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Global semiconductor market set to grow in 2020

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Several market analyst firms have predicted a surge in the global semiconductor market, buoyed by another surge in advanced logic and foundry spending.

According to VSLI Research, semiconductor capital expenditures are on track to increase 4% in 2020.

It notes that expenditures in these segments have increased substantially in the last two years and will account for over half of capital spending in 2020.

The market intelligence firm says memory spending is expected to decline again in 2020, albeit at a much lower rate from 2019.

“We expect capital expenditures to increase 5% in 2021, driven primarily by a rebound in memory spending,” says the firm.

“Advanced logic and foundry spending is expected to take a breather next year and digest some of the added capacity following record spending levels in 2020.”

The Semiconductor Industry Association (SIA) recently announced that worldwide sales of semiconductors were $34.5 billion in June 2020, an increase of 5.1% from the June 2019 total of $32.9 billion.

SIA notes that sales in June were 0.3% less than the May 2020 total of $34.6 billion. It adds that sales during the second quarter of 2020 were $103.6 billion, an increase of 5.1% over the second quarter of 2019, but a small decrease of 0.9% compared to the first quarter of 2020.

Research firm Future Market Insights also issued a statement yesterday saying compound semiconductor materials are critical building blocks for next-gen electrification technologies, and are expected to be at the core of nearly every prominent industrial sector of the 21st century.

According to the firm, recent analysis reveals the global compound semiconductor material market will grow at 7.2% CAGR through 2030.

It notes that think tanks in various regions are striving to develop new materials and device technologies to keep pace with the rapidly emerging gallium nitride power device industry.

Future Market Insights points out that the semiconductor manufacturing space has been progressing considerably over the past decade, owing to advancements in nanotechnology.

At present, it notes, nanoparticles are utilised in the doping process to develop semiconductor sensors accenting substantially high scales of accuracy.

It adds that as the COVID-19 pandemic rages across continents, market players are swiftly changing their manufacturing practices and focusing on priorities to fulfil the demand for market-centric semiconductor materials.

Export-reliant regions are already at the wrong end of the COVID-19 curve, amid uncertainties in the global economy, Future Market Insights says.

It notes that while various manufacturers of compound semiconductor materials are either shutting down or reducing their production due to inadequate downstream demand, some have suspended their production units as a preventive measure by the governments of respective countries to battle the COVID-19 contagion.

For example, it says Samsung Electronics shut down its operations in South Korea in March, and for about 45 days in India from March through April.

It adds that Qorvo reduced its manufacturing for Q1 2020 and anticipates the revenue to dip as the COVID-19 pandemic is affecting smartphone production and consumer demand more than expected.

Meanwhile, fellow analyst firm TrendForce says according to the revenue ranking of top 10 internal circuit design companies for 2Q20, Broadcom was able to capture number one position by surpassing Qualcomm in quarterly revenue.

It says despite strong demand for 5G products driven by working from home and distance education needs, Qualcomm’s upward momentum in 2Q20 was constrained due to the delayed release of Apple’s latest iPhones.

TrendForce analyst CY Yao indicates that new product releases by Apple during third quarters had typically contributed to Qualcomm’s second quarter revenues in the past.

Delayed iPhone releases this year, however, led to a slowdown in Qualcomm’s chip revenue growth, Yao says.

TrendForce says Qualcomm registered a modest 6.7% revenue growth year-on-year in 2Q20.

On the other hand, it notes, although Broadcom retook first place in terms of quarterly revenue, escalating tensions between China and the US had a negative effect on its semiconductor revenue performance, which declined by 6.8% year-on-year in 2Q20.

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