IDC: Semiconductor market to grow 17.3% in 2021, overcapacity may occur in 2023

Since the second half of 2020, the problem of wafer shortage in the semiconductor market has become increasingly prominent. At the same time, terminal applications such as office and remote teaching have become popular despite the impact of the epidemic, driving the rapid recovery of communication and computer products. Recently, IDC conducted a detailed interpretation of topics such as the industry status and industry turning points of the global semiconductor market, and predicted that the semiconductor market will grow by 17.3% in 2021, and there may be overcapacity in 2023.

IDC believes that from the current supply chain situation, as of September, professional foundries have configured their 2021 production capacity, with capacity utilization close to 100%. Although front-end capacity is still tight, chip design companies can still obtain the required capacity from foundries. In the third quarter, wafer manufacturing capacity basically met demand, but the bigger problem was packaging and material shortages.

Wafer prices rose in the first half of 2021, and IDC expects prices to continue to rise for the rest of the year due to mature process raw material costs and production capacity reasons.

IDC expects the semiconductor market to grow 17.3% in 2021, compared with 10.8% in 2020. Mobile phones, laptops, servers, cars, smart homes, games, wearable devices, and Wi-Fi access points have led to rising memory prices. However, it is worth noting that as production capacity expands, IC shortages will continue to ease in the fourth quarter of 2021.

IDC expects the industry to reach balance by mid-2022, and with large-scale capacity expansion beginning at the end of 2022 and 2023, overcapacity may occur in 2023.

Overall, IDC expects the semiconductor market to reach $600 billion by 2025, with an average growth rate of 5.3% from 2021 to 2025, which will be higher than the historical growth rate of 3-4%.