"Smart Strategies, Giving Speed to your Growth Trajectory"
The global semiconductor market size was USD 425.96 billion in 2020. The regional impact of COVID-19 has been unprecedented and staggering, with semiconductors witnessing a positive demand across the regions amid the pandemic. Based on our analysis, the market exhibited a modest growth of 3.3% in 2020 as compared to the average year-on-year growth during 2017-2019. The market is projected to grow from USD 452.25 billion in 2021 to USD 803.15 billion in 2028 at a CAGR of 8.6% in the 2021-2028 period. The sudden fall in CAGR is attributable to this market’s demand and growth returning to pre-pandemic levels once the pandemic is over.
The growth of this market is attributed to the increasing consumption of consumer electronics devices across the globe. Additionally, the emergence of Artificial Intelligence (AI), the Internet of Things (IoT), and machine learning (ML) technologies is providing new opportunities for market development. These technologies aid memory chips to process large data in less amount of time. Moreover, the increasing demand for faster and advanced memory chips in industrial applications will drive the market growth over the forecast timeline.
High Uncertainty across Several Sectors amid COVID-19 Pandemic to Impede Growth
Since the onset of COVID-19 in early 2020, the industry has been facing several challenges to maintain stable growth. The entire technology industry is trying to recover from the US-China trade war and 2019’s down cycle. The International Data Corporation (IDC) estimated a revenue contraction of approximately 6% in 2020 (with 54% of probability) for the global semiconductor industry over the forecast period.
The sudden outbreak of COVID-19 in Wuhan, China, which is also known as the “motor city,” has severely impacted automotive production in Asia, as it is the home to auto plants of General Motors, Honda, Nissan, Peugeot Group (PSA), Renault, and Toyota. The United Nations Conference on Trade and Development (UNCTAD) has estimated a 2% reduction in the export of automotive parts from China to other automotive manufacturers in the European Union (EU). Similarly, the U.S., South Korea, Japan, and many more could lead to automotive export reductions worth USD 7 billion from these economies to the rest of the world.
However, the rising need to work from home has drastically surged the networking & communication, and data processing applications all over the world, which will lead to the moderate growth of the market for semiconductors in the long term.
Request a Free sample to learn more about this report.
Escalating Implementation of IoT, AI, and Wireless Communications is a Vital Trend
Advancements in AI, IoT, and wirelessly connected devices are creating a huge demand across the globe. For instance, Micron Technology, Inc. is offering high-capacity memory and multi-chip packages powered with AI training that are utilized in embedded or cloud in edge devices and mobile. A majority of these new inventions are equipped with a single system on a chip (SoC) to offer high levels of integration. Additionally, SoC also allows the devices to operate with high power efficiency and enhanced security, as it integrates processors, memory, RF transceivers, sensors, power management, and connectivity in a single unit.
Rising Utilization of Consumer Electronics Goods to Aid Semiconductor Market Growth
Rising household disposable income levels, coupled with the rapidly growing population and increasing urbanization, are creating massive demand for regular and advanced consumer electronics devices. Integrated Circuit (IC) chips are present in several electronic devices, including smartphones, washing machines, TVs, and refrigerators, for their efficient and appropriate functioning. Several leading consumer electronics brands, including Samsung, Apple, and Huawei, are making large investments in introducing new devices to cater to the increasing consumer demand for advanced devices, supporting the semiconductor industry growth.
Increasing Demand for Integrated Circuits in Developing Economies to Boost Growth
China is expected to witness strong demand for mobile chips due to the establishment of manufacturing and assembling plants of several well-known smartphone manufacturers, such as Apple and Oneplus. Moreover, Taiwan’s industry depicts significant growth, reflected through the huge number of Taiwanese personal computer manufacturers and their increasing investments in the research and development sector. The country is also renowned for manufacturing advanced technology-driven and compact integrated circuits, thus creating lucrative growth prospects for the key market.
Tariff Disruption and Shift in Global Trade to Hamper Market Growth
The industry is enormously dependent on the United States as the country has been a prominent region, holding a dominant share in the market. With changes in the country’s leadership, the U.S. has started to impose trade restrictions with China since 2018, and if the restrictions continue, the country is expected to suffer a ~16% decrease in its market share. Therefore, the increasing tension with China is expected to diminish the dominance of the U.S. semiconductor market, and the focus is anticipated to shift to Asia Pacific in the upcoming years.
