The global semiconductor market is expected to grow 17.3% in 2021 as compared to 10.8% in the previous calendar year, IDC said on Wednesday.
According to the research firm, the growth of the market is being driven by increased demand for mobile phones, notebooks, servers, automotive, smart home, gaming, wearables, and Wi-Fi access points as well as rising memory pricing.
5G semiconductor revenues will increase by 128% in 2021, with total mobile phone semiconductors expected to grow by 28.5%. Meanwhile, game consoles, smart home, and wearable semiconductors will see 34%, 20%, 21% growth in revenue and automotive and notebook semiconductor revenues will increase by 22.8% and 11.8%, respectively.
Manufacturers have allocated dedicated foundries 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 third quarter but larger issues and shortages will remain in back-end manufacturing and materials.
The market is expected to see normalization and balance by the middle of 2022, but 2023 could bring overcapacity as larger scale capacity additions will begin to come online by the end of 2022, IDC added.
By 2025, the industry will reach $600 billion, with a CAGR of 5.3% through the forecast period. This would be higher than the typical 3-4% mature growth seen historically.
“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,” Mario Morales, Group Vice President, Enabling Technologies and Semiconductors at IDC, said.