Semiconductor sales are expected to return to a more realistic growth path this year after a record high in 2021, analyst house IC Insights said in a study released this month.
Chip sales are expected will reach a record $ 680.6 billion (£ 500 billion) in 2022, up 11% from 2021. Integrated circuit revenue is expected to total $ 565.1 billion (£ 415 billion), up 11% year-on-year, and OSD – optoelectronics, sensors / actuators and discrete components – are expected to reach $ 115 billion (£ 85 billion), also up 11%.
Growth rates will be slower than last year, when chip sales increased 25% from 2020, analysts said.
The electrification of cars and the changes associated with the pandemic, especially the demand for computers and other electronic devices as people depend more than ever on internet technology and services, will bring stability to a market of otherwise volatile semiconductors, Nathan Brookwood, analyst at Insight 64, told The register.
Demand for GPUs increased during the pandemic as people searched for new forms of entertainment while locked away at home, said Dean McCarron, president of Mercury Research. The register.
There is now a GPU shortage, with hoarding cards from crypto miners and scalpers, selling for almost three to four times the normal price. Nvidia and AMD expect GPU supplies to improve in the second half of this year.
The chip shortage will persist until 2023, but will be less severe, Deloitte said in its year-end technology study. Chip shortages cost Apple $ 6 billion in revenue in the last fiscal quarter of 2021.
Demand will also be driven by artificial intelligence, cloud and data centers, healthcare and automotive applications, said Duncan Stewart, research director for technology, media and telecommunications at Deloitte. The register.
“Every end-market for semiconductors is growing, and growing as fast or faster than ever,” said Stewart.
The average car in 2010 contained $ 300 worth of microchips, and that figure will likely rise to over $ 500 by 2022, Deloitte estimated.
The consulting giant predicts that the semiconductor market in 2022 will exceed $ 600 billion for the first time, up from $ 412 billion in 2019.
A shortage of low-cost chips such as power management ICs – which are essential for electric cars – has worsened and halted vehicle production. Other inexpensive chips such as display drivers and USB-C controllers are expected to reduce personal computer shipments this year.
Everyone was clamoring for the same parts in 2021, and chip factories were running low on capacity. New factories are coming online and will be better able to supply the market, said Brian Matas, vice president of market research at IC Insights. The register.
“It helps alleviate some of the price pressure,” said Matas.
DRAM vendors have been running out of capacity this year, although new and modernized factories brought online in the second half of 2022 may ease the load, Matas said.
The unpredictable nature of the coronavirus remains a wild card for how the semiconductor market will play out this year, Matas said.
A COVID-19 outbreak last month in Xi’an, China, forced Micron and Samsung to scale back operations at DRAM facilities after the city was locked down. This had a short-term impact on Micron’s DRAM supply, although the company hopes to resume normal operations in the city by the end of the month.
The volatile nature of the semiconductor market has persisted despite consolidation, said Matas. Fewer chip companies are providing physical coins, although that hasn’t removed the expense and capacity craziness, which causes volatility.
The hot-cold nature of the semiconductor market is evidenced by the DRAM and Flash industry, which is the largest segment. DRAM market collapsed in 2019 after demand from mega-data center builders cooled and rebounded last year from pandemic demand for IT equipment, according to IC Insights.
Chipmakers usually adapt their factories to make products that are in demand. Samsung in 2020 converted lines producing DRAM to manufacture CMOS image sensors due to the increasing demand for cameras and other visual equipment.
With the help of governments, Intel, TSMC, Globalfoundries and Samsung are investing billions of dollars in factories around the world. Major chipmakers are also spending a lot of money to secure chip supply with multi-year agreements. At the end of December, AMD extended its wafer supply agreement with GlobalFoundries to $ 2.1 billion until 2025, an increase of $ 1.6 billion until 2024. ®