The global chip market continues to grow, but growth is returning to more realistic proportions. The chip shortage will continue to be felt for now.
After a huge year of growth in 2021, IC Insights analysts are predicting more subdued growth in semiconductor sales in 2022. Still, the market is heading for a record, with anticipated total sales worth more than $680 billion.
More limited growth
Specifically, growth would be about 11 percent compared to last year. From 2020 to 2021, market sales grew by a solid 25 percent. The pandemic was the driver for this. Existing supply could not keep up with the high demand for chips, which caused factories to run at full capacity and allowed manufacturers to drive up margins. Shortages did cause problems elsewhere in the logistics chain, but that did not show in overall sales.
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Chip market grows slower amid persistent shortages
By 2022, the biggest problems with higher-margin high-end chips such as laptop processors promise to be solved. GPU availability still remains problematic, but that should also improve significantly by the second half of this year.
Simple chips
The biggest problems are currently in cheaper and less complex chips, for which margins are smaller. These are critical for a lot of devices, but do not roll off the assembly line sufficiently. Canon recently announced that it will temporarily ship toner without smart chips for that reason.
Meanwhile, chip production capacity is growing, but investment in factories for such simple chips remains risky. Building chips will remain a profitable and growing business in 2022, although this does not eliminate all the problems in the logistics chain.