Report: Worldwide semiconductor revenue rose by 7.3 percent in 2020

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The world's top ten chip companies saw increased revenue for Q2 2020.

Gartner, a research and advisory group, recently published its findings about the state of the global semiconductor industry in 2020.

Most notably, it discovered that global electronic components revenue hit $449.8 billion last year, up 7.3 percent annually. That outcome contrasts strongly with 2019’s total sales, which fell by 12 percent year-over-year.

The organization found the coronavirus pandemic had a multifaceted impact on the sector, boosting some segments while hurting others. The firm also identified 5G as one of 2020’s key growth drivers, which helped some chipmakers increase their yearly income by more than 30 percent.

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COVID-19’s Varied Effect on 2020 Chip Sales

Gartner opened its 2020 analysis by noting the coronavirus pandemic’s impact on the semiconductor industry defied conventional wisdom. Initially, market watchers expected the global health crisis to drag down the sector, and it did, but only certain segments. The firm found the automotive, industrial, and some parts of the consumer electronic spheres suffered because of COVID-19.

The organization’s data corresponds to the forecast Omdia offered in June 2020. That analytics company predicted that pandemic-related production shutdowns and diminished consumer demand would curtail vehicle power components sales.

Gartner noted that widespread remote work and learn from home transitions created a rush to buy personal computers. That massive spike in demand helped the semiconductor industry overcome the coronavirus headwinds it encountered in early 2020.

The group also found COVID-19 created a surging demand for server chips among hyperscale data center providers. Amazon, Microsoft, and Google moved to acquire large quantities of high-performance computing (HPC) and flash memory products to cope with enormous service usage increases.

Gartner said that development led to 65 percent of 2020 server component sales coming from the hyperscale segment. That field also helped swell memory revenue, which accounted for 44 percent of the semiconductor industry’s annual income upswing.

Individual Chipmaker Growth in 2020

Unsurprisingly, the research organization determined the coronavirus pandemic was the most significant semiconductor industry growth driver in 2020.

The firm asserts consumer and enterprise reactions to COVID-19 increased sales of central processing units (CPUs), NAND flash chips, and DRAM modules. The company pointed out that the trend is reflected in the year-over-year expansion of certain manufacturers.

Market leader Intel saw its income expand by 3.7 percent due to coronavirus-related market conditions, and Samsung enjoyed a 7.3 percent bump for the same reason. Similarly, memory component makers SK Hynix and Micron experienced 13.3 percent and 9.1 percent yearly revenue growth in 2020, respectively.

Kioxia Holdings received the largest income boost of any memory provider last year, with its intake jumping by 30.4 percent. The chipmaker probably owes some of its gains to large orders from Apple, which refreshed its lineup late last year. The former Toshiba Memory previously derived 22.8 percent of its total sales from the Big Tech giant.

Nvidia also benefited from the rising tide brought about by the “new normal,” as its revenue climbed 37.7 percent annually. The company received strong demand for graphics processor units (GPUs) from hyperscale clients and businesses interested in automating their operations.

Gartner identified the ongoing rollout of 5G as a big 2020 growth driver.

The technology acted as a major needle mover last year because of the high cost of fifth-generation networking products and expanded wireless coverage in regions like China and the U.S. Qualcomm and MediaTek, makers of handset system-on-a-chips (SoCs), expanded their sales last year by 31.5 and 38.3 percent, respectively.

Since COVID-19 and the 5G rollout are still shaping the global semiconductor industry, it will be interesting to see how the landscape shifts in 2021.

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