Semi sales up 26.2 percent but how long will the upturn last?

Global semiconductor sales totaled 555.9 billion dollars in 2021, the Semiconductor Industry Association reports. That’s an increase of 26.2 percent compared to 2020 and an all-time record. The industry shipped a record 1.15 trillion semiconductor units in 2021. “In 2021, amid the ongoing global chip shortage, semiconductor companies substantially ramped up production to unprecedented levels to address persistently high demand, resulting in record chip sales and units shipped,” said John Neuffer, SIA president and CEO.

Neuffer expects the current trend to continue. “Demand for semiconductor production is projected to rise significantly in the years ahead, as chips become even more heavily embedded in the essential technologies of now and the future.”

From 2016-2021, the compound annual growth rate (CAGR) for the total semiconductor market was 11.0 percent, according to IC Insights. However, the market watcher warns “that the semiconductor industry is very cyclical and ongoing annual double-digit gains are unsustainable.” As a result, IC Insights forecasts total semiconductor sales will rise over the next five years at a more moderate CAGR of 7.1 percent.