The industry will see normalisation and balance by the middle of 2022, says IDC, with a potential for overcapacity in 2023 as larger scale capacity expansions begin to come online towards the end of 2022.
Growth is driven by mobile phones, notebooks, servers, automotive, smart home, gaming, wearables, and Wi-Fi access points, with increased memory pricing. IC shortages are also expected to continue easing through 4Q21 as capacity additions accelerate.
Foundry capacity has been allocated for the rest of the year, says IDC, with capacity utilization at nearly 100%.
Front-end manufacturing is starting to meet demand in 3Q, but shortages will remain in back-end manufacturing and materials.
According to IDC, 5G Semiconductor revenues will increase by 128%, with total mobile phone semiconductors expected to grow by 28.5%. Game consoles, smart home, and wearables will grow +34%, 20%, 21% respectively.
Automotive semiconductor revenues will also increase by 22.8% as shortages are mitigated by year end. Notebook semiconductor revenues will grow by 11.8%, while X86 Server semi revenues will increase by 24.6%.
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Semiconductor wafer prices increased in 1H21 and IDC expects increases to continue for the rest of 2021 due to material costs and opportunity cost in mature process technologies.
Overall, IDC predicts the semiconductor market to reach $600 billion by 2025 – representing a CAGR of 5.3% through the forecast period. This is higher than the typical 3-4% mature growth seen historically.