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# 2020 Chip Market Year in Review: DRAM Comes Out on Top

December 10, 2020 by Luke James

## According to IC Insights, DRAM was the biggest IC product category for 2020 with sales of $65.2 billion, followed by NAND coming in second at$55.2 billion.

As the world continues to manage the COVID-19 pandemic, global chip markets are still fluctuating wildly, as we reported earlier this year. Now, according to a recent press release by IC Insights, the chip market has seen a strong rebound in certain IC product segments with double-digit growth estimated for 2021.

IC Insights, which is currently in the process of updating its forecasts and analyses of the IC Industry for the January 2021 McClean Report, points to DRAM as the dominating IC product category. Indeed, the top five product categories in terms of sales revenue are all related to computing and/or communications applications.

### Strong DRAM and NAND Performance

DRAM has been the largest IC segment year-over-year since 2017, and IC Insights forecasts that it’ll retain its position in first place next year, too.

NAND, which came in second place, is being driven by demand for solid-state computing, which requires high-density, high-performance NAND flash. As momentum increases for 5G connectivity, emerging technologies like artificial intelligence (AI), cloud computing, and automotive technologies, even stronger growth will be seen in both NAND and DRAM IC market segments.

##### Leading IC products in 2020. Image used courtesy of IC Insights

And while NAND came first in terms of overall sales this year, NAND flash has seen the highest revenue growth of 25 percent. IC Insights notes that NAND flash sales were “exceptionally strong” in Q1 2020 as strong demand from makers of data center servers led to a sharp rise in the average selling price. While prices for NAND flash continued to rise throughout the year, its pace slowed down gradually.

In third place is computer CPUs, helped by the COVID-19 pandemic which necessitated major upgrades in computing systems worldwide as businesses transitioned from office to home.

### One of the Most Resilient Markets

The IC industry has been one of the most resilient markets during the COVID-19 pandemic, as it has been during previous economic downturns like the 2008 Global Financial Crisis when semiconductor stocks showed a huge recovery.

While initial estimates projected that semiconductor revenues could fall by as much as \$55 billion, with smartphone, automotive, and PC & tablet end-use applications thought to be the most vulnerable, quite the opposite is true: the industry has thrived on the whole.

##### Projection of how market segments may recover by 2021. Image used courtesy of McKinsey & Company

Although the pandemic has wreaked havoc on many economic sectors, it’s simultaneously accelerated the global digital transformation, with 21 of 33 IC product market segments not only surviving but experiencing positive growth. Looking forward to next year, IC Insights believes that the IC industry will experience double-digit growth on the back of vaccine development and a strong global GDP rebound.

Featured image used courtesy of McKinsey & Company