Semiconductor revenue could grow to $522 billion this year, despite chip shortages

In a nutshell: We all know about the pandemic-induced chip shortages causing industry-wide availability problems, but what does it mean for semiconductor makers? Money, and lots of it, according to a new report. Market intelligence firm International Data Corporation (IDC) writes that global semiconductor revenue in 2020 was up 10.8% YoY to $464 billion, despite the impact of Covid-19, and this year is going to be even better.

With the chip shortage problem reaching its zenith, one might imagine the industry would suffer in 2021, but the opposite is true. Massive growth from consumer, computing, 5G, and automotive semiconductors, combined with unprecedented demand and the adoption of more expensive chips, mean revenue is predicted to grow 12.5% this year to $522 billion.

It might not come as a surprise to learn that semiconductors in computing systems, including PCs and servers, outpaced the overall semiconductor market, growing 17.3% YoY to $160 billion in 2020. It’s forecast to jump another 7.7% to $173 billion in 2021. This is mostly due to demand for PC components skyrocketing while retail prices have increased.

Stay-at-home orders helped boost sales in the consumer semiconductor market, which covers game consoles, tablets, wireless headphones and earbuds, smart watches, and OTT streaming media devices. It grew 7.7% YoY to $60 billion.

“New gaming consoles from Microsoft and Sony, continued strong sales of wearables from Apple, and the rise in smart home networks managed by Amazon Alexa and Google Assistant will accelerate growth in 2021 to 8.9% year over year,” said Rudy Torrijos, research manager, Consumer Semiconductors.

Despite phone shipments falling 10% last year, handsets’ use of more expensive 5G components, along with the larger number of chips in each device, pushed revenue up 9.1%. The industry has rebounded this year, and IDC believes chip sales will increase 23.3% to $147 billion.

The first quarter of 2021 was a good one for phone makers

We know the problems chip shortage are causing automakers, something IDC believes will continue throughout the year, but semiconductor revenue is still forecast to grow 13.6% YoY.

“Overall, the semiconductor industry remains on track to deliver another strong year of growth as the super cycle that began at the end of 2019 strengthens this year,” said Mario Morales, program vice president, Semiconductors at IDC.

In other semiconductor news, we heard earlier today that crypto mining giant Bitmain has placed an order with TSMC for 5nm mining chips.