On supply chains, chip shortages, and Europe’s dependence – the Semicon Market in 2022. An interview with Philipp Schlüter, Sector Expert Semicon.
The semiconductor industry has made headlines in recent years. It has been about supply chains during the pandemic, chip shortages around the world and Europe’s dependency. TD Cowen has compiled the most important analyses of the market in its latest SEMICON REPORT. Philipp Schlüter, partner at TD Cowen, summarizes the key findings.
Mr. Schlüter, it gives the impression that the semiconductor market is a very special sector. What makes the market special?
Philipp Schlüter: The semiconductor market is an excellent example of a globally networked industry. We were particularly committed to provide a landscape of this market with the most important players in our current Semicon Report. The market consists of a multitude of companies, starting with the material manufacturers, chemical processing, production in the fabs or even software and chip design.
In the Report, you forecast market growth of 7 percent annually through 2030. What are the key factors driving growth in the semiconductor industry?
Schlüter: Global demand for semiconductors continues unabated and is set to increase. Industries such as the computer industry, wireless communications or the automotive sector have an enormous hunger for ever more and ever more sophisticated chips. The 5G communications standard, for example, requires special chips, as does every IoT device. We expect the market to reach $1 trillion by 2030.
In 2022, global investment in semiconductor production was 190 billion euros, and there is more than about 270 billion euros in the pipeline. These investments are necessary to increase production capacity, develop new technologies and optimize the efficiency of existing production facilities.
Does that mean bright times are ahead for semiconductor companies?
Schlüter: The semiconductor sector outperformed other indices, especially during the revival of the global economy in 2021, due to increasing demand for semiconductors in various industries and the continuous development of new technologies. However, semiconductor companies faced corrections in 2022 due to trade disputes, the macroeconomic downturn, and supply chain issues. Despite these challenges, we expect the semiconductor market to continue its growth in the future. Another interesting trend is that while the number of VC transactions in Europe decreased in 2022 compared to 2021, the volume of deals is increasing at the same time. This shows that VCs are deeply committed to driving forward the market in Europe.

You can request the full report here.
Copyright Titelbild: Yuichiro Chino