Mon, October 03, 2022

Chip sales grow in 2022 as risks rise

Chip industry

The analysts predict that semiconductor sales will grow by 10% and overpass $600 billion in 2022. That’s on top of the 27% growth in 2021.

Chipmakers turned out to be winners in the current pandemic. Experts predict that the momentum in the semiconductor space will remain strong in 2022.

According to a report released Monday by trade credit insurer Euler Hermes, chip sales will grow in 2022.

Analysts at Euler Hermes said that semiconductor sales would grow by another 10% in 2022.

The semiconductor shortage that lasted more than a month impacted many industries during the current pandemic. As chipmakers struggled to keep up with unusual demand, these shortages affected carmakers and other industries.

While major chipmakers have already declared projects to expand capacity, these facilities can take years to come online. One of the chipmakers, TSMC’s shares listed in Taiwan, have already increased more than 81% in two years.

Analysts from Euler Hermes said that three factors have driven up sales so far.

These factors are:

  1. Demand: The unexpectedly strong need for customer electronics, such as computers and smartphones
  2. Prices: An increase in costs due to limited supply and demand dynamics
  3. Improved product mix: Further advancement in product mix for semiconductors due to higher-priced; the appearance of new generation chips

Risks for the chip sector

The analysts said those three market drivers might lessen as demand growth normalizes. Also, it will ease as new production capacities come online.

According to the sector advisor for technology and retail at Euler Hermes, Aurelien Duthoit, several factors might set the tone for 2022. Beyond normalization of demand in personal computers and smartphones, Duthoit identified unexpected and random factors. He said that these factors hurt central semiconductor manufacturing places like Taiwan and South Korea.

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