By sector, the industrial and automotive sectors were the strongest drivers of demand in 2021, with year-over-year growth of 30.2% and 26.7%, respectively. 5G phones, gaming consoles, wireless access points, data centers, and wearables led the growth in the chip market, which is expected to grow more moderately in 2022, as IDC anticipates a slowdown in consumer-oriented markets during the fourth quarter of the year.
Chip shortages will persist until the end of the year and into early 2023, and although demand is expected to be met in the third quarter of 2022 with the first phase of production, both production and the supply chain are extending lead times.
The most affected by semiconductor supply constraints were end-user markets, which slowed down their production lines or the introduction of new products and features. Furthermore, in the last two years, shortages and increased demand in most device applications, also driven by the cloud, network infrastructure and automotive markets, led to a rise in average selling prices (ASP).
With sales of $75.8 billion in 2021, significantly higher than the $57.7 billion of 2020, and a year-over-year increase of 31.1% in revenue, Samsung overtook Intel as the leading semiconductor company. Intel, along with SK Hynix, Qualcomm, and Micron, occupy the top five positions globally in sales.
IDC tracks approximately 200 suppliers and has observed that more than 120 companies experienced growth rates exceeding 20% in 2021. Regarding the memory market, analysts forecast growth of 18% for DRAM and 26% for flash memory in 2022, despite anticipated price declines this year.
“The semiconductor industry had an extremely strong year of growth in 2021, but shortages and tight inventories persist in some semiconductor markets. The global nature of the semiconductor industry continues to be impacted by COVID-19 and regional lockdowns, but we reiterate our outlook for positive growth in 2022. In the longer term, new factories and investment announcements will add significant capacity and could increase the risk of overcapacity beyond 2023,” said Nina Turner, research director for Semiconductors at IDC.
“Overall, the semiconductor industry is on track for another very positive year of growth, continuing the momentum from 2020,” said Mario Morales, group vice president for Semiconductors at IDC. "Financial and systems markets are closely monitoring shortages in specific sectors of the supply chain, but more importantly, semiconductors are critical to each of the major systems categories, so the growth in chip demand will not slow down over the next five to seven years."
According to IDC, the global economy will be affected by inflation and the fiscal policies implemented to address it, as well as the shutdowns in China and the impact of the conflict between Ukraine and Russia. With the easing of restrictions and the reopening of Shanghai at the end of June, along with stimulus policies to revive the economies of locked-down cities, the Chinese economy could recover moderately in the second half of 2022.
