December Global Semiconductor Industry Updates

For the latest news on semiconductor industry expectations in 2022 and improvement for the automotive industry, check out our December updates.

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December Industry Update

As the year comes to a close, the semiconductor industry is looking forward to what’s ahead. Though no one knew what to expect this time of year, there’s no doubt that the impact of the pandemic will join us for 2022. However, despite the many setbacks faced, there are more and more bright spots up ahead. To learn about the expected growth, improving inventory and more, read our December Monthly Industry Update.

Global Semiconductor Industry Shortages Continue Into 2022

Many industries, from automotive to medical, have faced lower production. This resulted from the start of the pandemic and increased demand of products. As much as everyone wants a clean slate at the start of a new year, there’s no question that the global semiconductor shortages will continue well into 2022. While this is not an ideal situation, there are a few bright spots ahead for 2022 as well. According to Gokul Hariharan from JPMorgan, many expect more supplies to become available. Experts project this to take place mid-year. Though shortages will continue to persist for certain industries and parts, many welcome the improvement after months of negative news.

Automotive Semiconductor Inventory Improves

The automotive industry took a heavy blow due to the unprecedented increased demand and supply chain issues at the start of the pandemic. Since then, production was cut, some automotive retail moved online, and other parts of the industry were changed forever. Thankfully, some aspects seem to be recovering. Five major automotive semiconductor vendors were inventoried. The results revealed an increase in inventory, suggesting the first gain in 2021. This points to potential improvement coming for the automotive industry and some possible relief from the hard hits of the pandemic.

Semiconductor Companies Hit Record High Sales for 2021

Though shortages are abundant, this hasn’t prevented an increase as global semiconductor sales hit a record high for 2021. The Semiconductor Industry Association announced that sales increased 24.0% from October 2020 to 2021. This was an increase from $39.4 billion in sales to $48.8 billion. Despite shortages, semiconductors have been in more demand than ever, and new investments are being made in the industry. All major regional markets saw year-to-year and month-to-month sales growth. For year-to-year growth this broke down to 29.2% for the Americas, 27.3% for Europe, 23.7% for Japan, 22.6 for Asia Pacific/All Other, and 21.2% for China. At this point, sales are predicted to increase another 9% in 2022, and demand is expected to stay high next year as well.

It’s an understatement to say that the semiconductor industry has dealt with many twists and turns. Despite unparalleled shortages on top of record demand, it seems relief is in the future. While 2022 won’t bring an end to the shortages, it will provide an opportunity for industries to apply the lessons they’ve learned and gives way for new innovation. With record sales, improvement for the automotive industry, and new investments, there is plenty to celebrate and look forward to. While the months after the start of the pandemic have been anything but easy, we are proud of the continued dedication and perseverance of our team. They ensure we are ready to navigate any situation and continue to deliver exceptional outcomes to our business partners. For more information on how Velocity can help you as you step into the new year, submit an RFQ today!

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