ASEAN Semiconductor Market Size, Share & COVID-19 Impact Analysis, By Components (Memory Devices, Logic Devices, Analog IC, MPU, Discrete Power Devices, MCU, Sensors, and Others), By Application (Networking & Communications, Data Processing, Industrial, Consumer Electronics, Automotive, Government) and Country Forecast, 2021-2028

The ASEAN semiconductor market size was USD 26.91 billion in 2020. The regional impact of COVID-19 has been unprecedented and staggering, with semiconductors witnessing a negative demand shock across all regions amid the pandemic. Based on our analysis, the market exhibited a decline of -0.2% in 2020. The market is projected to grow from USD 27.64 billion in 2021 to USD 41.88 billion in 2028 at a CAGR of 6.1% during the 2021-2028 period. The sudden rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.

Governments of developing economies tend towards offering strong economic support in the form of policies such as loan facilities, reserve ratio, etc. With decreasing inflation in 2019, where Indonesia and India had cut rates four times with Indonesia lowered its benchmark to 100 basis points and India 135 points, the monetary policies have been loosened across ASEAN countries to propel the economic activities.

In 2020, monetary authorities across the ASEAN region took required actions as the pandemic hits the economies. Financial institutions offered reserve requirement ratio, refinancing, and rediscount policies, therefore expected to spur the ASEAN semiconductor industry growth in the upcoming years.

Uncertainty in Trading Activities amid COVID-19 to Impede Growth

Generally, China is considered the major global producer of industrial components and commodities. However, with the emergence of the pandemic, there has being a halt in the trade activity, due to which other economies are facing raw material shortages. The way COVID-19 has dragged down, China’s trade is expected to have a profound knock-on effect on the exports of emerging Asian countries, both directly and through this regional value chain.

In 2017, more than 35% of inputs to Vietnam’s manufacturing export commodities came from China. Similarly, more than 20% of inputs to Cambodia, Lao PDR, Indonesia, and India were sourced from China. Moreover, companies adopting a fully digitized process can accurately quote the changed prices, and the manufacturing process can be completed in a day, based on regional limitations. This change in the method can make a significant difference, especially when the companies are factoring in the total cost, including the supply chain from order to distribution. However, effective preventive measures by government agencies have helped in attaining the ASEAN semiconductor market growth position similar to pre-pandemic, with rising need for consumer electronics across the region.

LATEST TRENDS

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Evolution of Chips with Security Features for IoT Devices

Interconnected devices and connections increase the exposure to security risks and possess a threat to a device connected. Multiple leading companies are working towards collaborating their entire ecosystems to provide enhanced experiences, services, and security with their products. Adding security functionality in a chip is a significant effort by the chip manufacturers to increase the product’s value. In the present connected IoT market, devices are available at a low cost. Hence these chips enhance the value of the product. Thereby reducing the cost and requirement of additional components.

Prominent players in the ASEAN semiconductor industry associate with companies, which can aid them in embedding security into the chips. This trend is expected to linger and impact the market substantially as the IoT market expands.

DRIVING FACTORS

Amalgamation of AI and Blockchain Technology to Promote Product Sales

Artificial intelligence is probably the most adopted technology by manufacturers in recent years. The reason being, it offers a reliance on hardware as a core enabler of innovation, especially for memory and logic functions. AI integrated circuits improvise the overall industry architecture while speeding the data movement more efficiently and with increased power across the memory systems. Escalating demand for AI-based components from both public and private sectors is rapidly driving the development of AI in this industry. Artificial intelligence for electric vehicles, advanced driver assistance systems, facial recognition, navigation, personal assistant, etc., creates ample market opportunities for the key ASEAN semiconductor market players.

Similarly, blockchain technology minimizes the cost of transactions and enables traceability and transparency in supply chain processes. Moreover, blockchain's decentralized ledger allows increased transparency over the essential data that results in better accountability and traceability within the manufacturing process.

RESTRAINING FACTORS

Lack in Intellectual Property (IP) Protection Rights Obstructs Growth in Industry

Intellectual Property (IP) protection plays an essential role in offering the IP owners a competitive edge and secured return on investment for innovations. ASEAN countries have become a popular destination for small and medium-sized enterprises (SMEs) with rapid development while creating ample promising business opportunities. To secure sustainable economic growth and achieve high-income status, the ASEAN countries need to modify their basic manufacturing process and export commodities pointing towards innovative and high-value goods and services. Therefore, to attain these factors, the ASEAN countries will need to design a strong framework for protecting intellectual property rights and integrate profoundly into global and regional research and development (R & R&D) networks and manufacturing value chain.

