The global semiconductor shortage is real. IDC is predicting that the market will grow 17.3 percent this year, compared to 10.8 percent in 2020.
However, the research firm expects the industry to normalise by the middle of 2022 with potential overcapacity the following year as larger scale capacity expansions come online towards end 2022.
Fuelling the current shortage are demands for mobile phones, notebooks, servers, automotive, smart home, gaming, wearables, Wi-Fi access points, and other smart devices.
“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,” said Mario Morales, Group Vice President of Enabling Technologies and Semiconductors at IDC.
Semiconductor wafer prices increased in the first half of 2021 and further hikes are expected for the rest of 2021 due to material costs and opportunity cost in mature process technologies.
IDC predicts the semiconductor market to reach US$600 billion by 2025, a compound annual growth rate of 5.3 percent.