Strong Memory Demand Fuels Global Chip Revenues

Article By : George Leopold

Global chip revenues have jumped more than 17 percent since mid-2021 as demand continues to outpace supply.

The global semiconductor industry topped $150 billion in revenue during the third quarter, fueled by strong memory sales that rose 13.8 percent over the previous quarter,

“Preliminary data shows the NAND market reached nearly $18.7 billion in 3Q21,” said Craig Stice, Omdia’s chief semiconductor analyst. “The NAND market was fueled by strong shipment growth to meet demand coming out of the enterprise and data center markets, as well as stable demand out of the smartphone market.”

Average selling prices during the third quarter rose nearly 5 percent on a quarterly basis “as supply and demand remained slightly out of balance,” Stice added. The supply-demand imbalance helped fuel price increases as pandemic-driven chip shortages drag on. That, along with seasonality and the strong memory revenue propelled quarterly chip revenues to $153.2 billion.

Source: Omdia (Click on image to enlarge.)

Memory devices, including DRAM, NAND and NOR, accounted for fully 29 percent of global semiconductor revenues between July and September, Omdia reported.

Also advancing were the display driver and image sensors sectors. Display revenues jumped 13 percent on a quarterly basis while image sensors rose 12 percent over the previous three months.

The primary beneficiary of the memory surge was Samsung Electronics. The South Korean memory giant overtook Intel Corp. to again become the world’s largest semiconductor manufacturer. Samsung is the world’s leading supplier of DRAM and NAND devices. Intel’s microprocessor revenue was nearly flat during the third quarter, up only 0.5 percent, Omdia reported.

Memory specialists SK Hynix and Micron Technology also benefitted from strong third quarter demand, as did Qualcomm and Nvidia.

Meanwhile, the industry group SEMI reported the semiconductor equipment sector recorded its fifth consecutive quarterly record for billings, increasing 38 percent on an annual basis to $26.8 billion in the third quarter. That’s an 8-percent increase over the previous quarter, SEMI said.

“Strong secular demand for chips across a wide range of markets, including communications, computing, healthcare, online services and automotive has fueled this tremendous run of record quarterly growth for semiconductor equipment,” said Ajit Manocha, SEMI’s president and CEO.

North American chipmakers seeking to ramp domestic production led the way, registering a 67-percent quarterly jump in IC equipment orders. Taiwan and Europe were similarly strong. However, U.S. export restrictions continue to hamstring orders by Chinese chipmakers.

This article was originally published on EE Times.

George Leopold has written about science and technology from Washington, D.C., since 1986. Besides EE Times, Leopold’s work has appeared in The New York Times, New Scientist, and other publications. He resides in Reston, Va.

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