WASHINGTON – A pair of new reports on semiconductor sales show strong gains for 2020 and the promise of more to come.

The three-month moving average sales for December were $39.2 billion, up 8.3% year-over-year and down 2% sequentially, according to the Semiconductor Industry Association. Fourth quarter sales were $117.5 billion, up 8.3% year-over-year and 3.5% sequentially.

Global semiconductor industry sales were $439 billion in 2020, an increase of 6.5% compared to 2019, says SIA.

Meanwhile, the market research firm International Data Corp. said worldwide semiconductor revenue grew to $442 billion for the year, up 5.4% year-over-year.

“Global semiconductor sales increased moderately on an annual basis in 2020, weathering a challenging macroeconomic environment brought on by the pandemic and other factors,” said John Neuffer, president and CEO, SIA. “While global demand for semiconductors is on the rise, the share of global chip production done in the US has declined from 37% in 1990 to 12% today, and that disparity will only intensify without US government action to level the global playing field. It’s imperative the federal government fully fund incentives for domestic chip manufacturing and investments in chip research so the US can benefit from growing demand and produce more semiconductors needed to strengthen our economy, national security, and critical infrastructure.”

On a regional basis, 2020 sales into the Americas market increased 19.8% year-over-year. China remained the largest individual market for semiconductors, with sales totaling $151.7 billion in 2020, an increase of 5%. Annual sales also increased in Asia Pacific/All Other (5.3%) and Japan (1%), but decreased in Europe (6%). Sales for December increased slightly compared to November in Asia Pacific/All Other (0.8%) and Japan (0.1%), but fell in Europe (0.2%), the Americas (3%), and China (4.5%).

Logic ($117.5 billion in 2020 sales) and memory ($117.3 billion) were the largest semiconductor categories by sales. Annual sales of logic products increased by 10.3% compared to 2019, while sales of memory products were up 10.2%. Within the memory category, annual sales of NAND flash products increased 23.1% to $49.5 billion in 2020. Sales of micro-ICs — a category that includes microprocessors — increased 4.8% to $69.6 billion. Sales of all non-memory products combined increased 5.2%, reaching an all-time high in total sales.

For its part, IDC says the DRAM and NAND markets recovered in 2020 after a poor 2019, growing 4% and 32.9%, respectively. IDC forecasts the semiconductor market will reach $476 billion in 2021, a 7.7% year-over-year growth rate, as the various Covid-19 vaccines are disseminated, and economies gradually recover.

"The nature of the recovery will depend on how quickly government stimulus plans stabilize the global macroeconomy and consumer confidence improves as vaccinations roll out around the world," said Mario Morales, program vice president, Enabling Technologies and Semiconductors at IDC. "There are specific markets that remain on an upward trajectory and are essential to the recovery this year, including 5G, cloud, intelligent edge, and the dedicated foundry industry. The first half of the year will also see some inventory digestion in the enterprise, cloud, and telco equipment market, but we do not expect it to derail the growth for the year. Semiconductor technology remains critical across every industry on our journey to a sustainable recovery."

The market for semiconductors in computing systems, such as PCs and servers, outpaced the overall semiconductor market, growing 10.9% year-over-year to $152 billion in 2020.

"Measures to control the Covid-19 infection forced workers and students to stay at home, which forced corporations and consumers alike to acquire PCs," said Shane Rau, research vice president, Computing Semiconductors. "Further, the dispersal of workers and students away from centralized locations forced cloud service providers, telecommunications providers, and corporate IT departments to invest in their computing infrastructure."

IDC forecasts computing systems revenues will grow 6.3% to $161 billion in 2021.

Smartphones were the second largest demand driver for 2020, with the growth in 5G phones accelerating significantly, says IDC. Healthy competition for lower cost 5G SoCs resulted in 5G phones being sold at a wide variety of price ranges to reach a broader set of consumers.

"Mobile phone shipments fell by more than 5% in 2020, but mobile phone semiconductor revenues will have grown by about 3% due to a shift to higher ASP 5G semiconductors, more memory, sensors, and RF support for more spectrum bands," said Phil Solis, research director for Connectivity and Smartphone Semiconductors. "2021 will be an especially important year for semiconductor vendors as 5G phones capture 30% of all mobile phone shipments, while semiconductors for 5G phones will capture nearly 54% of the revenue in the segment.”

IDC forecasts mobile phone semiconductor revenues will grow 11.4% in 2021 to $128 billion.

The automotive and industrial semiconductor markets were significantly impacted by Covid-19, which created sales disruption and manufacturing disruptions, while trade policy impacted supply chains throughout the year. Sales improved in the third quarter, but automotive OEMs are experiencing manufacturing disruptions due to semiconductor shortages, as some semiconductor foundries allocate production. Automobile sales, including light commercial vehicles, in 2020 declined 14.5% to 71 million vehicles, resulting in an 8.4% decline in automotive semiconductor revenues to $37 billion.

"An automotive recovery in 2021 depends on the rate of vaccination and how well the vaccinations defend against the new variants of Covid-19 that are emerging around the world,” said Nina Turner, research manager for Automotive Semiconductors. "Semiconductor content growth in vehicles continues to outpace vehicle unit sales growth, with growth in semiconductors that enable electrification, infotainment and connectivity, and ADAs."

For 2021, IDC forecasts non-memory automotive semiconductor revenue will grow 12.6%.

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