Cashing in Their Chips: Semiconductor Industry Reports Record Earnings in 2021

According to a new Gartner report, semiconductor industry revenue set records in 2021, climbing 25.1% to $538.5 billion as the economy rebounded and well-documented shortages drove up prices for available chips. 

“As the global economy bounced back in 2021, shortages appeared throughout the semiconductor supply chain, particularly in the automotive industry,” said Gartner Vice President of Research Andrew Norwood. “The resulting combination of strong demand as well as logistics and raw material price increases drove semiconductors’ average selling price higher, contributing to overall revenue growth in 2021.”

Further increasing revenue was the more than doubling of 5G cell phone production. 555 million units rolled off assembly lines this year against only 250 million in 2020. 

It wouldn’t be an article on the supply chain without at least one mention of the Covid-19 pandemic, and we see it when Gartner breaks down the growth of the industry across different chip types. Memory chips, like the ones in PCs and high-end mobile devices, saw the largest increase by category, with sales up $42.1 billion against 2020, accounting for a whopping 33.8% of market share. Why memory? It’s what cloud companies use to make technologies like remote working and learning possible, and we’ve been doing more of that than ever.

Samsung Electronics earned the #1 spot in total revenue for the first time since 2018, beating out rival Intel, based largely on income from the memory chips mentioned above. 

It’s impressive, if not improbable, for an industry to see such remarkable growth during a time of disruption and shortages, and it only underscores how essential semiconductors are to all aspects of our life.

Moving Forward

 Gartner also says that procurement strategies will play a major role in mitigating the risk of shortages going forward, which makes sense.  We’re offering you complimentary access to the research here, in exchange for a quick registration. 

Additionally, visibility and market intelligence will be instrumental in securing chips for the next several years, and our Commodity IQ solution is a transformed approach to market research that’s focused specifically on the complexities of the electronics industry.

After all, it’s an entirely new marketplace out there. Demand for chips will likely only grow and the pressure to secure supply will grow along with it. Give yourself, and your business, the intelligence and insight  it will need to stay ahead of the curve.