3rd January 2022
The global electronics market is booming. In fact, the Semiconductor Industry Association (SIA) reported a growth of 29.2% year-to-year in global semiconductor sales last year.
While many unprecedented factors have affected the market over the past few years, it’s crucial to understand the most influential forces still at play and what this means for the future, particularly for 2022.
According to SIA, YoY to June 2021, sales increased regionally in Europe (43.2%), Asia Pacific/All Other (34.0%), China (28.3%), and the Americas (22.9%), and Japan (21.2%). In addition, month-to-month sales increased in the Americas (5.4%), Japan (2.5%), Europe (2.0%), China (1.1%), and Asia Pacific/All Other (1.0%).
So, what’s driving this growth?
The growth appears to be driven by demand for mobile phones, notebooks, servers, automotive, smart home, gaming, wearables, and Wi-Fi access points, with increased memory pricing.
But let’s dive deeper.
Industry specialists made many predictions at the start of last year, suggesting that Q4 '21 would start to see manufacturing meet demand. While this happened to a degree, more significant issues and shortages remain in back-end manufacturing and materials.
Based on the annual KPMG Global Semiconductor Industry Outlook survey:
- 72% believe 5G will become a significant revenue driver within two years.
- Wireless communication (including 5G) and IoT are tied as the most important applications driving semiconductor revenue.
- 71% percent of companies will spend more on R&D next year to create strategic design wins and develop new products necessary to drive competitive advantages in diverse applications and end markets.
How Does the U.S. Market Compare?
The U.S. market should be considered in context, as many nuanced factors are at play.
A 2021 report by Statista predicted that the US computer and electronics industry revenue would increase by 0.6% p.a. from 2019 to 2024. While these figures are lower than the global forecast because they reflect the decades-long decline in the US semiconductor manufacturing capacity, they still present a positive opportunity for the US market.
With growth comes investment. Total R&D spending increased by 3.0% p.a. from 2016 to 2019, a continuing trend. In fact, last year, President Joe Biden called for a review of supply chains for critical products, which has put a spotlight on semiconductor manufacturing capacity.
Why is this?
The U.S. share of global semiconductor fabrication is only 12%, down from 37% in 1990, according to the Semiconductor Industry Association.
The current issues of lower capability and high global demand are being felt acutely by industries in the U.S., such as automotive and defense, that rely on 88% of the semiconductor chips being produced outside the U.S.
Therefore, Biden’s executive order about supply chains is good news for determining what’s needed to improve the growth and investment in the U.S. semiconductor industry.
So, how can we help?
To echo the industry and help you make the most of the opportunity in R&D investment, we've also invested in Electronics in the US and worldwide.
In 2021, we opened our first U.S. office. We've just added nine new local websites to Electronic Pro's online content portfolio to cater worldwide to Electronics Engineers and senior professionals, reaching the target prospects searching for information on solutions like yours.
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