Someone had a very good 2020, and that someone is semiconductors

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Semiconductor revenue topped $449 billion in 2020, not quite hitting its 2018 high but still up 7.3% on 2019. Revenue from Chromebooks, tablets and smartphones made up for the decline in automotive and industrial, but it was memory pricing which provided the big push. A good deal of the money which might have been spent on holidays, or evenings out, seems to have been splashed on new technology. Home workers (and schoolers) justified new laptops, Chromebooks and tablets, and a new TV to better render Tiger King. Adoption of 5G pushed up smartphone revenue, even if units were falling. More computing at home pushed up demand for cloud services, further fuelling the growth and more than offsetting the decline in industrial and the collapse of automotive. Intel held its ground for another year, retaining the top spot ahead of Samsung, but AMD was the standout with revenue growth of more than 40%. That was down to the aforementioned computing devices, bolstered by games consoles which also did well during lockdown. The pandemic wasn’t the only factor in 2020’s market share – the US and China are still having a trade war which prevents the largest manufacturer of mobile phones from buying chips to use in its mobile phones. Huawei did stockpile, ahead of the September moratorium on supplies, which boosted demand in the middle of the year. Equally important are the half-dozen companies who all expect to inherit Huawei’s customers once that stockpile is exhausted. Everyone seems to think they’re perfectly placed to step in, which is going to result in fierce smartphone competition in (and around) China. Not that Chinese smartphones are a high-margin product. Huawei’s inability to sell smartphones outside China (thanks to the lack of Google Android Services) led to an oversupply of 4G handsets, pushing Huawei’s competitors to differentiate with 5G. Chinese 5G handsets can be had for $150, rapidly making earlier generations redundant even if 5G network coverage remains far from ubiquitous. Overall smartphone shipments were down in 2020, particularly the first half, but are already bouncing back. Memory also had a good year, specifically NAND flash, but then memory exists in a world of its own – booming and busting based on the degree with which demand balances supply. However, even if we take memory out of the picture semiconductor revenue was still up by 5.6%, showing that even in the face of a global pandemic, international trade wars, uncontrollable wildfires and political instability people will still spend money to shift bits around a little faster. However, 2020 is now history and attention is now focused on who will be the winners in 2021. Memory is expected to do even better than 2020 with the DRAM market booming. The last memory boom (in 2018) pushed Samsung into the #1 position, so Intel shouldn't get too comfortable in the top spot. If you’re a Gartner customer then there are lots more details in our Market Share Analysis: Semiconductors, Worldwide, Preliminary 2020, or set up a call with one of our analysts to discuss how 2020 went, and what to expect in 2021.

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