Looking Forward to 2022: Wrapping Up 2021’s Semiconductor Industry Trends
With 2021 wrapped up, let's look back at the trends we saw happening in the semiconductor industry and then look at how 2022 is kicking off.
As we're all aware, 2021 was a turbulent year for the semiconductor industry. However, despite a global pandemic, shipment delays, trade problems, and natural disasters, the industry continued to see growth. Now that 2022 is in full swing, what can be expected in this industry moving forward?
This article will look at some events from 2021 that the semiconductor industry experienced, how some companies are kicking 2022 off, and where this new year could take us.
What Were the Major Semiconductor Trends in 2021?
According to Gartner, the semiconductor industry grew by 25.1% in 2021.
Growth of semiconductor industry and types of components. Image used courtesy of Semi
Overall, the semiconductor industry experienced a plethora of trends and events in 2021. From chip shortages to new fabrication facilities, these trends have helped push us into the new year.
Let's take a look at a few noteworthy events.
Ongoing Chips Shortages
The global semiconductor chip shortage, which started in 2020, plagued industries throughout 2021.
While capacity will always have its ups and downs, the severity of the shortage had a considerable impact. With most manufacturing being carried out within the Asia Pacific region alone, the ongoing pandemic led to bottlenecks.
On top of all this, growth in counterfeit chips risked infiltrating supply chains with reliability issues.
Labor Shortages Due to Skills Gap
It wasn't just the chip shortage in 2021 that slowed down semiconductor production; a continued labor shortage had a severe impact too.
The shortage of qualified semiconductor engineers compounded the supply chain issues caused by the global pandemic. Countries worldwide struggled to recruit talented engineers quickly enough to meet demand.
Growth in Fabrication Facilities
With logistics being disrupted globally during 2021, many companies decided to invest in new facilities closer to home.
Overall, there was particular growth in the states of Arizona and Texas.
An employee inside one of Intel’s fabrication facilities in Arizona. Image used courtesy of Intel
Meanwhile, both Samsung and Tesla showed an interest in establishing fabs in Texas.
While Arizona benefits from the existing industry generated by Intel, both states offer a lower cost of living, fewer regulatory hoops, large talent pools, good infrastructure, and a vast landmass ready for development.
Drive for Labs Over Fabs
It wasn't only production being impacted during 2021, but also design.
What became increasingly apparent was the need to create the next-generation semiconductors required for sustainable economic and technological developments.
A shift from supporting fabrication facilities to research laboratories was put forward in 2021 to help governments build a competitive edge and help solve the chip shortage crisis.
How are the Big Players Kicking of 2022?
Now, diving into 2022, the first company hoping to make waves in the semiconductor industry is Intel.
Intel has kicked off 2022 by announcing plans to invest over $20 billion in constructing two new leading-edge chip factories in Ohio. The investment aims to help boost production and power the next generation of innovative products.
A rendering of Intel's Ohio fab. Image used courtesy of Intel
It has also pledged an additional $100 million over the next decade towards partnerships with educational institutions to nurture upcoming talent and promote research programs.
Another thing Intel is working towards is the latest phase of its longstanding collaboration with ASML to advance the cutting edge of semiconductor lithography technology. Intel has purchased its first order of ASML's TWINSCAN EXE:5200 system, an extreme ultraviolet high-volume production system.
Meanwhile, Taiwan's two top chipmakers plan to hire more than 10,000 engineers this year.
The world's largest contract chipmaker, TSMC, is amidst its largest-ever expansion. It plans to spend $44 billion this year to expand production capacity, alleviate the chip shortage and meet demand.
Meanwhile, the world's top mobile chip developer by shipments, MediaTek, said it would take on more than 2,000 people this year.
Each of these developments could help increase chip supply to a range of industries, from smartphones and PCs to automobiles and military equipment.
How Could New Initiatives Impact Electrical Engineers?
Intel's manufacturing investments aim to build more supply chain resilience and ensure reliable access to advanced semiconductors. This investment and the development of other new fabrication facilities could attract ecosystem partners and generate opportunities for electrical engineers.
However, while planning for Intel's new chip factory will start immediately, construction is only expected to begin in late 2022.
Meanwhile, investments in cutting-edge research could significantly impact electrical engineers, allowing them to develop next-generation technologies.
What's more, the shift could do a lot for the skills shortage, encouraging technical talent back to the industry. Market research has shown emerging applications associated with AI chips, automotive electronics, and wide bandgap semiconductors.
What Does the Semiconductor Industry Look Like for 2022?
While major chipmakers like TSMC, Intel, Bosch, and others announced plans to increase their chip production capacity in 2021, the reality may be a long time coming.
The result is that supply chain disruptions could remain high during 2022, especially with new pandemic-related outbreaks and ongoing situations.
All in all, 2022 could well be another turbulent year, but with more organizations finding solutions, the problem might be smaller than in 2021. Whatever 2022 holds, it seems the industry's long-term future is secure as chips continue to be key to almost every piece of technology in use.