Semiconductor sales are expected to grow 9% in 2022 and cross $600 billion for the first time, says trade credit insurer Euler Hermes which expects demand to normalise in 2022.

EH sees demand as having been driven by consumer electronics, such as personal computers and smartphones, an increase in prices due to tight supply and an improved product mi as a result of higher priced and the introduction of new generations of chips.

Changes in the new year are seen as the normalisation of demand growth and production capacities coming online in an accelerated fashion.

Risks faced by the semiconductor sector include:

Hardware sales (for products like computers and TV sets) taking a larger-than-expected hit from demand normalization after strong growth in 2020 and 2021;

Demand being hit by any period of prolonged freeze in manufacturing activity, as supply chain disruptions from the pandemic continue;

A “standstill” between China and the U.S. in their battle for tech supremacy, with restrictions still in place for Chinese companies acquiring critical U.S. semiconductor manufacturing tech and equipment;

An “increasing frequency of unusually adverse climatic events” proving to be a major challenge for the semiconductor sector, which relies on optimal capacity utilisation for its profitability.

Fresh developments in the technological “Cold War” between the U.S. and China could also prevent semiconductor technology specialists from selling to Chinese companies.

By: DocMemory
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