Semiconductors have emerged as a key weapon in the China-US trade-political dispute, putting leading memory player South Korea in a perilous position. Photo: WikiMedia Commons.

Despite a looming shortage which has caused havoc around the world, and, not to mention, a global pandemic to boot, the global semiconductor market will reach US$522 billion in 2021, a 12.5% year-over-year growth.

Not only that, but according to the International Data Corporation (IDC), this unprecedented robuts growth will continue in consumer, computing, 5G, and automotive semiconductors.

“Supply constraints will continue through 2021. While shortages initially occurred in automotive semiconductors, the impact is being felt across the board in semiconductors manufactured at older technology nodes,” the IDC said in a report this week, which was carried by sify.com.

The industry will continue to struggle to rebalance across different industry segments, while investment in capacity now will improve the industry’s resiliency in a few years, the report said.

Looking forward to 2021, IDC sees continued strong growth in semiconductor sales worldwide “as adoption of cloud technologies and demand for data and services remain unchanged,” the report mentioned.

“Overall, the semiconductor industry remains on track to deliver another strong year of growth as the super cycle that began at the end of 2019 strengthens this year,” said Mario Morales, program vice-president, Semiconductors at IDC.

“The markets remain narrowly focused on shortages across specific sectors of the supply chain, but what is more important to emphasize is how critical semiconductors are to every major system category and content growth that remains unabated.”

The market for semiconductors in computing systems, such as PCs and servers, outpaced the overall semiconductor market, growing 17.3% (YoY) to US$160 billion in 2020.

The IDC forecasts computing systems revenues will grow 7.7% to US$173 billion in 2021, while mobile phone semiconductor revenues will grow by 23.3% to US$147 billion.

According to Rudy Torrijos, research manager, Consumer Semiconductors, “new gaming consoles from Microsoft and Sony, continued strong sales of wearables from Apple, and the rise in smart home networks managed by Amazon Alexa and Google Assistant will accelerate growth in 2021 to 8.9% year over year.”

Cadillac Escalade SUVs roll off the assembly line at the Arlington, Texas factory. Photo courtesy, General Motors.

Automotive sales recovered in the second half of 2020, but the supply constraints for the automotive semiconductor market for some products will last through 2021.

Meanwhile, General Motors says it will finish the year strong, in part because of its strategy in dealing with a worldwide shortage of semiconductor chips, Detroit Free Press reported

In an unusual move, GM CEO Mary Barra issued a Letter to Shareholders simultaneously with GM’s first-quarter earnings results.

In it, Barra said GM expects to have a strong first half with adjusted earnings before interest and taxes of around $5.5 billion and GM is reaffirming its full-year guidance, “based on what we know today,” coming in at the higher end of the $10 billion to $11 billion EBIT-adjusted range that it shared earlier this year. 

“Our supply chain and manufacturing teams are maximizing production of high-demand and capacity-constrained vehicles,” Barra wrote in the letter.

“Our engineering teams are creating effective alternative solutions, and our sales teams, together with our dealers, are finding creative ways to satisfy customers despite lean inventories.”

According to a report in The Detroit News, Ford Motor Co. booked a $3.3 billion profit in the first quarter, but warned that it could lose as much as half of its planned vehicle production for the second quarter amid a worsening global semiconductor shortage — a prospect one analyst called “jaw  dropping.”

The Dearborn automaker generated $36.2 billion in revenue and delivered a profit margin of 9%. Executives attributed the results to efforts to mitigate the impact of the chip shortage, a refreshed vehicle portfolio in the midst of being rolled out, and longer-term changes aimed at improving the fundamentals of the business. 

“What you’re seeing come through the numbers is good execution by the team,” said chief financial officer John Lawler. “They really leaned into optimizing the mix of our products, with an emphasis on moving vehicles that are in high demand from our customers and have higher margins for us.”

Executives also pointed to changes such as the shift in North America to an SUV- and truck-focused lineup, and a global restructuring plan under which Ford has closed facilities overseas and slashed $1 billion in costs in Europe to become a leaner company. 

“We’re executing on our plan, and I’m excited to say Ford is becoming a stronger, more resilient company that can deliver under pressure, manage risk and seize opportunities, all while generating consistent returns for our stakeholders,” CEO Jim Farley said.

Sources: IANS, sify.com, PrintedElectronics, Detroit Free Press, The Detroit News