The Semiconductor Industry Association (SIA) released the latest data on Monday, showing that 1.15 trillion chips will be sold worldwide in 2021, with sales reaching a record $555.9 billion, a year-on-year increase of 26.2%. A 34% increase over the previous year to $26.4 billion.
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SIA predicts that global chip production capacity will be further increased in 2022 to meet growing demand, although chip sales growth will slow to 8.8% this year, which is still higher than the 6.8% increase in sales in 2020.
China remains the largest semiconductor market, accounting for about one-third of global sales, according to SIA. China’s chip sales in 2021 will total $192.5 billion, an increase of 27.1%.
Semiconductor demand remains strong
John Neuffer, chief executive of SIA, said that the large increase in semiconductor market sales in 2021 is mainly due to the rebound after the new crown epidemic, and although this rebound will continue this year, there will be no such large growth effect as last year. .
During the new crown epidemic, some Asian chip factories were shut down by epidemic control measures, which has had a significant impact on the global chip supply chain and caused supply interruptions of some chips.
A recent report from the U.S. Department of Commerce said that the median inventory of some semiconductor products has fallen from 40 days in 2019 to less than five days in 2021, and the problem will not be resolved for the next six months.
Major semiconductor manufacturers, including TSMC, Samsung Electronics and Intel, have announced investments of tens of billions of dollars in new factories over the past year, but Nover said demand for semiconductors remains strong due to the global digitization trend driven by the new crown pandemic, and chips are expected to continue to grow. In short supply.
Sheng Linghai, an analyst at Gartner, told Yicai.com: “The demand for cloud from home office driven by the epidemic, the substantial growth of 5G and new energy vehicles are the main factors leading to the continued demand for chips, and it is not ruled out that some companies are stockpiling a lot of goods. , exacerbating the shortage of chips.”
In response to the shortage of chips, since the beginning of this year, both Europe and the United States have announced government investment in the semiconductor field, thereby intensifying competition in semiconductor manufacturing. Earlier this month, the U.S. House of Representatives voted to pass the 2022 American Competition Act to promote large-scale investment in U.S. semiconductor manufacturing.
Under the bill, the U.S. will include up to $52 billion in grants and subsidies for the semiconductor industry, and will invest $45 billion in strengthening supply chains for high-tech products. Industry reports estimate that the investments will allow the U.S. to build 19 factories over the next 10 years, doubling chip manufacturing.
Autonomy and industry integration become a trend
In addition, the independent development of chips has also become a strategic focus of European and American governments. U.S. Commerce Secretary Gina Raimondo said: “Global chip shortages have significant economic impacts, including the automotive industry, and an overreliance on overseas-produced semiconductors has national security implications that must be addressed immediately.”
The European Commission last week also introduced a public funding bill totalling 42 billion euros. The Act signifies that the EU, which is highly open to competition, has also had to adopt a paradigm of interventionist industrial policy to reduce external reliance under pressure from the international environment.
According to this plan, by 2030, the EU plans to provide 12 billion euros in subsidies for innovative chip research and development and the construction of pilot production lines, thereby preparing for future industrialization. Another 30 billion euros in public aid will be used to build large-scale chip factories and encourage innovation in smaller companies, including to attract investment in Europe from overseas companies such as Intel. The EU hopes that these public funding will also trigger more private investment.
European Commission President Ursula von der Leyen has set a goal of doubling the EU’s market share in semiconductors to 20% of global production by 2030, in order to reduce the need for Dependence on Asian supply chains. It also means a four-fold increase in the amount of semiconductors produced in Europe.
The new crown epidemic has also reshaped the competitive landscape of the global chip industry. In the past year, the integration of the chip industry has accelerated, and mergers and acquisitions have also set historical records. On February 14, the chip company AMD announced the completion of the acquisition of Xilinx up to US$50 billion. This transaction also made the transaction value of the chip industry exceeded US$100 billion for the first time in the past year.
In the past year, the stock prices of U.S. semiconductor companies have risen sharply. Nvidia’s stock price has risen by 60%, AMD’s stock price has risen by more than 20%, and Qualcomm’s stock price has risen by more than 10%, far better than European semiconductor companies Infineon, NXP and Italy. French Semiconductor’s performance over the same period.
Consolidation in the chip industry has mostly targeted the needs of the growing data center and artificial intelligence businesses. Big Internet companies like Amazon, Google, Microsoft, and others are investing heavily in new data centers to meet surging demand for cloud computing businesses.
In the data center business, Intel and Nvidia in the US still dominate. A UBS research report estimates that Intel’s data center business is about $26 billion in annual revenue, Nvidia’s is about $6.5 billion, and AMD’s data center business is lagging behind at $500 million.
However, last week Nvidia’s acquisition of British chip company Arm failed because it was not approved by regulators, and Arm will go public independently. The deal was originally valued at $80 billion. Nvidia founder and CEO Jen-Hsun Huang predicts that demand from supercomputing, cloud, artificial intelligence and robotics will make Arm the most important CPU architecture in the next decade.