IDC has published a study that shows the semiconductor market is expected to stabilize by mid-2022, potentially reaching overcapacity in 2023.
As the larger scale capacity expansion takes hold towards the end of 2022, production could exceed demand.
The chip shortage had far-reaching ramifications, with several companies saying it had an impact on their FY21 results. Intel had previously said it could go on for years and TSMC, among others, would raise prices.
IDC’s statement mirrors research from Gartner earlier this year indicating that the shortage would end by mid-2022.
In terms of demand, IDC said the 2021 market is expected to grow 17.3% in 2021, surpassing the 10.8% growth in 2020.
He also predicted that the global semiconductor market will experience a high CAGR of 5.3% to reach $ 600 billion by 2025.
This growth is driven by mobile phones, laptops, servers, automotive, smart home, games, portable devices and Wi-Fi hotspots.
Integrated circuit (IC) shortages are also expected to ease towards the end of 2021 due to accelerating capacity additions.
“The history of semiconductor content is intact and not only benefits semiconductor companies, but unit volume growth in many of the markets they serve will also continue to generate very good growth for the semiconductor market. -conductors, ”IDC said. Enabling Technologies and Semiconductors Group Vice President Mario Morales in the release.
IDC said front-end manufacturing began to meet demand in the third quarter of 2021 with dedicated foundries working with factory-less suppliers. However, he added that “bigger problems and shortages” mean back-end shortages will continue.
The company also provided more details on the growth areas of the semiconductor market.
5G semiconductor revenue will increase 128%, and total mobile phone semiconductor is expected to increase 28.5%.
Growth will also be strong for game consoles (34%), smart home (20%) and portable devices (21%).
The automotive semiconductor shortage is expected to be resolved by the end of the year, with revenue increasing 22.8%.
Laptop semiconductor revenue will grow 11.8%, while X86 Server semiconductor revenue will grow 24.6%.
The rising costs of semiconductor wafers will be sustained through 2021 thanks to material costs and the opportunity costs of mature processing technologies, the company said.