The semiconductor industry has always evidenced immense growth since its evolution and showed great resilience even during the economic recession of 2007-09. Semiconductors have their role felt in almost every industry, be it telecommunications, IT, health sector, computing, automobile, energy, space, and so on. While it is edging towards its peak, the COVID-19 pandemic brought down the overall game for the semiconductor industry to negative, like any other industry faced a total drop down in their revenues. Gartner research reveals that 2020 Semiconductor Revenue Downgraded by $55 Billion Due to COVID-19 Impact. Accenture, in its research, indicates Impact on semiconductor revenue projections for 2020 by end-use application:
The key factors influencing the drop-down of the semiconductor industry are slashed requirements, financial deficits, rigorous employee welfare conditions, and dynamic consumer behavior. Even though importing semiconductor chips has slumped exponentially, the need for future development gives a very high hope for the semiconductor industry.
The setback industry is in unbelievable volumes; nevertheless, the industry took the knock, but then this will be a takeaway, and the industry is expected to plunge back strongly. The semiconductor industry is in work persistently to ramp up fabrication to meet up restored needs. This is clearly visible from the announcement by SIA, which stated that global sales of semiconductors reached $39.4 billion in November 2020. In overall 2020 the semiconductor Sales increased by 6.5% to reach $439 billion in 2020. Confirming this, the CEO of SIA John Neuffer stated that “Global semiconductor sales increased moderately on an annual basis in 2020, weathering a challenging macroeconomic environment brought on by the pandemic and other factors.” This statement lends a big hope for the semiconductor manufacturers, as the demand for chips is on the upswing.
The persistent soaring wide-ranging requirement for semiconductors and their ever-escalating prominence all through the economy caught the notice of policy planning experts. President Biden’s executive order on critical supply chains, including semiconductors, passed the CHIPS for America Act as a part of the FY2021 National Defence Authorization Act (NDAA). This avails the domestic chip manufacturing industry with federal incentives to strengthen the industry and bring in robust supply chains to stay buoyant to the upcoming misfortunes.
To serve the augmented requirement for the existing worldwide chip unavailability period, the industry is significantly escalating its fabrication capacity. Even though the signs indicate a considerable rise in chip manufacturing capacities, the growth is for sure is not radical, and it is going to be a persistent rising curve. This is mainly because the fabrication process is time-consuming and has many innate processes and procedures right from planning to delivery.
Despite all these challenges, the pandemic situation has offered an enormous number of challenges that the industry has never thought of, created the do-or-die situation to think out-of-box in its operational ways, and incorporated new learning into the industry, giving more scope for innovations. More specifically, the industry has been working hard to identify the setbacks and operational challenges and are deriving innovative ways to handle the areas like demand management, supply chain management, value chain models, logistics sectors, and customer satisfaction smartly.