Semiconductor market to top a trillion devices again in 2021

April 08, 2021 // By Nick Flaherty
Semiconductor market to top a trillion devices again in 2021
A 13 percent increase in the semiconductor market in 2021 is expected to lift total shipments to a new record high says IC Insights

The semiconductor marekt is set to shake off the Covid-19 pandemic with 13 percent growth in 2021 says the latest report from IC Insights' McClean Report.

Total semiconductor unit shipments, which include integrated circuits as well as optoelectronics, sensor/actuator, and discrete (O-S-D) devices, are forecast to rise 13 percent in 2021 to 1,135.3 billion (1.1353 trillion) units. This would set a new all-time annual record  and would be the third time that semiconductor units have surpassed one trillion units in a calendar year since 2018.

The 13 percent increase to 1,135.3 billion semiconductor units follows a 3 percent increase in 2020 as the Covid-19 pandemic was wreaking havoc across many segments of the economy.  From 1978, when 32.6 billion units were shipped, through 2021, the compound annual growth rate (CAGR) for semiconductor units is forecast to be 8.6 percent over 43 years even though the growth rate has waned for many key semiconductor market applications such as PCs and cellphones.  

The strong CAGR also demonstrates that new market drivers continue to emerge that fuel demand for more semiconductors. Components that target network and cloud computing systems, contactless (touchless) systems, automotive electronics including autonomous systems, and devices that are essential to the rollout of 5G technology applications are expected to see the strongest growth in 2021.

Between 2004 and 2007, semiconductor shipments broke through the 400-, 500-, and 600-billion unit levels before the global financial meltdown led to a steep decline in semiconductor shipments in 2008 and 2009.  Unit growth rebounded sharply in 2010 with a 25% increase and surpassed 700 billion devices that year. Another strong increase in 2017 (12 percent growth) lifted semiconductor unit shipments beyond the 900-billion level before the one-trillion mark was surpassed in 2018.

The largest annual unit growth rate across the 43-year span was 34 percent in 1984 and the second-highest growth rate was 25 percent in 2010.  In contrast, the largest annual decline was 19 percent in 2001

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