Chip sales are seen to be flourishing in sales for 2022 despite the ongoing pandemic surge worldwide.
According to the analysts from Euler Hermes, a known credit insurance company in Paris, the industry will see a 9% growth. It will reportedly also cross $600 billion for the first time this year.
However, the experts said that there are risks that would come from this forecast.
Chip Sales Growth in 2022
Trade credit insurer Euler Hermes released a report on Monday, Jan.3 that the semiconductor business will have a strong run in 2022 amid the COVID-19 pandemic.
The Paris-based firm noted that the cycle for the chipmakers would "fire on all cylinders" since the industry nose-dived two years ago. So far, it's the worst run for the semiconductor space, according to CNBC's report.
Analysts from Euler Hermes said that the growth for the chip industry would scale for nearly 10% (another 9%). On top of that, the experts added that it would take place on top of the 26% increase in sales in 2021 which accounts for $553 billion.
Before this prediction, the COVID-19 pandemic has affected several companies that rely on chips. Tech Times reported that Intel CEO Pat Gelsinger believed that the chip shortage might last until 2023.
Indeed, the extent of the impact did not only affect computer-dependent firms, but also those startups and companies that produce automobiles, gaming consoles, appliances, electric cars, and more.
With the surge in demand, the firms could not keep up with it anymore since the supplies for the semiconductor chips were limited.
Related Article: Acer: Global Chip Shortage to Happen Until 2022-Laptop, Semiconductor Production Faces Crisis
Chipmakers Could Face These Risks
The growing sales of chipmakers vary from one another. For instance, popular semiconductor producer TSMC confirmed that it would be expanding its capacity in the next few years.
The Taiwan-based firm has seen an increase of over 80% on its shares in just two years. Euler Hermes listed three important factors that affect the movement of sales. These are demand, price, and improved product mix.
While the chip industry is expected to bloom this year, the analysts warned the chipmakers of the risks that they could encounter in the market. Here's what they shared in a report from CNBC.
The US-China tech dispute would be critical for the chipmakers especially for the restrictions that they would face regarding the production of tools and technologies.
The demand for semiconductors would be affected by "prolonged freeze" in the field of manufacturing. The experts anticipated the disruptions in the supply chain brought by the health crisis.
Demand normalization would continuously hit hardware sales.
The "increasing frequency of unusually adverse climatic events" would pose obstacles to the chip-centered business. The companies would look forward to how to be profitable despite the challenges.
Beyond these risks, Aurelien Duthoit from Euler Hermes said that other factors could dictate the trend for the semiconductor industry.
In another report from Business Korea, SK Telecom will introduce low-power AI semiconductor Sapeon for the upcoming CES 2022.
Regarding semiconductor development, Chinese firm Tencent was reportedly jumping to improve chip business after it released three new computer chips last November.
This article is owned by Tech Times
Written by Joseph Henry
