Despite prolonged global pandemic semiconductor market steams ahead

LONDON (January 6 2021) – The semiconductor market roared in Q3 2020 with the industry growing revenue 10.8% from the previous quarter to over $120 billion. This industry has benefited from the coronavirus pandemic as this has shifted the economy towards a technology-driven focus. Working and learning from home continued to be extended in Q3 2020 as the pandemic persists, increasing demand for devices and infrastructure to support this while the semiconductor market entered its seasonal high demand period. The combined result was a banner quarter for many semiconductor firms. 

Revenue for the semiconductor industry in Q3 2020 achieved the highest market since Q3 2018 and the second highest mark overall since Omdia (formerly iSuppli and IHS Markit) began tracking semiconductor revenue in 2002. Comparing this strong Q3 2020 with Q3 2019 further underpins the strong quarter, with 10.4% growth year-over-year (YoY). 

 

Wireless and consumer lead the charge Strong semiconductor growth occurred across all major semiconductor application markets. But the wireless and consumer categories were out front driving this growth.

The wireless segment, representing 30% of all semiconductor market revenue grew 18.7% quarter-over-quarter (QoQ) and 12.7% YoY. The increasing availability of 5G smartphones and further 5G infrastructure buildout helped spur demand in this segment. Leading component makers in this field Qualcomm, Samsung, and SK Hynix all experienced double-digit growth in wireless revenue. 

The consumer segment also experienced strong growth, led by the release of next generation video game consoles and entering the strong seasonal period. Growth in this segment was up 25% QoQ, well above the historical average of 11% for Q3 over Q2 growth (average taken from 2002 through 2019). The last occurrence of growth in this segment this strong was in Q3 2009, immediately following strong declines due to the global recession. While Q3 2020 was a remarkable quarter for the consumer segment, it is worth noting that it accounts for a smaller share of the overall semiconductor market. Consumer-related semiconductor revenues accounted for just under 10% of all semiconductor revenue in Q3 2020. 

Top-10 Market Share Movement The top-ten semiconductor companies remained largely stable. The top four, with memory chip makers accounting for three of them, of Intel, Samsung Electronics, SK Hynix, and Micron remain unchanged from the previous quarter’s rankings. Qualcomm rose one spot, from sixth to fifth as their strong wireless segment focus lift them. MediaTek, a company focused on smartphone and consumer-segment products, was the only firm to enter the top-ten from outside, rising from 12th to 9th on revenue increasing over 50% from the previous quarter. Another firm benefiting from the increased demand in the smartphone segment. Hisilicon dropped two spots in the rankings as MediaTek jumped over. Hilicon’s sales increased slightly but are being negatively impacted due to sanctions levied against its parent company, Huawei.

Cliff Leimbach, senior analyst Memory and Storage at Omdia, commented:

“The coronavirus shifted the economy to a different focus, one driven much more by technology. Work-from-home and learn-from-home stayed strong as the pandemic has prolonged and expectations adjusted. This has kept demand for data centers and infrastructure strong through Q3 2020. Additionally, 5G infrastructure, smartphones, and demand across all consumer products and devices have experienced uplift as people realized they would be staying home for a much longer time.”

-ENDS-

 

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