ELECTRONICS

Resilient demand in final markets, higher prices and a more favourable product mix allowed the electronic component industry to remain in green territory in 2020 and buck the wider economic gloom. However, the +2.5% recovery in global sales in 2020 was not enough to compensate for the -9% slide of 2019 when overcapacities and disappointing demand led to a crash in prices in some of the largest product markets (memory semiconductors, in particular).

The positive momentum is expected to gather steam in 2021 on the back of an improving economic environment, the ramping up of new technologies (5nm semiconductors, 5G telecommunications equipment) and substantial investment in corporate IT infrastructure (cloud computing, in particular). Global sales should grow by about 5%, with semiconductors overperforming the wider component market.

2021 will also see China come up with a new plan to boost its domestic semiconductor capabilities, six years after the introduction of the Made in China 2025 plan that translated into substantial support to going to domestic and foreign companies operating in the country. While China is very unlikely to see a major domestic champion on par with international players in terms of size or technological advancement in the next decade, new support measures could further boost China's nascent seconductor industry and help the company reduce its USD200bn trade deficit in chips.