The global semiconductor industry will return to growth this year despite disruptions from the Covid-19 pandemic, a new forecast shows. Memory-chip companies are on pace to post the biggest gains in 2020.
XWorld Semiconductor Trade Statistics on Tuesday forecast chip sales rising 5.1% to $433 billion in 2020. That's after semiconductor industry sales fell 12% to $412 billion in 2019. For 2021, the group sees chip sales accelerating to 8.4% growth, reaching $469 billion.
Prospects for the semiconductor industry have improved since midyear. In June, WSTS forecast total chip sales to increase 3.3% in 2020 and 6.2% in 2021. World Semiconductor Trade Statistics is a nonprofit organization of semiconductor product companies. It is the industry's only source for monthly semiconductor shipment statistics.
The semiconductor industry is climbing out of a cyclical downturn that started in late 2018. WSTS expects growth in all categories of semiconductors this year, except the small segments of optoelectronics and discrete semiconductors.
Memory Chips Driving Semiconductor Industry Growth
Memory chips were the hardest-hit segment and have been among the last to recover. Now, memory-chip sales are seen rising 12.2% to $119 billion, outpacing all other groups. The next fastest-growing segments are sensors at 7.4% growth and logic chips at 6.5% growth.
WSTS sees memory chips being the fastest-growing category in 2021 as well. It forecasts 13.3% growth next year for the category.
Micron Stock Surges On Guidance Update
On Tuesday, memory-chip maker Micron Technology (MU) raised its current-quarter outlook. Micron stock jumped on the news.
On the stock market today, Micron stock rose 4.7% to 67.08. Earlier in the session, it hit a 20-year high of 68.62.
The Boise, Idaho-based company now expects to earn an adjusted 71 cents a share on sales of $5.73 billion in its fiscal first quarter, which ends Dec. 3. That's based on the midpoint of its outlook. Its prior guidance was for adjusted earnings of 47 cents a share on sales of $5.2 billion. In the year-earlier period, Micron earnings were 48 cents a share on sales of $5.14 billion.
Qualcomm Rises On New Smartphone Chip
Among semiconductor industry groups, fabless chipmakers are the top performers on the stock market. IBD's Electronics-Semiconductor Fabless group ranks No. 20 out of 197 industry groups that IBD tracks.
Fabless chipmaker Qualcomm (QCOM) saw its stock pop Tuesday after it announced a new smartphone chip. Qualcomm's Snapdragon 888 mobile platform is designed for premium 5G smartphones.
On Tuesday, Qualcomm stock rose 2.8% to 151.26. Qualcomm was the IBD Stock Of The Day on Monday.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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