Semiconductor Market Size, Share & Industry Analysis, By Component (Memory Devices, Logic Devices, Analog IC, MPU, Discrete Power Devices, MCU, Sensors), By Application (Networking & Communications (Ethernet Controllers, Adapters & Switches, Routers), Data Centers, Industrial (Power Controls and Motor Drives, Intelligent Systems), Consumer Electronics (Home Appliances, Personal Devices), Automotive (Telematics & Infotainment, Safety Electronics, Chassis, Powertrain), & Government) & Regional Forecast, 2024-2032

The global semiconductor market size was valued at USD 611.35 billion in 2023 and is projected to grow from USD 681.05 billion in 2024 to USD 2062.59 billion by 2032, exhibiting a CAGR of 14.9% during the forecast period (2024-2032). The Asia Pacific semiconductor industry held a market share of 50.53% in 2023. Additionally, the U.S. semiconductor market is expected to significantly, reaching an estimated value of USD 258.30 billion in 2032, driven by growing product use in consumer electronics and Integrated Circuits Integration.

Semiconductors are essential electronic circuits or units made of materials such as silicon, germanium, silicon carbide and others. These electronic parts are integral to electronic devices and systems composed of components such as memory devices, logic devices, analog integrated circuits, memory protection units, microcontroller units, discrete power devices, and others. The global semiconductor industry is potentially growing with rising electronics use and integration across applications such as networking communication devices, data processing, industrial automation systems, consumer electronics, automotive, and government projects.

The growing global consumer electronics consumption further supports the market growth. In addition, the development of artificial intelligence (AI), the Internet of Things (IoT), and machine learning (ML) technologies in the new age of electronic systems is generating lucrative market growth opportunities. These technologies assist and enhance memory chip processing time to process large amounts of data in no time. Moreover, the potentially rising demand for faster and more advanced memory chips in data center applications is expected to drive the market growth over the forecast timeline.

In 2020, the COVID-19 pandemic shocked the semiconductor industry with its sudden emergence and caused several challenges that hampered stable industry growth.

The United Nations Conference on Trade and Development (UNCTAD) assessment shows a 2% decline in automotive parts export from China to other manufacturers in the EU nations in 2020.

However, the pandemic significantly altered the current market fundamentals of economy that includes corporate operations, business revenues, and consumer behavior. In addition, developing nations recovering positively and actively from the pandemic improved the global supply chain in the post pandemic era. Moreover, the increased demand for semiconductor products across various segments, such as automotive and wired communication, has helped to recover from the decreased revenue and sales.

Semiconductor Industry Trends

Growing Demand for IoT, AI Integration and Wireless Communicating Products to Propel the Market Growth

AI integration has been a new technological trend, enabling adoption of the silicon chipsets in automotive industry. Additionally, big data, data analytics, facial recognition, and machine learning are the new data infrastructure helping semiconductor manufacturers develop advance components and machineries. AI, IoT, and wireless devices are getting extensive responses and are creating huge global demand for advancements across the telecom industry. The new products are equipped with technology chips, such as a single system on a chip (SoC) that offers flexible integrations. Moreover, IoT-enabled chipsets such as IoT SoC are the newly designed chipsets that support WLAN, Bluetooth, and other systems. These SoCs amplify the radio frequencies of wireless communication devices from a short range of 2.4 GHz to 5 GHz and are expected to expand the semiconductor market share during the forecast period.

• For instance, In January 2023, the U.S. chip design firm Ceremorphic Inc. developed an advanced 5 nm silicon-made chipset that offers advanced security besides its energy efficiency and performance-driven capabilities.

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Semiconductor Industry Market Driving Factors 

Growing Product Use in Consumer Electronics and Integrated Circuits Integration to Drive the Market Growth

The COVID-19 pandemic has improved the average house earnings by minimizing expenses and increasing the disposable income of consumers. In addition, the rapid growth of population and urban city development has created a strong demand for advanced consumer goods. Integrated circuits (ICs) chips are essential processing components fitted in numerous electronic devices. Devices such as smartphones, TVs, washing machines, and refrigerators are equipped with modern chipsets that perform tasks efficiently and sustainably. Moreover, several consumer goods manufacturers, such as Samsung, Apple, Panasonic, and others, are making large investments in research and new device introduction to cater to the growing consumer demand, which is expected to support the semiconductor market growth in the long-term.

• For instance, in March 2023, Samsung Electronics announced its plan to invest USD 230 billion as a part of the South Korean National Project over the next 20 years to build the world’s largest semiconductor manufacturing base near Seoul.

