The semiconductor market saw strong growth in 2020 as the industry marked its third year in the last four of double-digit expansion, despite turmoil from the coronavirus that disrupted many global industries, according to Omdia.
Rapid shifts in consumer behavior over the past year pushed the world into a technology-driven focus, and demand increased rapidly for devices and infrastructure to support the new work- and educate-from-home environments in the face of pandemic-driven restrictions. As a result, semiconductor revenue grew 10.4% in 2020 over 2019 to finish last year at US$473.3 billion, Omdia indicated.
The last three months of 2020 were the best quarter ever recorded for semiconductor revenue, reaching US$130.6 billion and eclipsing the previous high of US$130.4 billion in the third quarter of 2018, Omdia noted. The second half of 2020 was much stronger than the first, when deep uncertainty abounded as the pandemic quickly spread throughout the globe.
But the first half of 2020 wasn't all bad for the semiconductor market, Omdia continued. The immediate shift to work-from-home and educate-from-home drove a need for cloud infrastructure to sustain it. DRAM and NAND were major beneficiaries of this trend, with memory IC revenue up 10% from the first quarter. This helped sustain the semiconductor market when other areas struggled before they grew strongly later in 2020.
For the top semiconductor firms, stability reigns again in 2020, according to Omdia. The top seven semiconductor firms have occupied the top seven slots since 2016, although the order has alternated amongst them. The top 10 of 2019 was also the top 10 of 2020, except for ST Microelectronics, which slipped from eighth to 12th in 2020 despite seeing semiconductor revenue increase 6.9% for the year.
Notable growth came to the major mobile processor firms, Omdia indicated. Large revenue increases by Qualcomm and MediaTek were driven by strong demand for smartphone chipsets to close out 2020 as 5G continues to ramp. Both firms experienced greater than 45% growth in the second half of 2020 from the first half of the year in this segment. Despite this strong growth, Qualcomm rose only from sixth in 2019 to fifth in the 2020 semiconductor market share rankings. Intel continues to lead the market with the major memory makers - Samsung Electronics, SK Hynix and Micron Technology - rounding out the top-four.
The memory market was a primary contributor to the 2019 decline in semiconductor revenue, with DRAM declining 37.2% and NAND declining 24.6%. Both memory types returned to growth in 2020, with DRAM up 6.7% and NAND a robust 24.3%, Omdia noted.
MPU revenue, representing 14% of the entire semiconductor market, increased 12.4% in 2020 driven by laptop and desktop increases as people were forced to work and study from home. While COVID-19 has been a disadvantage to travel and social interaction, the MPU market has reaped some of the most benefits, Omdia suggested.
Analog components, also representing nearly 14% of the semiconductor market, saw revenue increase 26% in the second half of 2020 from the first half. The category grew 9% in 2020, spurred by 20% growth in ASSPs for wireless communications, Omdia said.
The automotive semiconductor market struggled in 2020, experiencing an annual decline of 4.4%, according to Omdia. But the market ended 2020 with positive signs as demand began returning at the end of 2020. Unfortunately, this return in demand was hampered when automakers came back with orders for semiconductor parts that were more difficult to procure. Capacity on production lines for these parts was already largely allocated to other components that had also increased in demand.
"The automotive market was hugely impacted by the coronavirus pandemic in the first half of 2020," commented Omdia senior analyst Sang Oh. "Unused semiconductor inventory from 1H20 was used into 2H20 for automakers. But consumer demand returned beyond what the revised downward forecasts anticipated. As automakers have been running through their vehicle inventory in 2H20, they are changing their vehicle sales forecast and need to pump out more vehicles to meet demand. The automotive semiconductor market will bounce back in 2021 from the decline of 2020."
