Semiconductor chip industry reaches $ 1 trillion in 10 years despite shortage


The semiconductor industry recorded remarkable numbers in 2021 and 2022, despite the ongoing global shortage, which is the shortage of many final products, from automobiles to appliances to telephones. It shows the importance and decisive importance of the tip.

Total industry revenue exceeded $ 500 billion last year and is expected to reach nearly $ 600 billion by 2022. Steady growth in demand has led experts in this sector to predict that the industry will reach $ 1 trillion within 10 years.

“It took 50 years to become a $ 5 trillion industry,” said Tom Caulfield, CEO of GLOBALFOUNDRIES. The Wall Street Journal..

In an unresolved supply chain crisis, education and work went online in semiconductor manufacturing, resulting in a surge in technology reliance during the pandemic. Due to the lack of critical chips, production of hundreds of billions of dollars worth of final products has ceased.

Based on the data collected by analysts, the chip shortage over the last two years has cost $ 500 billion between manufacturers and semiconductor manufacturers. Car makers alone lost $ 210 billion worth of sales last year because they didn’t have enough chips.

The semiconductor supply chain crisis is not expected to subside in the first half of 2022, and manufacturers are expected to have longer lead times in 2023. As the industry expands beyond the traditional hubs of South Korea, China and Taiwan, there will be a shortage of talent. Deloitte Analyst Predict significant evolutionary changes within the enterprise based on changing demand.

Unlike other major global industries like agriculture, semiconductor manufacturers are primarily focused on several economies.

The Semiconductor Industry Association, which represents 98% of US chip companies and almost two-thirds of non-US chip companies, announced in December that chip sales remained strong as the economy emerged from the pandemic. ..

John Neufer, President and Chief Executive Officer of SIA, said: news release.. “Annual chip sales and shipments are projected to reach record highs in 2021 and moderate annual growth is expected in 2022.”

The increase in sales also reflects the increase in chip costs. High-end, expensive chips that enhance machine learning and artificial intelligence will boost sales. In the meantime, more devices are incorporating chips into their products, leading to a shortage.

The Biden administration has warned that the current inventory period for critical chips is only five days, while previously there was a supply of more than 40 days.

According to the Pennsylvania-based Susquehanna Financial Group, the average waiting time for chips is now over 25 weeks, well above the usual 10-14 weeks.

Naveen Athrappully

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Naveen Athrappully is a news reporter covering business and global events in The Epoch Times.