• By The Financial District

Annual Global Chip Sales Surpass $500B For The First Time

Annual global semiconductor sales topped $500 billion for the first time in 2021, as chipmakers ramped up production to cope with the global supply crunch exacerbated by rapid economic recovery from the pandemic, an industry body told Kyodo News.


Photo Insert: Chip demand is expected to continue to grow for use in autos, computer game consoles, and network and mobile equipment, among other consumer and industrial products.



Sales totaled a record $555.9 billion last year, up 26.2 percent from $440.4 billion in 2020, as the industry shipped an all-time high of 1.15 trillion units, the Semiconductor Industry Association (SIA) said in a recent report.


Chip demand is expected to continue to grow for use in autos, computer game consoles, and network and mobile equipment, among other consumer and industrial products.



"In 2021, amid the ongoing global chip shortage, semiconductor companies substantially ramped up production to unprecedented levels to address persistently high demand, resulting in record chip sales and units shipped," John Neuffer, SIA president and CEO, said in the report.


"Demand for semiconductor production is projected to rise significantly in the years ahead, as chips become even more heavily embedded in the essential technologies of now and the future."


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By region, sales in China, the world's biggest chip market, surged 27.1 percent and those of the Americas market posted the sharpest rise with 27.4 percent growth. Europe and Japan saw a 27.3 percent and 19.8 percent rise, respectively, while Asia-Pacific and other markets logged a 25.9 percent jump. Solid appetite is expected to leave little chance for the chip shortfall to be resolved anytime soon.


Toyota Motor Corp. recently cut its global production plan for the year through March 2022 to 8.5 million vehicles from 9 million, citing uncertainty from the coronavirus spread and chip shortage.


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Herbert Diess, top executive of Volkswagen AG, said Wednesday that the German automaker expects a continued hit from the chip shortage this year, although the carmaker should be able to ramp up production in the second half of the year, Reuters news agency reported.


Pat Gelsinger, chief executive of Intel Corp., said late last year that the semiconductor shortage will last until 2023. The US chip giant plans to spend 30 billion ringgit ($7.2 billion) in Malaysia over a decade to boost its production capacity.



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