Semiconductor Cyclical Growth Accelerating in 2021

The semiconductor industry proved resilient in 2020 despite challenges presented by COVID-19. For 2021, our algorithms predict another strong year for the key chip makers, with 14% growth in revenue (versus 12% in 2020). We predict the strongest categories to be analog, wireless, and compute/graphics.

Driving analog’s growth is the rebound in the automotive and industrial end markets and continued growth in communications. Wireless segment growth is being fueled by increasing global 5G network deployments and the refresh cycles in smartphones due to migration to 5G. Our algorithms predict continued high demand for compute/graphics as PC and gaming sales stay strong. Additionally, the aggressive increase in capex spending by hyperscale cloud providers in 2020 will continue into 2021, albeit at a slower rate. We predict memory and storage to benefit from increased pricing in NAND and DRAM caused by decreasing inventory. Both hyperscale cloud and service providers capital expenditure will also have a positive impact on the networking/wireline segment.

Overall, the key drivers are cloud expansion, gaming, 5G deployments, enterprise spend recovery, semiconductor content growth in automotive, and industrial automation. We expect these drivers to lead another solid year.

We employ a comprehensive dataset based on US and international semiconductor companies’ supply chains, quarterly/annual filings, investor presentations, and public news to accurately assess the industry. Continuously learning proprietary algorithms that select and interconnect data generate real-time predictions.