A research note from IDC suggests the ongoing chip shortage will normalise by the middle of next year.

Semiconductors are in short supply primarily due to pandemic-related supply chain issues, trade sanctions, and strong demand.

IoT devices continue to proliferate rapidly, connected vehicles are increasingly desirable, 5G-capable smartphones are in-demand, and stock of those newfangled games consoles are flying out before they even reach shelves. Combined with the global demand for laptops, TVs, and all the other electronics we use day-to-day and it’s little surprise that supply is struggling to keep up.

Despite the delta variant resulting in another wave of COVID-19 cases, IDC reports that semiconductor foundries remain allocated for the rest of the year with capacity utilisation at nearly 100 percent.

“The semiconductor content story is intact and not only does it benefit the semiconductor companies, but the unit volume growth in many of the markets that they serve will also continue to drive very good growth for the semiconductor market,” says Mario Morales, Group Vice President of Enabling Technologies and Semiconductors at IDC.

IDC expects growth in the semiconductor market of 17.3 percent this year compared to 10.8 percent in 2020.

Smart home semiconductor revenues are estimated to increase by 21 percent and wearables by 34 percent.

5G semiconductor revenues will lead growth with a predicted increase of 128 percent. Mobile phone semiconductor revenues expected to increase by 28.5 percent and games consoles by 34 percent.

Overall, IDC predicts the semiconductor market to reach $600 billion by 2025.

(Photo by Marvin Meyer on Unsplash)

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