IDC: Semiconductor market continues to grow, may face overcapacity in 2023
The global semiconductor market will grow this calendar year by 17.3 percent compared to 2020. That is according to analyst firm IDC in a new report. IDC also expects overcapacity in the semiconductor manufacturing sector to emerge by 2023.
The IDC report states that growth in the chip sector this year will be driven by increased demand in several product groups, including smartphones, laptops, servers, automotive, smart home and networking equipment, gaming and wearables. Prices for dram and memory have also increased over the past year.
The analyst firm writes that semiconductor manufacturers are currently deploying almost 100 percent of their production capacity. According to the analyst firm, the shortage of chips should continue to decrease slightly in the coming quarter, as production capacity at semiconductor manufacturers is gradually expanded.
IDC expects that the supply and demand for chips should be ‘normalized and balanced’ again by mid-2022. By the end of that year, “large-scale capacity expansions” will come online at major semiconductor manufacturers, according to the analyst firm. Therefore, there could potentially be overcapacity in the chip sector in 2023.
The analyst firm also states that revenues from 5G semiconductors would grow by 128 percent, and revenues from smartphone chips would grow by 28.5 percent. The markets for consoles, smart home devices and wearables are also expected to grow by 34, 20 and 21 percent, respectively. The automotive chip sector will grow by 22.8 percent, IDC expects.
IDC further predicts that the semiconductor market will be worth a total of $600 billion by 2025, with a projected growth rate of 5.3 percent per year. That’s higher than the 3 to 4 percent growth IDC has seen in previous years.
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