You get answers arguing combinatorial circuits because with a 2-bit multiplier there is one addition at most:
No use for Repeated Addition.
And you still don't state explicitly you want a (non-trivial, more than one state) state machine.
With factors a₁a₀ and b₁b₀, result bit p₀ is almost trivial (odd if both factors are):
p₀: a₀∧b₀ , p₃ hardly more complex (at least 8 if both factors are 3):
p₃: a₁∧b₁∧p₀
"The four-bit" p₂ is set when each factor is at least 10₂ but not both are odd:
p₂: a₁∧b₁∧¬p₀
The product is two, three, or six if one factor is at least 10₂ and the other one is odd but not both are 11₂:
p₁: ((a₁∧b₀)∨(a₀∧b₁))∧¬p₃
(a₁∧b₀∧¬p₃)∨(a₀∧b₁∧¬p₃)
Another approach is to create circuits for each segment directly, e.g. using Karnaugh-maps, capital letters denoting inverted (input) variables, 1⁺/0⁺ variants possible (en.wikipedia states 6&9 "with tail" most common, resulting in segment a identical to d below):
a b c d e f g
⁰⁰₀₁¹¹₁₀ ⁰⁰₀₁¹¹₁₀ ⁰⁰₀₁¹¹₁₀ ⁰⁰₀₁¹¹₁₀ ⁰⁰₀₁¹¹₁₀ ⁰⁰₀₁¹¹₁₀ ⁰⁰₀₁¹¹₁₀
00 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 0 0 0 0
01 1 0 1 1 1 1 1 1 1 1 1 0 1 0 1 1 1 0 0 1 1 0 0 0 0 0 1 1
11 1 1 1 0⁺ 1 1 1 0 1 1 1 1 1 1 1⁺1 1 0 0 1 1 0 1 1 0 1 1 1
10 1 1 0⁺0 1 1 0 1 1 0 1 1 1 1 1 0 1 1 1 0 1 0 1 1 0 1 1 1
A₁A₀+B₁B₀ A₀+B₀ A₁A₀+B₁B₀ A₁A₀+B₁B₀ A₁A₀+B₁B₀ A₁A₀+B₁B₀ a₀b₁+a₁b₀
+A₁b₁+a₁B₁ +a₀b₀ +a₀b₀+a₁b₁ +a₁b₀ +a₀B₀+A₀b₀ +a₁b₁ +a₁b₁
+a₁a₀b₁b₀ +A₀B₀ +a₀b₁
(juxtaposition instead of ∧, + instead of ∨ for brevity)
Switches
can hold input state. Please state explicitly whether you try to implement a state machine or a purely combinatorial circuit. \$\endgroup\$