Penn: Global semiconductor market to grow 12% in 2021

He was presenting at the Future Horizons IFS Mid-Term Semiconductor Update webinar

His optimistic forecast builds on a projected 4% rise to $429bn in 2020.

This advance bucks a long historic trend. “Global GDP is forecast to be minus 4.8% in 2020 and usually economic downturns take the semiconductor market with it,” says Penn. “This time, the semiconductor industry didn’t blink. Momentum slowed, but it resembles a traffic accident where everything stops and then recovers when the wreckage has been cleared.”

Penn predicts Q3 will see the market climb 8% followed by a 2.5% decline in Q4.

“If Q4 is robust we will be OK, if it is weaker, that could impact Q1 next year.

Penn is looking at a modest 0.5% decline for Q1 2021, followed by two quarters of strong growth – 5% in Q2 and 10% in Q3.

Penn’s bearish prediction for 2021 would still see the global semiconductor market grow 6%.

His forecast is buoyed by a sharp 8% rise in wafer substrates in the second quarter of this year.

“That has pushed on into Q3,” says Penn, “and manufacturers only buy substrates to make ICs.”

There are lurking dangers to this optimistic scenario.

“An escalation of the trade war between the US and China could take $30bn out of the market. A second wave of COVID-19 needing rigorous lockdowns could take $24bn out of the market,” warns Penn.

If this double whammy hit, it will have a severe impact on revenue potential and transform 12% growth into a 12% decline.

“We will either go through the roof or go bust,” remarks Penn.

Listing his key 2020/21 takeaways, Penn reckons that there is no shortage of opportunities and COVID-19 could accelerate many of them.

“Increasing datafication is good news for servers, storage and communications suppliers, and there will be a massive acceleration of personal health and medical products, which will dwarf everything,” says Penn.