First three-year period of double-digit gains in 25 years, based on IC Insights’ forecast.

IC Insights has updated and released its comprehensive forecast and analysis of the worldwide semiconductor industry in its January Semiconductor Industry Flash Report, which is included as part of the 2022, 25th edition of The McClean Report service.

The report forecasts that the IC market will rise 11% this year following a strong 26% increase in 2021 and a 13% jump in 2020 (Figure 1).  If achieved, it would mark the first time in 25 years that the IC market has enjoyed three consecutive years of double-digit growth.  The previous time such an increase occurred was the four-year period from 1992-1995. Figure 1 highlights years when IC market growth exceeded 25%.

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The value of semiconductor content in electronic systems reached 33.2% last year, surpassing the previous record high set in 2018, says new 2022 report.

Historically, the driving force behind the higher average annual growth rate of the semiconductor industry as compared to the electronic systems market is the increasing value or content of semiconductors used in electronic systems (Figure 1).  With global unit shipment growth rates of cellphones, automobiles, and PCs showing maturity and slowing over the past 10 years, the disparity between the 3.5% 2011-2021 CAGR registered in the electronic systems market and 6.5% 2011-2021 CAGR displayed by the semiconductor market is directly due to the increasing content/value of semiconductors in electronic systems, according to the January Semiconductor Industry Flash Report that IC Insights will release this week as part of its 2022 McClean Report service.

Figure 1

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Above average increases are expected in all major product categories, which will lift the global market to record-high revenues in 2022 despite growth rates easing from last year’s economic rebound, says report.

Total semiconductor sales in 2022 are forecast to grow 11% and reach a record-high $680.6 billion after worldwide revenues climbed 25% in the 2021 economic rebound from the 2020 outbreak of the Covid-19 virus crisis, according to the January Semiconductor Industry Flash Report that IC Insights will release next week as part of its 2022 McClean Report service.  The Semiconductor Industry Flash Report shows the total semiconductor market growing at a low double-digit rate in 2022 (Figure 1).  Sales growth is expected to slow, but remain above average, in all major semiconductor product categories.

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AMD, NXP, and Analog Devices are expected to join the ranks of the “megasuppliers” in 2021.

IC Insights is updating its comprehensive forecasts and analyses of the IC industry for its 25th edition of The McClean Report, which will be released in January 2022.  Throughout next year, the report will include updated quarterly rankings of the worldwide top-25 semiconductor suppliers.

The 17 companies forecast to have worldwide semiconductor (IC and O-S-D—optoelectronic, sensor, and discrete) sales of >$10.0 billion in 2021 are shown in Figure 1.  Three semiconductor companies—AMD, NXP, and Analog Devices—are expected to join the noteworthy “megasuppliers” list in 2021.

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Foundries forecast to account for over one-third of semi capex spending this year. New factories and equipment for 7/5/3nm processes highlight growing dependence on foundry business model.

IC Insights is updating its comprehensive forecasts and analyses of the IC industry for its 25th edition of The McClean Report, which will be released in January 2022.  Included in the report is a historical review of capital spending and forecasted spending levels for several major IC product categories.

Worldwide semi capex is on track to surge 34% in 2021, its strongest percentage gain since a 41% increase in 2017.  The $152.0 billion in outlays this year would represent a new record high annual amount of spending, surpassing the previous high mark of $113.1 billion set just last year. Figure 1 shows a split of semiconductor capital spending by leading product segment for 2019 through 2021.

Figure 1

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At 26%, the 2021 IC market is forecast to log its highest growth rate since 2010.

IC Insights proudly celebrates its 25th anniversary by offering the 2022 edition of The McClean Report service. The McClean Report service begins with the Semiconductor Industry Flash Report, which will be released in January of next year, and will provide clients with IC Insights’ initial overview and annual forecast of the semiconductor industry for the upcoming year and through 2026.  In addition to the Flash Report, Quarterly Updates to the report will be released in February, May, August, and November of 2022.

Figure 1 shows the 1Q/4Q IC market direction indicator that IC Insights developed 24 years ago. The figure is labeled as a “direction indicator” because the actual 1Q/4Q change does not directly forecast the eventual annual IC market growth for a given year, but instead more accurately describes the expected direction and intensity of the annual IC market growth rate as compared to the previous year.  For example, 2017 showed 0% 1Q/4Q growth and 25% annual IC market growth, whereas 2011 displayed 1% 1Q/4Q growth but a full year IC market growth rate of only 1%, the difference being the 1Q/4Q change as compared to the previous year’s 1Q/4Q change.
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Big gains in artificial intelligence, machine learning, 5G infrastructure provide strong boost to sales growth at AMD, MediaTek, Nvidia, and Qualcomm this year; declines for Intel and Sony.

IC Insights’ November Update to The McClean Report was recently released.  Included in the update were several year-end forecasts for semiconductor sales, capex, and a ranking of top sales leaders. Among the data was IC Insights’ projected ranking of the top 25 semiconductor suppliers ranked by sales growth rate.

The semiconductor market is forecast to increase 23% this year, fueled by changing habits caused by the Covid-19 pandemic and the subsequent economic rebound from it in 2021.  A strong 20% increase in semiconductor unit shipments coupled with a 3% increase in the total semiconductor average selling price (ASP) is driving this growth.  An increase of 23% would be the largest gain in the global semiconductor market since 2010 when semiconductor sales soared 34% following the financial meltdown and global recession in 2008 and 2009.

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DRAM buyers cautious about placing significant orders; opting instead to keep inventory in check.

DRAM prices soared 41% through the first eight months of 2021, rising from $3.37 in January to $4.77 in August. September’s DRAM ASP slipped 3% to $4.62, which still was a 37% increase from the beginning of the year (Figure 1). Such a strong price increase and market rebound were expected in 2020 following a very difficult year in 2019 when the DRAM average selling price (ASP) fell 44%.  But major challenges—chief among them, the global Covid-19 pandemic—clouded and disrupted the market for DRAM in 2020.
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Tight supplies drive up prices and sales of many widely used parts in these market segments, but moderate growth in CMOS image sensors holds back upswing in optoelectronics, says Update.

A year after the deadly Covid-19 pandemic began in 2020 causing lockdowns worldwide and a deep global economic recession, sales of sensors, actuators, and discrete semiconductors are sharply higher in 2021 due to a resurgence in demand across many rebounding end-use markets and significant price increases for parts in short supply.  However, optoelectronics sales growth has been somewhat muted in 2021 by the lack of a surge in CMOS image sensors, partly because of trade frictions between the U.S. and China.

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Combined, China and Taiwan would hold about 37% of global IC capacity, almost 3x that of North America.

IC Insights’ October Update to The McClean Report, to be released later this month, draws upon information contained in its Global Wafer Capacity 2021-2025 report to discuss the current high tension environment between China and Taiwan and what it could mean for the IC industry.

In IC Insights’ opinion, healthy future global economic growth is increasingly dependent upon the continued introduction of advanced electronic systems.  The critical components within these systems are integrated circuits (ICs), without which, advanced electronic systems cannot be produced.

The ongoing trade conflict between the U.S. and China has intensified over the past couple of years. Crippling trade sanctions, especially with regard to IC technology, that the U.S. has imposed on Huawei, China’s largest electronics company, and to a lesser extent on SMIC, China’s largest indigenous IC foundry, has, in IC Insights’ opinion, caused China to question how it will be able compete in the future IC and electronics industries.  It is increasingly apparent that China’s answer to that question centers on its reunification with Taiwan.

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