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Chip revenue bullish in 2022

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Driven in part by 5G phones, International Data Corporation (IDC) stated worldwide semiconductor revenue was projected to grow 13.7 per cent over last year despite ongoing supply chain constraints and lockdowns in China.

In its latest report on semiconductor technology and supply chains, IDC projected revenue for this year would reach $661 billion on the heels of last year’s $582 billion.

In addition to 5G phones, the leading growth applications in 2021 were game consoles, wireless access points, data centers, and wearables.

IDC’s research indicated those same applications would see continued growth this year, but at a slower rate as consumer-facing markets start to slow down by the fourth quarter.

Markets served by mature process nodes saw the biggest impact from semiconductor supply constraints in 2021 as some manufacturers slowed down their production lines or held off on rolling out new features and products.

In turn, those shortages increased the average selling prices (ASPs) as demand has grown across most device applications over the past few years.

Thanks to a substantial increase in memory sales, Samsung surpassed Intel for the top spot in semiconductor revenues. Samsung posted almost $76 billion in revenue last year compared to close to $58 billion the previous year for a 31 per cent yearly increase.

The top five companies also included SK Hynix, Qualcomm, and Micron.In 2021, the top 10 companies accounted for 58 per cent of the total semiconductor market while the top 20 companies held 76 per cent of the market, up from 57 per cent and 75 per cent, respectively, in 2020.

IDC cited inflation, shutdowns in China and the impact of the Ukraine-Russia war as challenges that could lead to headwinds in the semiconductor sector this year.

Despite those challenges, IDC forecast continued resilience in semiconductor sales worldwide led by secular growth across the cloud, network infrastructure, and automotive markets.

IDC forecast the five-year compound annual growth rate (CAGR) from 2021-2026 would grow by almost five per cent.

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