What chip shortage? Semiconductor revenue reached new heights in 2021, says Gartner

Regardless of demand persevering with to outpace provide, or maybe due to it, trade income grew by 25% in 2021 to high $500 billion for the primary time.

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The chip scarcity carries on, however Gartner says that hasn’t stopped the semiconductor trade from rising by 25.1% in 2021 to high $500 billion in income for the primary time.

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The most recent projections do not present the chip scarcity easing to any giant diploma till the latter half of 2023, although some industries are more likely to see a return to regular later this yr. Till new fabs could be constructed and manufacturing elevated, provide will proceed to outpace demand, which Gartner says is likely one of the main causes for the record-breaking earnings.

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“Put up”-COVID financial rebounds in 2021 induced shortages within the provide chain that hit the automotive trade notably onerous, says Andrew Norwood, analysis VP at Gartner. “The ensuing mixture of sturdy demand in addition to logistics and uncooked materials value will increase drove semiconductors’ common promoting value increased, contributing to total income development in 2021,” Norwood stated.

The automotive trade is not the one place the place common promoting costs rose: Gartner stated that 5G smartphone manufacturing was a serious driver, with unit manufacturing doubling in 2021 to achieve 555 million items.

Curiously sufficient, it seems that US sanctions imposed on Chinese language chip producer Huawei resulted in development for distributors like Qualcomm and MediaTek, which each noticed income development in extra of fifty% from 2020 to 2021. “In the meantime HiSilicon, Huawei’s chip subsidiary, noticed income decline from $8.2 billion in 2020 to round $1 billion in 2021,” Norwood stated. That is an enormous hit.

Gartner additionally studies that Samsung regained the highest spot within the semiconductor trade (based mostly on income) from Intel for the primary time since 2018, with a 31.6% income development between 2020 and 2021. Intel, then again, solely noticed 0.5% development over the identical interval. Gartner didn’t explicitly state that Samsung’s bounce was as a result of elevated smartphone manufacturing, however Samsung itself introduced a greater than 50% improve in its earnings that has been attributed to elevated chip and machine gross sales.

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SK Hynix, Micron Know-how, Broadcom, Texas Devices, NVIDIA and AMD spherical out the highest 10, which collectively account for greater than half of the entire semiconductor market income that Gartner reported. 

As has been lined beforehand, the chip scarcity has been pushed by provide chain disruptions triggered by the COVID-19 pandemic. Whereas different industries have rebounded, the semiconductor sector has had bother, which Deloitte stated has extra to do with the way it performed enterprise earlier than the pandemic than the pandemic alone. 

Income could also be up, however that will not cease widespread and needed transformation from going down within the semiconductor trade. Chip makers have begun to pursue localized manufacturing, and digital transformation (lengthy resisted within the trade) has begun in earnest as firms begin to shift methods from restoration to constructing resilience. Simply do not anticipate it to occur in a single day. 

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