Worldwide semiconductor market set to reach $522b by 2021
The worldwide semiconductor market is continuing to grow, despite the challenges of recent months.
Demand by industry was uneven throughout 2020 due to global lockdowns, remote work and education, and shifts in consumer buying behaviour.
However, overall the semiconductor market performed strongly.
According to IDC’s Semiconductor Applications Forecaster (SAF), worldwide semiconductor revenue grew to $464 billion in 2020, an increase of 10.8% compared to 2019.
Furthermore, IDC forecasts the semiconductor market will reach $522 billion in 2021, a 12.5% year-over-year growth rate.
IDC anticipates continued robust growth in consumer, computing, 5G, and automotive semiconductors.
Supply constraints and continued investment
The analysts find supply constraints will continue through 2021. While shortages initially occurred in automotive semiconductors, the impact is being felt across the board in semiconductors manufactured at older technology nodes.
IDC states that a disruption on the semiconductor supply chain operating close to capacity will impact across the supply chain.
The industry will 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 analysts find.
Computing systems continues to dominate
The market for semiconductors in computing systems, such as PCs and servers, outpaced the overall semiconductor market, growing 17.3% year over year to $160 billion in 2020.
The analysts forecase computing systems revenues will grow 7.7% to $173 billion in 2021.
IDC research vice president for computing semiconductors Shane Rau says, "Demand for PC processors remains strong, especially in value-oriented segments.
"The PC processors market looks strong through the first half and likely the whole year."
Mobile phone sales drive demand
Growth in Mobile Phone semiconductors was resilient in 2020, according to IDC.
In fact, the analysts forecast mobile phone semiconductor revenues to grow by 23.3% in 2021 to $147 billion.
IDC research director for connectivity and smartphone semiconductors Phil Solis says, "Mobile phone shipments fell by more than 10% 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.
"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."
Consumer market pushes overall growth
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% year over year to $60 billion.
IDC research manager consumer semiconductors Rudy Torrijos says, "Apple, AMD, and Intel showed exceptional growth as consumers upgraded their digital spaces at home.
"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."
IDC program vice president semiconductors Mario Morales says, "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.
"The markets remain narrowly focused on shortages across specific sectors of the supply chain, but what is more important to emphasise is how critical semiconductors are to every major system category and content growth that remains unabated."