access.”

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