2022 semiconductor industry outlook has been saved
2022 semiconductor industry outlook
Analyzing key trends and strategic opportunities
Although it took recent chip shortages to cement their “critical” status, semiconductors have now established their place as a truly essential industry. So what’s next? Our 2022 semiconductor outlook takes a closer look at four key trends expected to shape the industry in the year ahead.
Entering a period of robust growth
In 2022, the global semiconductor chip industry is expected to reach about US$600 billion. But while it’s still dwarfed by farming, oil, and gas—industries that are worth an annual US$10 trillion and US$5 trillion in revenue respectively—80% of the world’s food or fuel doesn’t come from a handful of manufacturers concentrated in a just a few countries.
Across multiple end markets, the absence of a single critical chip, often costing less than a dollar, can prevent the sale of a device worth tens of thousands of dollars. Based on our analysis, the chip shortage of the past two years resulted in revenue misses of more than US$500 billion worldwide between the semiconductor and its customer industries, with lost auto sales of more than US$210 billion in 2021 alone.
Over the long run, semiconductor revenues are likely to oscillate around a trend line. Still, that trend line looks steeper than ever before as we enter a period of robust secular growth.
- We expect the global industry to grow 10% in 2022 to over US$600 billion for the first time ever. Chips will be even more important across all industries, driven by increasing semiconductor content in everything from cars to appliances to factories, in addition to the usual suspects—computers, data centers, and phones.
- We expect shortages and supply chain issues to remain front and center for the first half of the year, hopefully easing by the back half, but with longer lead times for some components stretching into 2023, possibly well into 2023.
- The ongoing talent shortage will be made even more severe by the addition of increased semiconductor manufacturing facilities outside Taiwan, China, and South Korea. The higher demand for software skills required to program and integrate chips into fast-growing markets will further exacerbate the shortage.
- Finally, we expect the digital transformation within the industry to continue and accelerate. Nearly three out of five chip companies have already begun their transformation journey. Still, over half of those are modifying their transformation process as they go, in response to various pressures.
Download the full report to learn more about the impacts of semiconductor industry trends, key actions to take, and critical questions to ask.