According to Gartner, global revenues of semiconductor vendors reached $583 billion in 2021 and grew by 25.1% compared to 2020. For the first time, the revenues of this sector of the market exceeded $500 billion.
The experts explained that against the backdrop of a global shortage of chips and a shortage of problems in the supply chain in the market, the demand for chips now far outstrips supply, which is one of the main reasons for the record profits of large participants in the semiconductor industry. Also, an increase in the cost of logistics services and an increase in the cost of raw materials needed for production led to an increase in the average price in the semiconductor market, which contributed to the overall growth in revenue of chip manufacturers in 2021.
In the Gartner study, we are talking about income from the sale of chips to end customers, and not about the income of representatives of the foundry business from the production of semiconductor integrated circuits (TSMC, UMS, SMIC, GlobalFoundries and others), which are also doing well.
Ten companies received record profits from the sale of chips in a total amount of about $326 billion in 2021: Samsung Electronics, Intel, SK Hynix, Micron Technology, Qualcomm, Broadcom, MediaTek, Texas Instruments, Nvidia and AMD. Other companies from the semiconductor industry received $257.5 billion.
The drivers of the semiconductor market in 2021 are the automotive industry and the production of 5G smartphones. For example, in 2021, the production volume of chips for new generation mobile devices reached 555 million units.
Market experts explained that US sanctions imposed on Chinese chip maker Huawei have led Qualcomm and MediaTek to grow more than 50% in 2021 compared to 2020, while Huawei, on the contrary, has lost the market in which it previously was one of the leading players. Thus, the revenue of HiSilicon, Huawei's chip manufacturing subsidiary, decreased from $8.2 billion in 2020 to about $1 billion in 2021.
In 2021, Samsung regained the top spot in the semiconductor industry by revenue for the first time since 2018, overtaking Intel. Samsung managed to do this by increasing the production of smartphones and sales of chips to third-party vendors.
Gartner predicts that earnings for semiconductor companies in 2022 may still age. Moreover, this will happen even against the background of the current large-scale transformations in this market, which requires multibillion-dollar costs. Chip manufacturers began to localize production, build new factories in China, the United States and other countries. They have begun a digital transformation within their companies and are changing their development strategy to work in the optimal mode for their customers with the maximum return on the capabilities and capacities of their production facilities.
TSMC said last spring that the chip shortage will continue into 2022. Key chip makers will have to raise costs, launch new factories and adjust their growth plans. This position is shared by NVIDIA.
In October 2021, Intel CEO Pat Gelsinger stated that chip shortages worldwide would continue until at least 2023. His words were confirmed by Nvidia.
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