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Research from International Data Corporation (IDC) says sales increased almost 11% between 2019 and 2020, with growth expected to continue
The coronavirus has thrown many a market into chaos over the past and a half, and the semiconductor supply chain is no exception. With demand initially slumping during the early stages of global lockdowns, we have since seen demand skyrocket, so much so that the foundries are struggling to keep up.
Given the slow moving nature of the semiconductor industry and the difficulties related to increasing production, the resulting chip shortage is expected to continue for many months, perhaps even as long as two years.
But despite the disruption the industry has suffered over the past year, new data from market intelligence firm IDC suggests that global semiconductor revenue still grew 10.8% in 2020 compared to 2019, reaching $464 billion. Furthermore, the growth rate is expected to increase even further in 2021, with IDC forecasting revenues of $522 billion, a 12.5% year-over-year growth rate.
According to IDC, this growth will be fuelled by “robust growth in consumer, computing, 5G, and automotive semiconductors”.
The research noted that the growth in computing systems, such as PCs and servers, outpaced the overall semiconductor market, growing 17.3% year over year to $160 billion in 2020.
However, it was perhaps the mobile phone semiconductor market that was more interesting. Despite overall device shipments falling significantly during 2020, semiconductor revenues related to this market still grew as a result of the demand for newer, more expensive chips. 5G is becoming a clear driving force.
"Mobile phone shipments fell by more than ten percent in 2020, but mobile phone semiconductor revenues grew by 9.1% due to a shift to higher priced 5G semiconductors, more memory per phone, sensors, and RF support for more spectrum bands," said Phil Solis, IDC’s research director for Connectivity and Smartphone Semiconductors. "2021 will be an especially important year for semiconductor vendors as 5G phones capture 34% of all mobile phone shipments while semiconductors for 5G phones will capture nearly two thirds of the revenue in the segment."
It has become very clear over the past year is that the semiconductor industry is an integral and often overlooked part of our increasingly connected world and disruption here can have major ramifications. Nonetheless, the digitalisation spurred by the pandemic is showing no signs of slowing and the semiconductor industry will be at its heart.
“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. "The markets remain narrowly focused on shortages across specific sectors of the supply chain, but what is more important to emphasize is how critical semiconductors are to every major system category and content growth that remains unabated."
At the same time, chip technology itself continues to advance at a staggering pace. Just yesterday, IBM announced a major breakthrough, demonstrating a 2nm complementary metal-oxide-semiconductor (CMOS) process etching a real chip on a standard 300 millimetre silicon wafer. This test chip can reportedly improve performance by 45% compared to current 7nm chips, as well as using 75% less energy.
In practice, this could mean quadrupling the battery life for your mobile phone and powering AI to perform even more complex tasks.
"This can be considered as a breakthrough," said Peter Rudden, research director at IDC. "We have seen semiconductor manufacturers moving from 14nm to 10nm to 7nm, with 7nm being a real challenge for some.”
"This also sends a message to the IT industry that IBM continues to be a hardware research powerhouse," he added
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