The Chip Shortage Forecast to Significantly Constrain SIM Cards Market through 2022

New York: As a byproduct of COVID, the chip shortage impact made itself known in 2021. A continuation and worsening of the situation will continue throughout 2022, considered by most industry experts as the critical chip shortage year. For the SIM cards market, this impact is forecast to be significant on the removable SIM card form-factor. According to global technology intelligence firm ABI Research, removeable SIM card shipments will decline from 4.36 billion in 2021 to 3.93 billion in 2022.

‘Despite the prediction of significant market pain in 2022, the chip shortage should be considered a shorter-term market challenge, likely to improve in 2023 as further chip manufacturing capacity comes online and the market briefly bounces back. However, despite the foreseen market bounce back, ABI Research does not forecast a return to pre-COVID SIM card shipment levels for the removable form factor due to other market challenges, including a continued reduction in SIM card replacement rates and the forthcoming eSIM growth,” explains Phil Sealy, Telco Cybersecurity Research Director at ABI Research.

The greater long term threats for the removable SIM form factor are presenting themselves within the handset market, which is already extremely saturated, limiting growth opportunities. According to Sealy, “In addition, smartphone average selling prices are at significantly higher levels than a few years ago, subsequently negatively affecting removable SIM card churn rates as device contracts are lengthened to spread the cost of higher priced smartphones over a longer period of time.”

This trend was well in place prior to the COVID pandemic and chip shortage crisis. On top of this is the looming eSIM impact. Despite significant levels of eSIM devices being available within the market today, the use of dual SIM devices, combining eSIM with a traditional removeable SIM functionality, has limited the impact on the removeable market so far.

“Overall, ABI Research believes that the market for removeable SIMs will only marginally be touched by the eSIM over the next two years, due to a continuation of dual SIM device issuance (encompassing a removeable SIM slot and eSIM). However, with strong rumors circulating around the launch of an eSIM only Apple device, a higher level of impact should be expected from 2023/2024 onwards.

These findings are from ABI Research’s SIM Cards market data report. This report is part of the company’s Telco Cybersecurity research service, which includes research, data, and ABI Insights. Market Data spreadsheets are composed of deep data, market share analysis, and highly segmented, service-specific forecasts to provide detailed insight where opportunities lie.