Tuesday, 21 September 2021 10:05

Semiconductor market seen growing by 17.3%, shortage set to end by mid-2022

Semiconductor market seen growing by 17.3%, shortage set to end by mid-2022 Image by Gerd Altmann from Pixabay

The market for semiconductors is expected to grow by 17.3% year-on-year globally, against a figure of 10.8% in 2020, the technology analyst company IDC says, adding that the current shortage should be over by the middle of 2022.

Somewhat surprisingly, IDC forecast that there would potentially be an oversupply in 2023 as large-scale capacity expansions came online towards the end of 2022.

In April, another technology analyst firm, Gartner, said sales of semiconductors in 2020 had reached US$466.2 billion, representing an increase of 10.4% year-on-year.

Shortages of semiconductors are expected to keep easing through the final quarter of 2021 as capacity additions grow.

“The semiconductor content story is intact and not only does it benefit the semiconductor companies, but the unit volume growth in many of the markets that they serve will also continue to drive very good growth for the semiconductor market,” said Mario Morales, group vice-president, Enabling Technologies and Semiconductors at IDC.

The company said that there was no noticeable drop in use of semiconductors due to the ongoing pandemic, with dedicated foundries having been allocated for the remainder of 2021 with almost full capacity utilisation.

"Front-end capacity remains tight, but fabless suppliers are getting the production they need from their foundry partner," the IDC analysis said. "Front-end manufacturing is starting to meet demand in 3Q. However, larger issues and shortages will remain in back-end manufacturing and materials."

Revenue from 5G semiconductor revenues are forecast by 128%, with mobile phone semiconductors expected to grow by 28.5%. Game consoles, smart home, and wearables are predicted to grow by 34%, 20%, 21% respectively.

IDC said automotive semiconductor revenues would also rise by 22.8% as shortages were mitigated by year end. Notebook semiconductor revenues were forecast to grow by 11.8%, while X86 Server revenues would rise by 24.6%.

The tech analyst firm said wafer prices had gone up during the first six months of the year, and this trend was expected to continue during the second half.

The market for semiconductors is predicted to reach US$600 billion (A$826.5 billion) by 2025, a compound annual growth rate of 5.3%, and much higher that the 3.4% growth normally witnessed in a mature industry.

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Sam Varghese

Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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