Chip Shortage May Turn to Overcapacity by 2023, IDC Reports


Semiconductor shortages which have affected the telecom industry may end soon, according to an IDC Semiconductor Forecaster. Chip shortages are expected to continue easing through 4Q21 as capacity additions accelerate.

The market will grow 17.3 percent in 2021 (over 10.8 percent in 2020), according to an IDC report. However, following a period of balance in 2022, it may surge in overcapacity in 2023, as larger scale capacity expansions begin to come online, according to Mario Morales, Group Vice President, Enabling Technologies and Semiconductors at IDC. 

“Growth is driven by mobile phones, notebooks, servers, automotive, smart home, gaming, wearables, and WiFi access points, with increased memory pricing,” Morales said. “The semiconductor content story is intact and not only does it benefit the semiconductor companies, but the unit volume growth in many of the markets that they serve will also continue to drive very good growth for the semiconductor market.”

Despite the current COVID-19 wave, consumption remains healthy, according to IDC, and dedicated foundries are running at capacity. 

According to IDC, 5G semiconductor revenues will increase by 128 percent, with total mobile phone semiconductors expected to grow by 28.5 percent. Semiconductor wafer prices increased in 1H21 and IDC said it expects increases to continue for the rest of 2021 because of 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 percent through the forecast period, higher than the typical 3-4 percent growth seen historically.

Reader Interactions

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.