5G Driving the Demand for Semiconductor Manufacturing

The demand for semiconductors worldwide continues to outpace their supply and to reach a level off by 2023.

FORMAT, CA: The demand for semiconductors continues to outpace supply, and this year's global semiconductor revenue is expected to rise by 13.6 per cent. However, the growth will likely remain steady in 2023 with just a 3.6 per cent gain. The recent chip shortage that caused broad supply constraints is starting to alleviate, but for the foreseeable future, the demand will continue to outpace supply in key industries–most notably the automobile sector.

Automotive high-performance computing, electrical and hybrid-electric vehicles, and advanced driver assistance systems will lead the growth in automotive electronics sectors. Although unit production of automotive vehicles will grow below expectation at 12.5 per cent in 2022, semiconductor device prices are expected to remain high due to continued insufficient supply. Sales of endpoints, particularly PCs, servers, and cellphones, are expected to slow down, which will eventually lead to a more balanced supply/demand situation.

As 5G smartphone production increases by 45.3 per cent, surpasses 4G/LTE and accounts for 55 per cent of the 808 million devices estimated to be manufactured this year, 5G deployments are also anticipated to boost semiconductor revenue this year. The resulting increase in supply will keep overall 5G phone price points lower and contribute to a rise in 5G penetration in the upcoming year.