Semiconductor revenues surged in 2020 despite shortages

Intel was still the industry’s best performer, although Nvidia was the fastest-growing company with revenues up 45%

Worldwide semiconductor revenues surged by 10.4% between 2019 and 2020 despite a widely reported global components shortage.

Companies accrued $466.2 billion in revenue throughout the last calendar year, according to Gartner, with Intel retaining its market superiority despite a difficult year in which it lost its position as the most valuable US chipmaker to rival Nvidia.

Intel earned $72.8 billion last year, which represented a 15.6% market share, followed by Samsung Electronics, which accrued $57.7 billion at a market share of 12.4%. SK Hynix ranked third with a 5.5% market share and $25.9 billion in revenue during 2020.

Despite Intel’s dominance, however, its growth of 7.4% between 2019 and 2020 was slower than a host of its direct competitors. Samsung's revenues grew 10.2%, for example, while SK Hynix grew its revenues by 16%.

The fastest-growing company in this segment was Nvidia, which expanded its revenues by 45.2% from $7.3 billion to $10.6 billion, growing from 16th place to ninth in Gartner’s index. MediaTek, similarly, moved up from 13th to eighth place, with its revenues growing 38.1%. Nividia’s growth can be attributed to its gaming-related and data centre businesses, while MediaTek’s positive 2020 was down to the disruption to Huawei’s business. 

Nvidia has only just launched its first data centre CPU, too, further suggesting it hopes to build on its momentum in 2020 to really take aim at Intel this year.

“Memory, GPUs and 5G chipsets led semiconductor growth, driven by hyperscale, PC, ultramobile and 5G handset end-market demand, while automotive and industrial electronics suffered due to lower spending or a pause in spending owing to COVID-19,” said Andrew Norwood, research vice president at Gartner.

“Memory benefited from the key trend in 2020 — the shift to home working and learning — which fueled increased server build from hyperscale vendors to satisfy online working and entertainment, as well as a surge in PCs and ultramobiles.”

Norwood added that within memory, NAND flash sustained the best performance with revenue growth of 25.2% due to a shortage during the first half of 2020.

A shortage will re-emerge in the first half of 2021, he continued, which would send prices higher through the year and cause revenues to rocket by roughly 25%. This would set Samsung up with a good chance of recapturing the top spot in the semiconductor market from Intel in 2021.

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The effect of the shortages on raising the memory prices would also seem to explain why semiconductor revenues overall have climbed despite the supply of essential components shrinking. 

The widely reported shortage has gotten so severe that the newly appointed US president Joe Biden has pledged to work with businesses to identify and mitigate bottlenecks in the supply chain.

Companies like Nvidia have attempted to address the shortage, meanwhile, by repurposing older components, with the firm drawing on previously released GTX 1050 Ti and RTX 2060 GPUs to meet the demand for supply of much newer chips, which are harder to come by.

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