Demand for ICs to stay robust in 2021, say sources

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DigiTimes

December 2, 2020

Taiwan-based IC distributors have enjoyed strong sales so far in 2020 thanks to clients’ keen inventory preparations and Huawei’s brisk short-term orders ahead of its trade ban by the US government, and the momentum is expected to continue in 2021, according to sources from the semiconductor supply chain.

IC distributors including WPG Holdings, WT Microelectronics and Edom Technology have seen robust demand for ICs from the 5G smartphones, game consoles, desktops, notebooks and tablets segments in 2020. Apple products’ strong sales have also driven up revenues of WT Microelectronics, the key IC distributor to the US-based vendor, the sources noted.

Since Wi-Fi 6 specification standards have grown mature, demand for end devices and routers featuring the technology is expected to grow gradually in the next few years. The next-generation game consoles PlayStation 5 and Xbox Series X/S will also stimulate consumer demand in 2021, the sources said.

Sales of 5G smartphones are expected to surge to over 500 million units in 2021 and will drive up demand for all IC components including application processors (AP), power amplifier (PA) chips and power management ICs (PMIC), the sources said.

Demand for automotive semiconductor components has also begun to pick up recently due to clients’ inventory replenishments. Since carmakers such as Tesla have been pushing advanced driver assistance system (ADAS) for their new cars, semiconductor components including computing chips, communication chips, display driver ICs, sensors and power ICs, have seen rising orders in 2020 with shipments expected to continue staying strong in 2021, the sources noted.

Currently, demand for standard memory ICs such as DRAM and NAND flash is only mild and their prices are likely to drop in the fourth quarter, but orders for niche-type memory ICs have begun to emerge recently, said the sources adding that demand for standard memory is likely to enjoy a more significant recovery from the server industry in the first quarter of 2021.