IDC: Worldwide semiconductor growth to accelerate this year
KUCHING: Despite the impact of Covid-19 on the global economy, the semiconductor market performed strongly in 2020.
Demand by industry was uneven throughout the year due to global lockdowns, remote work and education, and shifts in consumer buying behaviour.
Worldwide semiconductor revenue grew to US$464 billion in 2020, an increase of 10.8 per cent compared to 2019, according to the Semiconductor Applications Forecaster (SAF) from International Data Corporation (IDC). IDC forecasts the semiconductor market will reach US$522 billion in 2021, a 12.5 per cent year-over-year growth rate. IDC anticipates continued robust growth in consumer, computing, 5G, and automotive semiconductors.
However, supply constraints will continue through 2021.
IDC said, while shortages initially occurred in automotive semiconductors, the impact is being felt across the board in semiconductors manufactured at older technology nodes.
It said, the industry would continue to struggle to rebalance across different industry segments, while investment in capacity now will improve the industry’s resiliency in a few years.
Looking forward to 2021, IDC sees continued strong growth in semiconductor sales worldwide as adoption of cloud technologies and demand for data and services remain unchanged. Global fiscal and monetary policy remain accommodative and will provide a tailwind for continued capital investments in long term infrastructure.
The market for semiconductors in computing systems, such as PCs and servers, outpaced the overall semiconductor market, growing 17.3 per cent year over year to US$160 billion in 2020.
Growth in mobile phone semiconductors was also resilient in 2020.
“2021 will be an especially important year for semiconductor vendors as 5G phones capture 34 per cent of all mobile phone shipments while semiconductors for 5G phones will capture nearly two thirds of the revenue in the segment,” IDC forecasts.
IDC expected mobile phone semiconductor revenues will grow by 23.3 per cent in 2021 to US$147 billion.
The consumer semiconductor market segment rebounded in 2020. Robust sales of game consoles, tablets, wireless headphones and earbuds, smart watches, and OTT streaming media devices fuelled segment growth by 7.7 per cent year over year to US$60 billion.
“Apple, AMD, and Intel showed exceptional growth as consumers upgraded their digital spaces at home,” said IDC Consumer Semiconductors research manager Rudy Torrijos.
“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 per cent year over year.”
For 2021, IDC forecasts that automotive semiconductor revenue will grow 13.6 per cent.
“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 IDC Semiconductors programme vice president Mario Morales.
“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.”