Furthermore, tariffs are applied to practically all the industrial goods and materials, which are customary for the chips. These tariffs are impacting the import and export of components, which will directly affect the manufacturing cost of the chips.
Memory Devices Segment to Depict the Highest CAGR with Wider Range of Applications
Memory devices are expected to drive the overall market growth owing to the ongoing technological advancements such as virtual reality and cloud computing and their integration in end-user devices. The high average selling price for NAND flash chips and DRAM would play a major role in generating revenue.
Similarly, logic devices, which are used for special purpose application-specific signal processors (ASSP) and application-specific integrated circuits (ASIC), are projected to display the highest growth rate over the forecast period.
The microprocessors (MPU) and microcontroller (MCU) segments would depict stagnant growth owing to frail shipments and investments for notebook PCs, computers, and standard desktops. In the current market scenario, the increasing popularity of IoT-based electronics is stoking the demand for powerful processors and controllers. Hybrid MPU and MCU offer real-time embedded processing and controlling for the topmost IoT-based applications, leading to substantial market growth.
The analog IC segment is anticipated to portray progressive growth with limited demand from the networking and communication industry. Few emerging trends for the growing demand for analog integrated circuits include signal conversion, automotive-specific analog applications, and power management. There are hence enabling the rising demand for discrete power devices.
Comparatively, the sensors segment is projected to witness a moderate growth owing to the changing requirement of hybrid and mix technologies in the communication and automotive industries.
The others segment consists of digital signal processing (DSP), which is likely to show decent growth, owing to its low demand in this industry.
To know how our report can help streamline your business, Speak to Analyst
Networking & Communications Application Segment to Dominate the Market
The networking and communications segment is projected to grow at a significant CAGR with the increasing demand for smartphones and smart devices around the world. The necessity of working from home is notably rising across developed and developing economies, thus enhancing the demand across this application segment.
The data processing application segment holds a considerable market share owing to the strong need and sales of smartphones and other connected devices, accelerating the demand for memory and storage devices. Consumer electronics such as gaming consoles, wearable devices, and other electronic devices play an important role in this market, enabling the usage of electronic gaming across various countries.
The automotive application segment is estimated to witness a moderate growth rate due to the limited penetration rate of hybrid and electric vehicles. However, the market potential may get enhanced with promising advancements in autonomous driving.
The industrial application segment is estimated to grow steadily on account of the inadequate manufacturing of industrial machines.
The government application segment will display stagnant growth owing to limited government investments and projects in communications technologies.
Asia Pacific Semiconductor Market Size, 2020 (USD Billion)
To get more information on the regional analysis of this market, Request a Free sample
Asia Pacific holds the largest share and is projected to exhibit the highest growth in this market across the globe. The increasing adoption of high-end technology-based devices, coupled with the minimum electronics prices, is leading to an upswing in the consumption of consumer electronics. Additionally, technological advancements, such as IoT and LTE, are supporting the adoption of electronics products, thereby allowing the region to dominate in terms of the semiconductor market share.
China is Expected to Witness Highest CAGR with Increasing Local Semiconductor Manufacturers
China holds the largest share in the global market and is projected to witness the highest CAGR in the upcoming years, owing to the surging presence of local component manufacturers. These local market players tend towards offering a wide range of products at discounted rates in bulk quantity. It would thus augment the China semiconductor industry growth over the forecast period.
The North American market is estimated to exhibit dynamic growth driven by increasing investments in R&D activities. According to the Semiconductor Industry Association (SIA), the U.S. industry’s expenditures in R&D increased at a compound annual growth rate of about 6.6 percent from 1999 to 2019. Expenditures in R&D activities by U.S. companies tend to be consistently high, regardless of cycles in annual sales, which reflects the importance of investing in R&D production. In 2019, the R&D investments in the U.S. totaled USD 39.8 billion.
The market in Europe will witness substantial growth backed by telecom, as well as the automotive industry. Companies across the region are investing in innovating new technologies and increasing their production capacities to cater to the surging demand for advanced devices and components in the industry. Moreover, the rising consumption of consumer goods across the U.K., France, and Germany will support the growth of this industry in Europe over the forecast timeline.
