Many forecasters said that the Covid-19 pandemic would hurt semiconductor sales in 2020 but were forced to change their position. IDC observes that demand from customers was uneven through the year due to global lockdowns, remote work and education, and shifts in consumer buying behavior. However, despite that the market grew 10.8 percent compared to 2019 to achieve a value of $464 billion in 2020, IDC reckons.
IDC now forecasts that 2021 will show annual growth of 12.5 percent to take the market to $522 billion. There will be robust growth in consumer, computing, 5G, and automotive semiconductors. It should be noted that there are supply constraints in multiple but that this provides an opportunity for unit price inflation to increase the market value.
IDC's estimate is in-line with Malcolm Penn's "goldilocks" forecast of $520 billion for the chip market in 2021. Penn provides a market value range of between $490 billion and $547 billion (see V-shaped pandemic sets up chip shortages, rising prices in 2021 ).]
However, these estimates are higher than the most recent prediction from World Semiconductor Trade Statistics (WSTS) which said the global chip market will grow from $440 billion in 2020 by 10.7 percent to reach $488 billion in 2021. WSTS expects the market to be driven by rebounding markets for sensors (16.8 percent increase), analog (15.2 percent) and logic (13.0 percent).
IDC said that the semiconductor shortages that first manifested in automotive in 2020 are now rippling across all other application sectors as the supply chain struggles to rebalance itself. Investment in capacity now takes multiple quarters to have an impact.
Market demand remains high: the PC and smartphone processor markets look set to remain so for the entire year. "2021 will be an especially important year for semiconductor vendors as 5G phones capture 34 percentof all mobile phone shipments while semiconductors for 5G phones will capture nearly two thirds of the revenue