Chip sales are set to grow nearly 10% in 2022 as risks rise, predicts new report

Workers sporting cleanroom fits stroll beneath Automated Materials Dealing with Methods (AMHS) car robots transferring alongside tracks on the ceiling contained in the GlobalFoundries semiconductor manufacturing facility in Malta, New York, U.S., on Tuesday, March 16, 2021.

Adam Glanzman | Bloomberg | Getty Photos

Chipmakers have been clear winners within the pandemic period, and the momentum within the semiconductor area is about to stay sturdy going into 2022, in line with a report launched Monday by commerce credit score insurer Euler Hermes.

“The present semiconductor cycle has been firing on all cylinders for the reason that business emerged from its worst recession in 2019,” analysts at Euler Hermes mentioned.

Semiconductor gross sales are anticipated to develop by one other 9% and cross $600 billion for the primary time in 2022, the analysts predicted. That is on high of the 26% development to $553 billion in 2021, they added.

A months-long semiconductor scarcity through the pandemic impacted a wide-range of industries — from cars to gaming consoles — as chipmakers struggled to maintain up with unprecedented demand as international financial exercise bounced again from the Covid disaster.

Whereas main chipmakers like TSMC have already introduced plans to extend capability, it normally takes years earlier than these amenities come on-line. TSMC’s Taiwan-listed shares have already surged greater than 80% in roughly two years.

Three components have pushed up gross sales up to now, analysts from Euler Hermes mentioned. They’re:

  1. Demand: “Unusually sturdy demand” for client electronics, corresponding to private computer systems and smartphones
  2. Costs: A rise in costs on account of tight provide and demand dynamics
  3. Improved product combine: Additional enchancment in product combine for semiconductors on account of larger priced and new technology chips being launched.

Dangers for the chip sector

Trying into the brand new yr, the analysts mentioned those self same three market drivers are anticipated to ease as demand development normalizes and new manufacturing capacities come on-line in an accelerated style.

As well as, the analysts recognized 4 dangers confronted by the semiconductor sector:

  1. {Hardware} gross sales (for merchandise like computer systems and TV units) taking a larger-than-expected hit from demand normalization after sturdy development in 2020 and 2021;
  2. Semiconductor demand being hit by any interval of extended freeze in manufacturing exercise, as provide chain disruptions from the pandemic proceed;
  3. A “standstill” between China and the U.S. of their battle for tech supremacy, with restrictions nonetheless in place for Chinese language corporations buying important U.S. semiconductor manufacturing tech and tools;
  4. An “rising frequency of unusually opposed climatic occasions” proving to be a serious problem for the semiconductor sector, which depends on optimum capability utilization for its profitability.

A number of components are additionally anticipated to “set the tone for 2022” within the chip sector, in line with Aurelien Duthoit, sector advisor for know-how and retail at Euler Hermes.

Past normalization of demand in areas corresponding to computer systems and servers, Duthoit recognized components corresponding to “unpredictable and random occasions” hurting main semiconductor manufacturing places like Taiwan and South Korea.

Recent developments within the technological “Chilly Conflict” between the U.S. and China might additionally stop semiconductor know-how specialists from promoting to Chinese language corporations, he added.


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