Chip Sales ‘Hit Record $555.9bn’ Last Year

Global chip sales reached a record of $555.9 billion (£411bn) in 2021, up 26.2 percent year-on-year, the Semiconductor Industry Association (SIA) said on Monday, forecasting 8.8 percent growth for 2022 amidst continued strong demand.

While this year’s projections are much lower than the heights reached last year as countries emerged from pandemic lockdowns, SIA chief executive John Neuffer emphasised the “strong” tendency toward continued rising demand.

“It’s still really trending very strongly towards increased demand,” Neuffer told Reuters. “We’re just not going to get this kind of slingshot effect that we had in the pandemic.”

Record growth

In 2020 sales grew 6.8 percent over the previous year. 2021, meanwhile, was the first year since 2018 that the number of chips sold was greater than 1 trillion, Neuffer said.

He said worldwide demand would continue to be fuelled by the trend toward increased reliance on digital devices that has emerged during the pandemic, even as chip companies including TSMC, Samsung Electronics and Intel have announced tens of billions of dollars in investments into new factories over the past year.

Some industry-watchers have suggested those investments could result in a glut of production when the factories come online a few years down the line.

Neuffer said he sees “plenty of demand” into “the forseeable future”, even allowing for “very, very aggressive plant construction”.

The number of semiconductors sold in 2021 reached 1.15 trillion, with the highest growth in chips for automobiles, which grew by 34 percent over the previous year to $26.4bn, with unit sales rising 33 percent year-on-year, he said.

Supply chain

Auto makers have been hampered in meeting resurgent demand by constraints in chip supply, with most forced to cut production in response.

China was the largest single semiconductor market, with sales at $192.5bn for 2021, up 27.1 percent, according to the SIA.

Western countries have responded to chip shortages with plans to boost domestic production, including the European Chips Act introduced by the European Commission last week and US lawmakers currently debating funding for the country’s own Chips Act.

The Commission said the shortages, especially for automakers, had highlighted the “extreme global dependency of the semiconductor value chain on a very limited number of actors in a complex geopolitical context”.