The semiconductor industry, which makes key components for most of the technologies we depend on, has been in the headlines in recent years. These headlines focused on the chip shortages leading to bottlenecks in production across the globe, further increasing the demand for chips.
Thus, the semiconductor market saw growth of 26.2% in 2021, and according to World Semiconductor Trade Statistics (WSTS) recent report, the market will grow by 13.9% in 2022, with a forecast of $633 billion.
The report further shows that major categories will see high teens year-on-year (YoY) growth in 2022, led by Logic growing 20%, Analog at 19.2%, and memory with 18.7% growth projections. Further, Optoelectronics will see almost no growth, with forecasts of a 0.3% increase.
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Similarly, all geographical regions are forecasted to show growth, led by the Americas, which are expected to grow at 22.6%, Europe at 20.8%, Asia Pacific at 13.9%, and Japan by 12.6%.
Future growth
Furthermore, the report estimates that the semiconductor market will continue growing into 2023, though at a more conservative rate of 4.6% to $662 billion, with all categories seeing ‘only’ single-digit growth. Furthermore, expansion is anticipated across all geographic areas in 2023 as well. The Logic category is projected to continue to see the strongest growth through 2023, eventually reaching a total value of $200 billion.
Semiconductor consumption habits seem to be in an uptrend in 2022, which could have been in part caused by the disruption brought on by Covid lockdowns. Shortages initially identified as problems were targeted by governmental and private initiatives to ramp up production.
This increase in production could bring about overcapacity in 2023, indicated in the data by single-digit growth seen in 2023. Moreover, these estimates could be more optimistic, as inflationary pressures and talks of a global recession stubbornly remain an overhang on the broader markets.
Overall, the boom and bust cycles are typical, especially in the memory market; therefore, a considerable increase in 2021 and 2022 might result in stronger tapering off in 2023, but that will mainly depend on other macroeconomic factors.
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