According to Handel Jones of IBIS:
The semiconductor market is in a strong growth mode, but increasing inflation is starting to reduce purchases of electronics equipment in a number of areas. An example is that sales of smartphones in China declined from 30 million in January 2022 (consistent with monthly volumes in 2021) to 14 million in February 2022. Wireless communications represents 40% of the semiconductor market, and impact can be big, and it is important to monitor activities in the smartphone market. Data centers, which represent 14% of the semiconductor market, are in very strong growth mode. Shortages of semiconductors in automotive continue to be very serious and not likely to be resolved before the end of 2022.
It is, however, important to monitor the impact of inflation on demand for electronics products in a number of areas in order to have early visibility into areas of potential shortages. Supply chain activities in many areas are impacted by the attempts to control COVID in China, but companies have been able to compensate for these limitations to date.
The invasion of Russia into Ukraine, however, will have a major impact on oil and natural gas supplies to a number of countries. There is also high probability of shortages of neon gas and other supplies for the semiconductor industry by the end of 2022.
While it is projected that the semiconductor industry will have positive growth in 2022 and potentially 2023, there are a wide range of risk factors that can result in large changes in demand in a short time.
The semiconductor market is in a strong growth mode, but increasing inflation is starting to reduce purchases of electronics equipment in a number of areas. An example is that sales of smartphones in China declined from 30 million in January 2022 (consistent with monthly volumes in 2021) to 14 million in February 2022. Wireless communications represents 40% of the semiconductor market, and impact can be big, and it is important to monitor activities in the smartphone market. Data centers, which represent 14% of the semiconductor market, are in very strong growth mode. Shortages of semiconductors in automotive continue to be very serious and not likely to be resolved before the end of 2022.
It is, however, important to monitor the impact of inflation on demand for electronics products in a number of areas in order to have early visibility into areas of potential shortages. Supply chain activities in many areas are impacted by the attempts to control COVID in China, but companies have been able to compensate for these limitations to date.
The invasion of Russia into Ukraine, however, will have a major impact on oil and natural gas supplies to a number of countries. There is also high probability of shortages of neon gas and other supplies for the semiconductor industry by the end of 2022.
While it is projected that the semiconductor industry will have positive growth in 2022 and potentially 2023, there are a wide range of risk factors that can result in large changes in demand in a short time.
