LONDON – The past three months have wreaked havoc on the semiconductor market, with sharp demand fluctuations and supply-chain issues.

“The Covid-19 pandemic will shrink worldwide end-user demand for everyday products powered by semiconductors,” said David Bicknell, principal analyst, Thematic Research at GlobalData. “Covid-19’s impact also means much of the industry is only operating at about 50% capacity, though China is moving again. At the same time, the global supply chain has stalled, exacerbated by Covid-19-related border checks that could last for months.”

The good news is, on the supply side, the manufacturing operations of China-based DRAM and flash memory plants have been largely unaffected, as highly automated semiconductor fabrication plants need little manpower, says the research firm. Covid-19 has triggered surging demand among millions worldwide for online services and apps, but so far there has been little disturbance to the supply of extra servers for China’s data centers.

“The captive semiconductor operations of Apple, Huawei, Google, Amazon, and Alibaba remain long-term, up to five years ahead, and designers can use cloud-based services. By then, China’s currently weak semiconductor industry will have grown to become a challenging competitor for the US.”

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