Memory, auto-specific, and embedded MPUs expected to outpace total IC market growth this year.

IC Insights recently released its 2021 edition of The McClean Report.  The new analysis and forecast of the IC industry includes IC Insights’ ranking of IC product categories based on sales growth rate.  The listing projects the market growth rate for each of the 33 IC product categories defined by the World Semiconductor Trade Statistics (WSTS) organization.  The top-10 fastest growing IC segments forecast for this year are shown in Figure 1.

Each of the top-10 growing IC product categories is expected to see a double-digit increase in sales, but only the top-five segments are forecast to grow faster than the total IC market, which IC Insights projects will rise 12% this year.

Figure 1

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IC market forecast to log its second year in a row of double-digit growth to set a new all-time high.

IC Insights is pleased to now offer its 2021 edition of The McClean Report.  The McClean Report has become a staple of the IC industry, delivering timely, sound, and resourceful semiconductor market data and analysis since it was first published in 1997.  This 24th edition of The McClean Report features more than 400 pages and over 375 charts and figures.  A one-hour webcast covering some of the highlights of the new report is also now accessible for subscribers.

A comparison of several key McClean Report market metrics for 2020 and 2021 are shown below.

Throughout its history, the IC industry has experienced amazing highs and endured gut-wrenching lows. Nothing, however, has quite matched the challenge presented in 2020 when the Covid-19 coronavirus pandemic swept around the world.  The damaging impact on individuals as well as regional/global economies was evident early on. Yet, through it all, the total IC industry largely avoided the catastrophic sales decline seen in many other industries. Global IC sales increased 10% in 2020 fueled by demand for portable computers and powerful large-screen smartphones, which were used to access the Internet and cloud computing when the Covid-19 crisis was rapidly spreading.  Investment in expansion of data-center computers also gave IC sales a boost.

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Intel stays on top of research and development ranking, but its share of total industry R&D expenditures dipped after its spending decreased 4% in 2020.  AMD moved into the R&D top 10, says new report.

Research and development spending by semiconductor companies worldwide is forecast to grow 4% in 2021 to $71.4 billion after rising 5% in 2020 to a record high of $68.4 billion, according to IC Insights’ new 2021 edition of The McClean Report—A Complete Analysis and Forecast of the Integrated Circuit Industry.  Total R&D spending by semiconductor companies is expected to rise by a compound annual growth rate (CAGR) of 5.8% between 2021 and 2025 to $89.3 billion.

When the world was hit by the Covid-19 virus health crisis in 2020, wary semiconductor suppliers kept a lid on R&D spending increases, even though total semiconductor industry revenue grew by a surprising 8% in the year despite the economic fallout from the deadly pandemic.  Semiconductor R&D expenditures as a percentage of worldwide industry sales slipped to 14.2% in 2020 compared to 14.6% in 2019, when research and development spending declined 1% and total semiconductor revenue fell 12%.  Figure 1 plots semiconductor R&D spending levels and the spending-to-sales ratios over the past two decades and IC Insights’ forecast through 2025.

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IC Insights forecasts China-produced ICs will represent only 19.4% of its IC market in 2025, a fraction of the Made in China 2025 goal of 70%.

IC Insights will release its new 2021 McClean Report—A Complete Analysis and Forecast of the Integrated Circuit Industry later this month.  A portion of the new report will examine the IC market by region with an analysis and forecast of the China IC market by product type through 2025.

A very clear distinction should be made between the IC market in China and indigenous IC production in China. As IC Insights has oftentimes stated, although China has been the largest consuming country for ICs since 2005, it does not necessarily mean that large increases in IC production within China would immediately follow.  As shown in Figure 1, IC production in China represented 15.9% of its $143.4 billion IC market in 2020, up from 10.2% 10 years earlier in 2010.  Moreover, IC Insights forecasts that this share will increase by 3.5 percentage points from 2020 to 19.4% in 2025 (a 0.7 percentage point per year gain on average).
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