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Growth Will Accelerate This Year Despite Market Shortages, According to IDC
Worldwide Semiconductor Revenue Grew 10.8% in 2020 to $464 Billion

Even though 2020 was a resilient year as far as mobile phone semiconductors were concerned, 2021 will be an important year for semiconductor vendors as 5G phones will spur the demand.

IDC forecasts mobile phone semiconductor revenues will grow by 23.3% in 2021 to $147 billion. Also, 2021 will be an especially important year for semiconductor vendors as 5G phones capture 34% of all mobile phone shipments while semiconductors for 5G phones will capture nearly two-thirds of the revenue in the segment.

“Mobile phone shipments fell by more than 10% in 2020, but mobile phone semiconductor revenues grew by 9.1% due to a shift to higher-priced 5G semiconductors, more memory per phone, sensors, and RF support for more spectrum bands,” said Phil Solis, research director for Connectivity and Smartphone Semiconductors.

Global lockdown

Despite the impact of Covid-19 on the global economy, the semiconductor market performed strongly in 2020. Demand by industry was uneven throughout the year due to global lockdowns, remote work and education, and shifts in consumer buying behavior.

Worldwide semiconductor revenue grew to $464 billion in 2020, an increase of 10.8% compared to 2019, according to the Semiconductor Applications Forecaster (SAF) from International Data Corporation (IDC).

IDC forecasts the semiconductor market will reach $522 billion in 2021, a 12.5% year-over-year growth rate. IDC anticipates continued robust growth in consumer, computing, 5G, and automotive semiconductors.

Supply constraints will continue through 2021. While shortages initially occurred in automotive semiconductors, the impact is being felt across the board in semiconductors manufactured at older technology nodes. Much like a traffic jam and the ripple effect, disruption on the semiconductor supply chain operating close to capacity will impact the supply chain.

Data, services

The industry will continue to struggle to rebalance across different industry segments, while investment in capacity now will improve the industry’s resiliency in a few years.

Looking forward to 2021, IDC sees continued strong growth in semiconductor sales worldwide as the adoption of cloud technologies and demand for data and services remain unchanged. Global fiscal and monetary policy remain accommodative and will provide a tailwind for continued capital investments in long-term infrastructure.

The market for semiconductors in Computing systems, such as PCs and servers, outpaced the overall semiconductor market, growing 17.3% year over year to $160 billion in 2020. “Demand for PC processors remains strong, especially in value-oriented segments,” said Shane Rau, research vice president, Computing Semiconductors. “The PC processors market looks strong through the first half and likely the whole year.”

Game consoles

IDC forecasts Computing systems revenues will grow 7.7% to $173 billion in 2021. The Consumer semiconductor market segment rebounded in 2020. Robust sales of game consoles, tablets, wireless headphones and earbuds, smartwatches, and OTT streaming media devices fueled segment growth by 7.7% year over year to $60 billion.

Consumer Semiconductors research manager Rudy Torrijos sID Apple, AMD, and Intel showed exceptional growth as consumers upgraded their digital spaces at home.

“New gaming consoles from Microsoft and Sony, continued strong sales of wearables from Apple, and the rise in smart home networks managed by Amazon Alexa and Google Assistant will accelerate growth in 2021 to 8.9% year over year,” said Rudy Torrijos.

Automotive semiconductor

For 2021, IDC forecasts that automotive semiconductor revenue will grow 13.6%. According to automotive semiconductor research manager Nina Turner, automotive sales recovered in the second half of 2020.

“But the supply constraints for the automotive semiconductor market for some products will last through 2021 as fires and fab shutdowns further impacted the automotive semiconductor market and it takes time for chips to move through the automotive ecosystem, specifically in the U.S. and Europe,” said Nina Turner.

IDC Semiconductors programme vice president Mario Morales said overall the semiconductor industry remains on track to deliver another strong year of growth as the supercycle that began at the end of 2019 strengthens this year.

Supply-side research

“The markets remain narrowly focused on shortages across specific sectors of the supply chain, but what is more important to emphasize is how critical semiconductors are to every major system category and content growth that remains unabated,” said Mario Morales.

The IDC Worldwide Semiconductor Applications Forecaster (SAF) database serves as the basis for IDC’s semiconductor supply-side research, including our market forecasts and custom market models. This database contains revenue data collected from over 150 of the top semiconductor companies for 2015-2020 and forecasts for 2021-2025.

Revenue for over twenty semiconductor device areas, five geographic regions, seven industry segments, and more than 65 end-device applications are included in the database and pivot tables. For more information about the SAF, please contact Nina Turner at nturner@idc.com.

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