The global demand for semiconductors is on the rise, and despite the pandemic and other influencing factors, global semiconductor sales touched $439 billion in 2020. This is an increase of 6.5 percent over the year 2019, where sales figured around $412.3 billion, Semiconductor Industry Association (SIA) that represents 98 percent of the US semiconductor industry by revenue and around two-thirds of non-United States chip firms, has stated.
“Global semiconductor sales increased moderately on an annual basis in 2020, weathering a challenging macroeconomic environment brought on by the pandemic and other factors,” John Neuffer, SIA president and CEO, has stated in a release by the SIA.
Neuffer has cautioned that despite the rise in demand for semiconductors, the share of the US in global chip production has dipped over the years. In 1990, the US alone catered 37 percent of the global market. At present, this share is down to 12 percent. “While global demand for semiconductors is on the rise, the share of global chip production done in the US has declined from 37 percent in 1990 to 12 percent today, and that disparity will only intensify without US government action to level the global playing field,” he added.
The consistency and growth in demand for semiconductors, despite the pandemic affecting businesses globally, is definitely deriving strength from the demand for electronics devices. “The pandemic has surged the demand for electronics devices for connectivity and staying productive. This pushed growth in semiconductor sales as well, which usually grows 3.5 percent to 4.5 percent, annually,” Faisal Kawoosa, founder & chief analyst, techARC told The Electronics.
Semiconductors are a vital component for different types of electronics. The application finds a place in electrical appliances like refrigerators and washing machines. Devices like smartphones, personal computers, and digital cameras also use semiconductors. Semiconductors also find application in the automobile sector and other industrial products.
Could the pandemic-induced demand for certain electronics have also been playing a part in the global demand for semiconductors? “I think one of the reasons is a surge in demand across various segments – ex consumer electronics like Notebooks, Tablets, Desktops, along with a surge in rising of cloud computing and semiconductor content within data centers.
“Additionally, the resilient nature of consumer electronics especially smartphones and demand in 2H 2020 lead to the increased YoY adoption. Remote working, e-learning and other use cases were some of the drivers for increased sales of devices,” Tarun Pathak, associate director, Counterpoint Research, told The Electronics.
As a manufacturing base, the Chinese market consumed the most semiconductors with sales reaching $151.7 billion in 2020. The annual sales in Asia Pacific and regions (other than Americas, Japan, Europe, China) witnessed a modest growth of 5.3 percent during the year.
Among the several semiconductor categories – logic memory, micro-ICs, non-memory products – logic ($117.5 billion) and memory ($117.3 billion) registered the highest sales. In the micro-ICs category, which includes microprocessors, sales in 2020 jumped 4.8 percent to $69.6 billion.
For the domestic electronics market, the demand for semiconductors is likely to witness steady growth over the next few years. Indian electronics manufacturing, despite having increased, is highly dependent on imported components. The urge now is to have semiconductor manufacturing facilities in India itself.