What you need to know
- The semiconductor market is expected to grow to $522 billion in 2021.
- Despite the global semiconductor shortage, revenues are expected to increase year-over-year by 12.5%.
- In some industries, total shipments of semiconductors are down, but revenues have increased.
In news that likely won't surprise anyone, semiconductor revenue is expected to increase this year. The latest forecast from IDC states that the semiconductor market will reach $522 billion in 2021, which would mark a 12.5% year-over-year growth rate. IDC expects the consumer, computing, 5G, and automotive markets to drive the growth in the semiconductor market.
The global semiconductor shortage has made headlines for over a year, but that shortage doesn't mean that manufacturers aren't selling semiconductors. If anything, the shortage of semiconductors is an indicator of growing demand, since all manufacturers are racing to make as many semiconductors as possible.
"The PC processors market looks strong through the first half and likely the whole year," says Shane Rau, research vice president, Computing Semiconductors. "Demand for PC processors remains strong, especially in value-oriented segments."
Even if areas in which the total number of devices sold dipped, manufacturers are still making money. Despite the fact that mobile phone shipments fell by more than 10 percent in 2020, mobile phone semiconductor revenues reportedly grew 9.1%. This is due to "higher priced 5G semiconductors, more memory per phone, sensors, and RF support for more spectrum bands," according to Phil Solis, research director for Connectivity and Smartphone Semiconductors.
Demand for semiconductors remains high. Stories like the best graphics cards being out of stock and people not being able to purchase an Xbox Series X or Xbox Series S make the rounds frequently, but semiconductors are used in millions of devices across a wide range of industries.
IDC expects supply constraints to continue through 2021, as do NVIDIA and TSMC.