RESTRAINING FACTORS

Higher Capital Costs and Inventory Drawdowns with Technological Advances May Impede the Market Growth

The high dependency of the economy on the U.S. are major risk factors for the industry as the U.S. holds a dominant share and the country’s volatile leadership can create tremble the market growth. Additionally, U.S. trade restrictions on China can hamper its global position as manufacturing hub and by the time in future, it is expected to suffer a 16% decline in market share. Furthermore, applied tariffs to all industrial goods and essential commodities hampered the chips manufacturing industry. The tariffs has impacted the supply and sourcing of essential semicon components, which in forthcoming period directly impacting the chips manufacturing cost.

In addition, rapidly evolving technology and advanced integration to electronic systems and devices that cost high in sourcing and supplying impede the market growth. However, growth in potential income and demand for technologically advanced products in the market is neutralizing the market impedance.

• For instance, in March 2022, according to our secondary research, it is estimated that the capital expenditure of the semiconductor industry across the globe to rise by 24% to USD 190 billion in 2022.

Semiconductor Market Segmentation Analysis

By Component Analysis

Memory Devices Segment to Showcase Highest CAGR Due to Ongoing Technological Integration of NAND Flash Chips

By component, the market is classified into memory devices, analog IC, logic devices, MPU, MCU, discrete power devices, sensors, and others.

The memory devices segment is estimated to dominate the component segment with the highest CAGR during the forecast period due to the ongoing technological integration of NAND flash chips and DRAM for advancements across the gaming industry, such as cloud computing and virtual reality, that boost revenue for manufacturers.

Similarly, the widening application of logic devices across the industry for application-specific signal processors (ASSP) and application-specific integrated circuits (ASIC) is estimated to grow progressively in the forthcoming years.

The MPU and MCU segments would represent stagnant growth due to brittle investments and shipments. Hybrid MPUs and MCUs offered in the market provide real-time embedded processing and IoT-controlled applications, contributing to substantial market growth.

The analog IC segment is estimated to showcase progressive growth during the forecast period owing to its growing demand in the networking and telecommunications industry. Technologies such as automotive analog applications, signal conversion, and amplification create high demand for discrete power units or discrete power devices.

Relatively, the sensors segment is anticipated to grow moderately during the forecast period due to the changing need for mixed or hybrid technologies in the automotive and telecommunications industry.

The others segment, which includes digital signal processing (DSP), is expected to showcase decent growth during the forecast period due to low demand and less integration in electronics.

By Application Analysis

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Increasing Demand for Smartphones to Aid the Networking & Communications Segment Expansion

The application segment can be divided into networking & communications, industrial, data centers, automotive, consumer electronics, and government.

The networking & communications segment has dominant application across smartphones and smart devices globally and is estimated to grow at a significant compound annual growth rate (CAGR) during the forecast period. In addition, growing data usage network subscribers globally with new bandwidth to expand the semiconductor market size progressively.

The data centers segment is forecasted to hold a significant market share during the study period due to the increasing number of e-commerce platforms, cloud data computing, and data processing, leading to the segment growth.

Consumer electronic devices, such as smartphones, wearable devices, smart televisions, and other electronics, play a vital role in expanding market share.

The automotive segment is forecasted to grow moderately during the study period due to the narrow penetration of hybrid and electric vehicles into the market. However, integrating smart electronic capabilities in vehicles across safety, body, powertrain, and smart infotainment applications may enhance the segment growth.

The industrial segment is witnessing a steady growth due to traditional manufacturing machines application and slow progressive shift of industries to the industry 4.0 revolution.

The government segment is poised to portray stagnant growth during the forecast period due to a decline or limited investments and development in communications technology projects.

REGIONAL ANALYSIS OF THE SEMICONDUCTOR INDUSTRY

The market can be further classified into North America, Europe, the Asia Pacific, the Middle East & Africa, and Latin America in terms of region.

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The Asia Pacific dominates the global industry reaching USD 308.95 billion in 2023, exhibiting the highest growth in the market across the globe. The region can supply a secured amount of raw and manufactured materials to manufacture a huge amount of Semicon components. It still has the upper edge in chip production with the latest facilities. It owns the most advanced artificial intelligence (AI) services that can ship final products to end users globally—all in a highly efficient and reliable manner. In addition, developing countries such as India, Taiwan, and Malaysia have the growing potential to dominate the global market share in the region.

China to Hold the Largest Share Due to Increasing Local Product Manufacturers

China is forecasted to hold the largest global market share and is projected to undergoing a moderate CAGR growth in the upcoming years, owing to the decline in relocation of global semicon manufacturers and the increasing presence of local semicon component manufacturers. China semicon manufacturers have a leading edge in the market with a smooth local supply of raw materials and the ability to export bulk quantities at a cheaper price, extending the market share in the Asia Pacific.

