Semiconductors are vital to the economy of almost every country in the world. However, the industry is facing significant challenges.
Fabs are operating at full capacity even as companies struggle to keep pace with demand, leading to lead times of six months or more. Furthermore, the effects of the pandemic, a talent shortage and spiraling design complexity mean that an industry that must ride high is under increasing pressure.
Amid rising demand, semiconductor markets have boomed, with sales rising more than 20% to nearly $600 billion in 2021. However, global chip shortages have caused a manufacturing slowdown in industries from auto to agriculture, and have caused debate over the credibility of an industry. which is important for the global economy.
In the US, the federal government has responded with a number of laws, including the CHIPS for America Act, which authorizes $52 billion in funding to expand the domestic semiconductor industry. The new rules aim to protect industries from supply shortages and reduce their reliance on manufacturing plants in Asia. Companies including Intel, Samsung, Texas Instruments and GlobalFoundries are planning to add more capacity in the US, and Europe is also seeing significant investments.
The recent ramp up in productive capacity reflects the consensus that, despite the current environment, the long-term outlook for the semiconductor industry remains positive. From home kitchens to the most advanced manufacturing plants, semiconductors are embedded in modern economies. Combine this with an increase in household chores, and the direction the industry will travel isn’t hard to predict.
We forecast growth of 6% to 8% per year by 2030Amidst the growing demand for digital services, the growth of artificial intelligence and machine learning (AI/ML), and the massive migration to electric mobility. On that trajectory, we predict a trillion-dollar industry by the end of the decade.