Making the Impossible Possible: Building a Better Future After a Year of Surprising Growth and Rising Demand

The new year is always a wonderful time to take a deep breath, hold it and reflect on the past 12 months while planning for the year ahead. In the semiconductor industry, we have never seen a year like 2021, one with so many surprises combined with so much growth.

In 2021 we saw semiconductor manufacturing expansions accelerate across the value chain. Advanced logic was especially pronounced, with leaders seeing the opportunity to serve the growing market for high-performance compute or hyperscalers to power artificial intelligence (AI) engines in a wide range of applications. But 2021 will be remembered for broad demand growth, with 5G adoption in mobile handsets and base stations continuing to double each year. This drove a strong surge in the introduction rate of next-generation mobile handsets, which ushered in higher demand for camera chips, power, and memory.

In addition, the industry managed through national concerns about semiconductor technology challenges from the ongoing pandemic, and, as a result of the sharp increase in demand, a worldwide supply chain shortage of chips compounded by logistics challenges around the globe.

Against this backdrop, companies like Onto Innovation will see a growth of 40% year over year, and demand is continuing to rise in 2022. All the drivers are the same for the new year as in 2021, but we also see an increased focus on compound semiconductor devices, particularly for power devices supporting the global emphasis on transitioning from the 130-year-old combustion engine to electric vehicles (EVs) and the world’s critical need for smarter power grids that allow more renewable energy sources to come online. Along with that, we project higher levels of investment in heterogeneous packaging technology for 2022 to support the next generation of AI engines and high-performance integrated modules, such as those for 5G communication.