IDC Reports on Semiconductor Market, Shortages

According to the Worldwide Semiconductor Technology and Supply Chain Intelligence service from International Data Corporation (IDC), worldwide semiconductor revenue is expected to reach $661 billion in 2022, a 13.7 percent year-over-year growth rate following strong 2021 results in which revenue reached $582 billion.

Demand by industry in 2021 was strongest in the industrial and automotive industries with 30.2 percent and 26.7 percent year-over-year growth, respectively. Leading growth applications were 5G phones, game consoles, wireless access points, data centers, and wearables. IDC expects those applications to continue growing in 2022, but more moderately as a whole as consumer-facing markets begin to see a slowdown by the fourth quarter of the year.

Markets served by mature process nodes were affected the most by semiconductor supply constraints, with manufacturers slowing down production lines or slowing the introduction of new products and features. These shortages drove up average selling prices (ASPs) as demand grew across most device applications over the past couple of years.

Samsung took the top semiconductor spot from Intel as memory sales grew considerably faster in 2021, reaching $75.8 billion compared to $57.7 billion in 2020 in semiconductor company revenues, a 31.1 percent year-over-year increase.

The top-five companies also included SK Hynix, Qualcomm, and Micron. In 2021, the top-10 companies held 58 percent of the total semiconductor market while the top-20 companies held 76 percent of the market, up from 57 percent and 75 percent respectively in 2020, showing the continued growth of the market share leaders. IDC tracks about 200 suppliers for its coverage and over 120 companies experienced a growth rate above 20 percent in 2021.

Supply Easing by Third Quarter

IDC expects front-end manufacturing to meet demand by the third quarter of this year, but back-end manufacturing and the materials supply chain is extending lead times and extending shortages until the end of the year and into the first part of 2023.

For 2022, IDC sees continued resilience in semiconductor sales worldwide with the cloud, network infrastructure, and automotive markets maintaining secular growth and semiconductor content per system increases as volumes moderate through the second half of the year.

Long-term agreements put into place by foundries and fabless and IDM suppliers during the semiconductor shortages of 2021 will support ASPs and bring demand visibility for semiconductor vendors this year, supporting capacity expansions, particularly in more mature process lines.

In the memory market, IDC forecasts DRAM and flash growth of 18 percent and 26 percent respectively in 2022 despite price attrition expected later this year.

Challenges that will create headwinds for the global economy include inflation and the fiscal policies to address it, as well as the shutdowns in China and the impact of the Ukraine-Russia war. With Shanghai beginning to relax restrictions and open at the end of June coupled with stimulus policies to restart the economies in cities under lockdown, the China economy could moderately recover in the second half of 2022.

IDC forecasts that the five-year compound annual growth rate (CAGR) from 2021-2026 will grow by 4.93%. Additional information can be found in the forthcoming IDC presentation, Worldwide Semiconductor Market Forecast Update and Final 2021 Market Share (IDC #US49263822).

“The semiconductor industry had an extremely strong growth year in 2021, but shortages and tight inventory in some semiconductor markets remain. The global nature of the semiconductor industry has been challenged by COVID-19 and continues to be impacted by regional shutdowns, but we reiterate our outlook for a positive growth year for 2022. Longer term, the new fabs and investment announcements will add significant capacity and could increase the risk of overcapacity beyond 2023,” said Nina Turner, research manager for IDC Semiconductors.

For more information on the IDC Worldwide Semiconductor Technology Supply Chain Intelligence report, visit IDC here.

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