/Semiconductor market to grow by 17.3% in 2021 and reach potential overcapacity by 2023: IDC

Semiconductor market to grow by 17.3% in 2021 and reach potential overcapacity by 2023: IDC

The semiconductor market is expected to grow by 17.3% in 2021 in comparison to 10.8% in 2020. According to IDC, the industry will see normalization and balance by the middle of 2022, with a potential for overcapacity in 2023 as larger scale capacity expansions begin to come online towards the end of 2022.

Growth is driven by mobile phones, notebooks, servers, automotive, smart home, gaming, wearables, and Wi-Fi access points, with increased memory pricing. IC shortages are also expected to continue easing through 4Q21 as capacity additions accelerate.

“The semiconductor content story is intact and not only does it benefit the semiconductor companies, but the unit volume growth in many of the markets that they serve will also continue to drive very good growth for the semiconductor market,” said Mario Morales, Group Vice President, Enabling Technologies and Semiconductors at IDC.

Semiconductor-Market-Overview-2021-IDC

Despite the current COVID-19 wave, consumption remains healthy. IDC reports that dedicated foundries have been allocated for the rest of the year, with capacity utilization at nearly 100%. Front-end capacity remains tight but fabless suppliers are getting the production they need from their foundry partner. Front-end manufacturing is starting to meet demand in 3Q, however, larger issues and shortages will remain in back-end manufacturing and materials.

According to IDC, 5G semiconductor revenues will increase by 128%, with total mobile phone semiconductors expected to grow by 28.5%. Game consoles, smart home, and wearables will grow +34%, 20%, 21% respectively. Automotive semiconductor revenues will also increase by 22.8% as shortages are mitigated by year end. Notebook semiconductor revenues will grow by 11.8%, while X86 Server semi revenues will increase by 24.6%.

Semiconductor wafer prices increased in 1H21 and IDC expects increases to continue for the rest of 2021 due to material costs and opportunity cost in mature process technologies.

Overall, IDC predicts the semiconductor market to reach $600 billion by 2025 – representing a CAGR of 5.3% through the forecast period. This is higher than the typical 3-4% mature growth seen historically.

Ramesh has over 12 years of experience in different departments of journalism. Having a strong nose for news, he has worked with The Times of India, Hindustan Times, Delhi Press, News Wire Service and Governance Today in different capacities. He is a Delhi University graduate and an alumnus of Bharatiya Vidya Bhavan, Delhi, and St. Xavier's School, Muzaffarpur. He loves writing over issues of social relevance. His craving for smart technology brought him to My Mobile where he has grown up to be a tech journo.

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