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The North America market is exhibiting dynamic growth primarily driven by growing investments across research and development. As per the Semiconductor Industry Association (SIA), U.S. semicon manufacturing companies continued to invest heavily in R&D, approximately one-fifth of annual revenue in R&D. This consolidation amounted to a record USD 50.2 billion in 2021, and prime development was in turbocharge chip advancements.

The European market is expected to witness steady growth supported by investments across telecom and the demand in the automotive industry. Companies across the region are investing heavily in the integration and innovation of new technologies with smart processing chipsets that enable connected technology growth. In addition, the expansion of their production capacities by players to fulfill the growing demand for advanced electronics across countries such as France, the U.K., and Germany is further expected to support the Europe market growth.

• For instance, on 6^th February 2023, The European Semiconductor Industry Association (ESIA) achieved a record figure in sales in the European market of USD 53.809 billion in 2022, a sharp increase of 12.3% Year on Year.

The growing transition and technological demand shift through investments in technology is poised to drive the growth of the Middle East & Africa silicon chips market. The growing demand for industrial electronics and high-end computing devices for the evolving gaming & digital industry is expected to further propel the regional growth.

The UAE has planned an Industry 4.0 revolution that aims to advance manufacturing by 30% at the same time, upsurge productivity, and develop new products.

Furthermore, Latin America market is expected to grow substantially and showcase a healthy growth during the forecast period due to increasing smartphone, TV, and laptop consumption in Mexico and Brazil. Consumers across the region are investing majorly in high-end configuration devices, owing to technology adoption and a rise in disposable income.

• For instance, in April 2022, The Mexican Minister of Economy signed a cooperation agreement with Intel Mexico to strengthen the Semicon supply chain and promote invention.

COMPETITIVE LANDSCAPE

Key Focus on Innovative Products Development to Strengthen Product Offerings

Key players in the industry are focusing on strengthening their product offerings with new innovative products with enhanced technology. The latest generation of specially designed chipsets has WLAN arrangements and Wifi Router compatibility. In addition, the chipsets are optimized with Radio Frequency power to amplify high bandwidth and low-latency applications, including 4K ultra HD video streaming and augmented reality (AR). Key players' capabilities and technological advancement enhance the customer experience and technology offerings in the industry.

• For Instance, in August 2022, Broadcom Inc. announced the delivery of the StrataXGS Tomahawk 5 switch series that provides 51.2 Terabits/Sec of Ethernet switching that offers double the bandwidth in a single monolithic device.

LIST OF WORLD'S TOP SEMICONDUCTOR COMPANIES:

• Broadcom, Inc. (U.S.)


• Samsung Electronics (South Korea)


• Intel Corporation (U.S.)


• Maxim Integrated Products, Inc. (U.S.)


• Taiwan Semiconductors (Taiwan)


• Micron Technology (U.S.)


• NXP Semiconductors N.V. (Netherlands)


• NVIDIA Corporation (U.S.)


• Qualcomm (U.S.)


• SK Hynix (South Korea)


• Texas Instruments (U.S.)


• Toshiba Corporation (Japan)

RECENT DEVELOPMENTS IN THE SEMICONDUCTOR INDUSTRY:

• March 2023: Envision Energy, an Envision Group subsidiary providing the world’s leading green technology, announced that it has started adopting Analog Devices, Inc. (Micro Electromechanical Systems) MEMS sensor technology in its new generation of smart wind turbines.

• March 2023: Samsung Electronics Co., Ltd., the global leader in innovative memory technology, and NAVER Corporation, a leading internet company, collaborated to develop hyper-scale semiconductor solutions for Artificial Intelligence (AI) Models.


• February 2023: Qualcomm Technologies Inc. and NEC Corporation announced the continuation of the cooperation to promote the commercialization of next-generation networks with their latest 5G vDU powered with the X100 5G Accelerator card.


• December 2022: Global Chip Manufacturer Qualcomm Technologies introduced its WiFi-7 capable chipsets as a part of its new immersive home platform that supports high-speed connections.


• December 2022: Taiwan Semiconductor (TSC), a leading LED driver manufacturer, Analog ICs, and ESD protection devices supplier, announced the launch of SMPC4.6U wettable flank in their package devices segment.

REPORT COVERAGE

The market report offers an in-depth analysis and further provides details on product adoption across several regions. Information on trends, drivers, opportunities, threats, and market restraints can further help stakeholders gain valuable insights. The report offers a detailed competitive landscape by presenting information on key players and their strategies in the market.

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