China Daily (Hong Kong)

IDC sees chip sector recovery as revenue up

- By MA SI

Revenue of the global semiconduc­tor market is forecast to grow by 17.3 percent this year versus 10.8 percent in 2020, according to a report from Internatio­nal Data Corp, a market research company.

Growth of pricier chips with higher memory is driven by their wider use in mobile phones, notebooks, servers, automobile­s, smart homes, gaming, wearables, and Wi-Fi access points, IDC said.

It also forecast the semiconduc­tor industry will see normalizat­ion and restore balance by the middle of 2022, with a potential for overcapaci­ty in 2023 as larger-scale capacity expansions are expected toward the end of 2022.

That could mean the current shortages of integrated circuits, or ICs, are also expected to continue easing through the fourth quarter of this year, with the accelerate­d expansion of production capacities.

IDC also predicted the semiconduc­tor market will reach $600 billion by 2025, with compound annual growth rate of 5.3 percent from this year through 2025. This is higher than the typical 3-4 percent mature growth seen historical­ly, it said.

Mario Morales, group vice-president of enabling technologi­es and semiconduc­tors at IDC, said in a research note the semiconduc­tor content story is intact. It will benefit the semiconduc­tor companies; but, the volume growth in many of the markets that they serve will also continue to drive high growth.

According to IDC, despite the COVID-19 pandemic, consumptio­n remains healthy. The global revenue of 5G semiconduc­tors is forecast to increase by 128 percent yearon-year this year, with total mobile phone semiconduc­tors expected to grow by 28.5 percent.

Game consoles, smart home, and wearables will grow 34 percent, 20 percent, and 21 percent, respective­ly, this year. Automotive semiconduc­tor revenues will also increase by 22.8 percent year-on-year as shortages are expected to be mitigated by the end of this year, IDC forecast.

Amid the current shortage of chips, many semiconduc­tor companies are beefing up their efforts to build new production capacities.

For instance, last week, German chipmaker Infineon Technologi­es AG opened its high-tech, 300-millimeter wafers factory for power electronic­s at its Villach site in Austria.

At 1.6 billion euros ($1.88 billion),

the investment made by the semiconduc­tor group represents one of the largest such projects in the microelect­ronics sector in Europe.

Reinhard Ploss, CEO of Infineon, said in a statement: “The timing to create new capacity in Europe

could not be better, given the growing global demand for power semiconduc­tors. The last few months have clearly shown how essential microelect­ronics are in virtually every area of life.

“Given the accelerate­d pace of digitaliza­tion and electrific­ation,

we expect demand for power semiconduc­tors to continue to grow in the coming years.”

Fu Liang, an independen­t technology analyst, said as chip shortages ease, many industries like automotive, smartphone­s and personal computers will benefit.

 ?? ZHANG DAGANG / FOR CHINA DAILY ?? An employee works on the chip production line of a semiconduc­tor company in Maanshan, Anhui province.
ZHANG DAGANG / FOR CHINA DAILY An employee works on the chip production line of a semiconduc­tor company in Maanshan, Anhui province.

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