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Semiconductor market to grow 18% in 2021, says Penn

19th January 2021
Mick Elliott
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The global semiconductor market will grow 18% to $520.6 billion in 2021, says Malcom Penn CEO of Future Horizons.

This performance builds on an against-the-odds 7.5% growth in 2020. It is one of the few times that the semiconductor industry has grown against the backdrop of a global economic downturn.

Demand will roll in from all industry sectors with electric vehicles (EV) and personal healthcare leading the charge.

The growth will encompass a wide range of semiconductor devices. “It’s not just driven by companies buying thousands of processors,” says Penn.

Q1 and Q2 growth rates of 1.4% and 3.5% will accelerate to 9.2% in Q3 before slowing in Q4.

A stronger start in Q1 2021 would see the industry on the way to fulfilling Penn’s bullish forecast of 24% growth.

Sluggish sales in Q1 could hold back the industry to 11% growth in Penn’s bearish forecast.

“I can’t see growth being anything but in the high teens,” he notes.

Underpinning this performance is a growth spurt in IC units and the likelihood that average selling prices will recover in 2021.

Fab capacity is tight however. In fact Penn says “It is sold out, and this will be a problem until the end of the year.”

“There has been underinvestment and the industry is paying the price,” Penn remarks. “There should have been investments in fab capacity a year ago.”

“It takes two years to bring a wafer fab up to full speed.”

The effects of this are already impacting the automotive industry. Car makers are slowing or halting production due to a lack of semiconductor devices.

Penn has little sympathy. “Tough,” he declares. “They shouldn’t have cancelled all those orders last year.”

Automotive is now competing with consumer, smartphone and server IC suppliers for product, and all of these customers are more profitable for the chip makers.

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