Employees wearing clean room suits walk under Automated Material Handling Systems (AMHS) vehicle robots moving along ceiling rails inside the GlobalFoundries semiconductor manufacturing plant in Malta, New York, United States, Tuesday March 16, 2021.
Adam Glanzman | Bloomberg | Getty Images
Chipmakers have been clear winners in the era of the pandemic, and momentum in the semiconductor space is expected to remain strong through 2022, according to a report released Monday by commercial credit insurer Euler Hermes.
“The current semiconductor cycle has been in full swing since the industry emerged from its worst recession in 2019,” Euler Hermes analysts said.
Semiconductor sales are expected to rise a further 9% to cross $ 600 billion for the first time in 2022, analysts predicted. This comes on top of the 26% growth to $ 553 billion in 2021, they added.
A semiconductor shortage that lasted for months during the pandemic impacted a wide range of industries – from automobiles to game consoles – as chipmakers struggled to meet unprecedented demand as the global economic activity was rebounding after the Covid crisis.
While major chipmakers like TSMC have already announced plans to increase capacity, it typically takes years for these facilities to come online. Taiwan-listed TSMC shares have already jumped more than 80% in about two years.
Three factors have driven sales so far, Euler Hermes analysts said. They are:
- Request: ‘Unusually high demand’ for consumer electronics, such as personal computers and smartphones
- Prices: A rise in prices due to a dynamic of supply and tense demand
- Improved product mix: Further improvement of the semiconductor product line due to the introduction of more expensive and next-generation chips.
Risks for the chip industry
Turning to the new year, analysts said those same three market drivers are expected to subside as demand growth normalizes and new production capacity is brought online on an accelerated basis.
In addition, analysts have identified four risks facing the semiconductor industry:
- Hardware sales (for products like computers and televisions) are impacted more than expected by normalization of demand after strong growth in 2020 and 2021;
- With demand for semiconductors being affected by any prolonged freeze in manufacturing activity, as supply chain disruptions from the pandemic continue;
- A “status quo” between China and the United States in their battle for technological supremacy, with restrictions still in place for Chinese companies that acquire essential American semiconductor manufacturing technology and equipment;
- An “increasing frequency of exceptionally unfavorable climatic events” is proving to be a major issue for the semiconductor sector, which relies on optimal use of capacities for its profitability.
Several factors should also “set the tone for 2022” in the chip sector, according to Aurélien Duthoit, sector advisor for technology and distribution at Euler Hermes.
Beyond normalizing demand in areas such as computers and servers, Duthoit identified factors such as “unpredictable and random events” that are hurting major semiconductor manufacturing sites like Taiwan and Korea. from South.
New developments in the technological “cold war” between the United States and China could also prevent semiconductor technology specialists from selling to Chinese companies, he added.