Semiconductor market to grow 13% in 2021 despite global chip shortage

Semiconductor market to grow 13% in 2021 despite global chip shortage

Worldwide semiconductor revenue grew 10.8% in the year to USD 464 billion in 2020, despite the impact of COVID-19 on the global economy, according to the Semiconductor Applications Forecaster (SAF) from International Data Corporation (IDC).

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.

There will be growth in semiconductor sales worldwide as the adoption of cloud technologies and demand for data and services remain unchanged. Global fiscal and monetary policy remains accommodative and will provide a tailwind for continued capital investments in long-term infrastructure.

Growth in Mobile Phone semiconductors was resilient in 2020. "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, 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," Solis added.

IDC forecasts mobile phone semiconductor revenues will grow by 23.3% in 2021 to $147 billion.

Supply constraints will continue through 2021. While shortages occurred in automotive semiconductors in the initial phase, the impact is being felt across the board in semiconductors manufactured at older technology nodes.

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. "Demand for PC processors remains strong, especially in value-oriented segments," said Shane Rau, research vice president, Computing Semiconductors. "The PC processors market looks strong through the first half and likely the whole year." IDC forecasts Computing systems revenues will grow 7.7% to $173 billion in 2021.