The global semiconductor market, which was upended by Covid-induced supply chain frictions in 2020 and 2021, is projected to reap nearly 14 percent more in revenue this year compared to 2021 to reach $676 billion.
According to a new report by Gartner, technological research and consulting firm based in Stamford, driven by increasing demand and rising chip prices, the industry will hit $700.6 billion in 2023, a yearly rise of 3.6 percent.
The average selling price (ASP) rise from the global chip shortage will be a major driver for growth, Alan Priestley, research vice president at Gartner, said.
However, as markets open and supply chain disruptions reduce, semiconductor component supply constraints are “expected to gradually ease through 2022 and prices will stabilise with the improving inventory situation”, Priestley said.
Semiconductors are important components in electronic devices and particularly in electric and self-driving vehicles.
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They are used to manage functions such as navigation and parking and for monitoring engine performance. Carmakers, particularly, have been affected as the lack of chips has halted production in factories around the world.
Various automotive applications will continue to experience component supply constraints until next year, Connecticut-based technology research and consulting company Gartner predicted.
“Although unit production of automotive vehicles will grow below expectation at 12.5 percent in 2022, semiconductor device ASPs are expected to remain high because of continued tight supply driving the automotive semiconductor market to double-digit growth [19 percent],” Priestley said.
The global semiconductor shortage will drive nearly 50 percent of the top 10 car makers to design and produce their own chips by 2025, Gartner said in an earlier report.
Supply chain disruptions, severe chip scarcity, and trends such as electrification of vehicles, and autonomy, will propel manufacturers to reduce their reliance on traditional chip makers.
This will give carmakers more control over their product roadmap and supply chains, according to Gartner’s latest report.
Chip shortage will continue to be a concern for the supply chain of electronics equipment in 2022, the report said. It will affect major electronic equipment markets differently depending on different semiconductor device types.
The memory chip market will account for the largest share in the semiconductor device market through the forecast period. It is projected to constitute nearly 31.4 percent of the overall industry this year.