Strong Demand For Semiconductors Set to Continue in 2021
2020 introduced unprecedented operational and logistics disruption into the electronic components manufacturing sector. However, as many consumers moved their work and social lives online it led to a huge demand for computing hardware. This increased demand does not show signs of slowing, with analysts predicting that the global semiconductor market will see 12% growth in 2021. Even as strong demand looks set to continue, there are several factors that may affect component sourcing, availability and costs in 2021.
Automotive manufacturing declined in 2020 but many manufacturers have now increased production to respond to inventory shortages and recovering consumer demand. Both traditional and electric vehicles rely on complex electronic systems that require advanced semiconductors. As a result many automakers have increased their orders for automotive electronic components. This combined with supply chain disruption and competition from other sectors may result in reduced availability and rising prices. Demand for electronic components is also expected to increase as 5G technology becomes more accessible in 2021 leading to greater demand for new mobile devices. Electronic component makers will need to expand their 5G semiconductor portfolios in order to meet this new demand.
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