Furthermore, the Latin American market will witness healthy growth owing to the increasing consumption of smartphones, TVs, and laptops across Brazil and Mexico. Consumers across the region are making investments in purchasing high-end electronic devices owing to their steadily rising disposable income levels.
To know how our report can help streamline your business, Speak to Analyst
The availability of skilled labor forces, coupled with rapid innovations in technologies, will drive the industry growth in the Middle East & Africa. The increasing demand for advanced industrial electronics and high-end computing technologies is further expected to propel the regional market growth over the forecast timeline.
Broadcom, Intel, and Qualcomm to Focus on Developing Innovative Products to Strengthen Their Offerings
Broadcom Inc. announced the availability of its 3*3 Wi-Fi 6 chip named BCM6710, specially designed for WLAN applications and set-up boxes. This is a highly optimized chip integrated with RF power amplifiers that pave the way for high bandwidth, low-latency applications, including 4K UHD video streaming, augmented reality (AR), and many more. In the current scenario, Broadcom Inc. and Intel hinge on the strategy to combine best-of-breed technology to deliver comprehensive technology-based products to major business and government customers.
Similarly, in July 2020, Qualcomm Technologies, Inc., a subsidiary of Qualcomm Incorporated, introduced ‘Qualcomm QCS410’ and ‘Qualcomm QCS610’ system-on-chips (SoCs). These chips are designed for premium camera technology, including powerful machine learning and artificial intelligence features.
An Infographic Representation of Semiconductor Market
To get information on various segments, share your queries with us
The market research report offers an in-depth analysis and further provides details on the adoption across several regions. Information on market trends, drivers, opportunities, threats, and restraints of the market can further help stakeholders gain valuable insights into the market. The report offers a detailed competitive landscape by presenting information on key players, along with their strategies, in the market.
Value (USD Billion)
Components, Application, Region
Fortune Business Insights says that the global market size was USD 425.96 billion in 2020.
The market value is projected to reach USD 803.15 billion by 2028.
The market will grow at a CAGR of 8.6% during the forecast period.
The Asia Pacific market size stood at USD 230.43 billion in 2020.
By components, the memory devices segment is expected to lead during the forecast period.
The rising consumption of consumer electronics goods and the increasing demand for integrated circuits are the key market drivers.
Broadcom, Inc., Intel Corporation, and Qualcomm are the top players in this market.
Asia Pacific is expected to hold the highest market share.
By application, the networking & communications segment is expected to lead the market during the forecast period.
The increasing implementation of IoT, AI, and wireless communications is the key market trend.
“We are happy with the professionalism of your in-house research team as well as the quality of your research reports. Looking forward to work together on similar projects”- One of the Leading Food Companies in Germany
“We appreciate the teamwork and efficiency for such an exhaustive and comprehensive report. The data offered to us was exactly what we were looking for. Thank you!”- Intuitive Surgical
“I recommend Fortune Business Insights for their honesty and flexibility. Not only that they were very responsive and dealt with all my questions very quickly but they also responded honestly and flexibly to the detailed requests from us in preparing the research report. We value them as a research company worthy of building long-term relationships.”- Major Food Company in Japan
“Well done Fortune Business Insights! The report covered all the points and was very detailed. Looking forward to work together in the future”- Ziering Medical
“It has been a delightful experience working with you guys. Thank you Fortune Business Insights for your efforts and prompt response”- Major Manufacturer of Precision Machine Parts in India
“I had a great experience working with Fortune Business Insights. The report was very accurate and as per my requirements. Very satisfied with the overall report as it has helped me to build strategies for my business”- Hewlett-Packard
“This is regarding the recent report I bought from Fortune Business insights. Remarkable job and great efforts by your research team. I would also like to thank the back end team for offering a continuous support and stitching together a report that is so comprehensive and exhaustive”- Global Management Consulting Firm
“Please pass on our sincere thanks to the whole team at Fortune Business Insights. This is a very good piece of work and will be very helpful to us going forward. We know where we will be getting business intelligence from in the future.”- UK-based Start-up in the Medical Devices Sector
“Thank you for sending the market report and data. It looks quite comprehensive and the data is exactly what I was looking for. I appreciate the timeliness and responsiveness of you and your team.”- One of the Largest Companies in the Defence Industry