Covid-19: Semiconductors at the Heart of Turmoil

An article written by Eric Mounier and Guillaume Assogba from Yole Développement (Yole), for EETIMES.

More than a year has passed since the Covid-19 pandemic began infecting the world. It has brought more than 2 million deaths and perpetual economic damage. With significant global impact on the semiconductor industry’s end markets, how long will it take the semiconductor economy and the markets in which it plays to recover?

The Covid-19 pandemic delivered an enormous global shock, leading to steep recession in many countries. According to the International Monetary Fund (IMF)’s October 2020 predictions, the effects of Covid-19 will result in a 4.4% contraction in global gross domestic product (GDP) in 2020 — despite the unprecedented policy support that helped to limit the damage. Although the global economy is expected to rebound strongly in 2021, with GDP growth of 5.2%, the semiconductor market has been adversely affected by the pandemic.

Yole Développement (Yole) has analyzed the different markets where innovations are closely linked to semiconductors: telecom and infrastructure, mobile and consumer, defense and aerospace, medical, industrial, automotive, and mobility.

Market-Specific Semiconductor Forecasts

Covid-19 is expected to have an unprecedented impact on the global economy but with different consequences by market. The pandemic is similarly affecting demand for automotive, laptops, IoT applications, and other devices that rely heavily on semiconductors — which has an impact on the semiconductor industry.

In the next five years, semiconductor demand will remain saturated, with just 1.3% growth overall. And yet the impact of Covid-19 on different semiconductor markets will not be uniform. In 2020 consumer and mobile markets, Yole expected a reduction of between 9.5% and 3% in smartphone units and between 3% and 1% in tablets. Our range of estimates reflects the unpredictability of the level of health crisis to come. Wearables and other IoT devices look better, with growth at ~7%… Full article