Chip market's rise in 2020 overturns Gartner's forecast

January 17, 2021 // By Peter Clarke
Chip market's rise in 2020 overturns Gartner's forecast
The global chip market grew by 7.3 percent in 2020, according to Gartner, in contrast to the market analyst's earlier prediction that the market would fall due to the Covid-19 pandemic.

The 2020 market ended up being worth $449.8 billion in 2020 with the top ten chip vendors responsible for 56 percent of the market, Gartnet said in preliminary figures and ranking for the year.

Back in April 2020 Gartner said the chip market would fall by 0.9 percent wiping out a previous forecast of 12.5 growth for the market (see Covid-19 will wipe out chip market growth in 2020, says Gartner and Chip market declined 12% in 2019, says Gartner).

"In early 2020, the expectation was that Covid-19 would have a negative impact across all end equipment markets, but the actual effect was more nuanced," said Andrew Norwood, research vice president at Gartner, in a statement. "Automotive, industrial and some areas of the consumer market were hit hard by reduced enterprise and consumer spending. However, lockdowns vastly increased work from home and e-learning, and any markets that facilitated those activities benefited."

Top 10 semiconductor vendors by worldwide revenue in 2020 (Millions of U.S. Dollars). Source: Gartner.

Server demand was strong as data centers rushed to add capacity and there was strong demand for PCs from enterprise and consumers due to increased work and study from home, said Norwood. The latter led to strong sales of processors, NAND flash and DRAM component.

One consequence was that Intel retained its position as the first ranked global semiconductor vendor by revenue in 2020, followed by Samsung Electronics, SK Hynix and Micron. However, Intel's semiconductor revenue grew 3.7 percent a low number only underachieved by Texas Instruments and Broadcom who are relatively more exposed to the industrial markets.

Despite a slowdown in the overall smartphone market, strong sales of 5G smartphones helped Qualcomm and MediaTek achieve strong growth in 2020.

However, the memory sector was the best performing component category in 2020, driven by processor sales into servers and personal computers. Within memory, NAND flash experienced the best performance with revenue growth of 23.9 percent, reaching $52.8 billion.

Related links and articles:

www.gartner.com

News articles:

Covid-19 will wipe out chip market growth in 2020, says Gartner

Nvidia, AMD rise in chip market ranking, lacklustre Intel stays top

Chip market declined 12% in 2019, says Gartner


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