SEGMENTATION

By Components Analysis

Memory Devices Segment to Experience Highest CAGR with Wider Range of Applications

Demand for memory devices would grow significantly over the forecast period. The growth is owed by the ongoing technological developments such as virtual reality and cloud computing in modern end-user appliances. Key market players massive capital spending on the memory devices to support new applications such as enterprise solid-state drives (SSDs), graphics, and other complexes, coupled with real-time workload functions.

Logic devices are anticipated to witness progressive market growth in the coming years, with rising demand from the consumer electronics, data processing, and networking sector for application-specific integrated circuit (ASIC) and application-specific signal processor (ASSP) logic chips. Other electronic components such as MCU, MPU, IC, power devices, sensors, etc. are projected to have stable demand across the semiconductor industry, changing preferences about the mix and hybrid technologies amongst the manufacturers.

By Application Analysis

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Networking & Communications Application Segment to Dominate the Market

The networking and communications segment is anticipated to witness exponential growth with rising demand for consumer electronics amid the COVID-19 pandemic. The data processing segment holds a significant market share with an increase in demand for storage and memory devices and components across the ASEAN over the forecast period.

The consumer electronics segment is expected to witness progressive growth in the near future with the emerging demand and technological developments in wearable devices, mobile phones, and other gaming and electronics devices.

The automotive sector is expected to witness stable market growth with the proposition of electric and automated vehicle manufacturing. Industrial and government sectors are expected to grow steadily with limited applications and consecutive investments.

COUNTRY INSIGHTS

ASEAN is already a major semiconductor manufacturing hub in Asia. The implementation of the ASEAN Economic Community (AEC) integration plan aims to increase global and intra-regional trade while attracting multinational organizations to invest in the emerging technologies and their production likewise.

Vietnam is Projected to Depict Witness Highest Growth Rate with Emerging Electronics & Electrical (E&E) manufacturing sector

Among all the ASEAN countries, Vietnam has seen the greatest intensification across this sector. The highest number of electronics manufacturers dealing in technological development and becoming an important (low-cost) electronics exporter in the region in the last decade. As per HSBC’s global Navigator survey of April 26, 2021, Vietnam’s inbound manufacturing investment has increased by 18% this year. The Philippines and Thailand have experienced a significant rise in net FDI (foreign direct investments), thus expected to surge the growth of the ASEAN market.

Semiconductor industry manufacturers across the ASEAN countries level up the entire supply chain ecosystem by improving the procurement, designing, manufacturing, and testing of the products to ensure that the final product meets the end consumer's needs.

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Henceforth, the manufacturers across Vietnam, Thailand, Singapore, and Malaysia focus on sustainable supply chain management by switching towards sustainable processes and integrated supply chain management.

KEY INDUSTRY PLAYERS

Samsung, Taiwan Semiconductor, and NVIDIA to Focus on Investment and Technology Development Strategies

Major manufacturers across the ASEAN market emphasize a well-built culture of excellence in manufacturing operations and internal control to sustain in the market. With sustainability as a base, key players combine best-of-breed technologies in semiconductor and infrastructure software solutions resulting in category-leading business with sustainable operating and financial results across the region.

• For instance, NVIDIA Corporation utilizes a fabless manufacturing strategy by employing best-in-class suppliers for all phases of the manufacturing process including, water fabricating, assembly, final testing, and packaging.


• In 2019, Samsung Electronics Co., Ltd. Developed sixth-generation V-NAND with 100+ layer single-stack design, third-generation 10-nanometer-class DRAM, EUV process, and 108-million-pixel image.


• In January 2019, Taiwan Semiconductor collaborated with EBV Elektronik, a semiconductor distribution specialist in Europe, to distribute its entire product range including, Diode, Transistor, Photocoupler, Bridge rectifiers, etc.

LIST OF KEY COMPANIES PROFILED:

• Intel Corporation (California, United States)


• Qualcomm (California, United States)


• Samsung Electronics (Suwon-si, South Korea)


• SK hynix (Gyeonggi, South Korea)


• Taiwan Semiconductors (Hsinchu, Taiwan)


• Texas Instruments (Texas, United States)


• Toshiba Corporation (Tokyo, Japan)


• Rohm Semiconductor (Kyoto, Japan)


• Renesas Electronics Corporation (Tokyo, Japan)


• Micron Technology (Idaho, United States)


• NVIDIA Corporation (California, United States)


• NXP Semiconductors N.V. (Eindhoven, the Netherlands)

KEY INDUSTRY DEVELOPMENTS:

• March 2021: TOSHIBA ELECTRONIC DEVICES & STORAGE CORPORATION expands its power devices production capacity by constructing a 300-millimeter water fabrication facility at Kaga Toshiba Electronics Corporation in Japan. The mass production is expected to start in 1^st half of FY 2023.


• January 2021: ROHM CO., LTD. introduced a new ultra-compact side-emitting infrared LED CSL1501RW to expand its miniature PICOLED portfolio, specifically for displays that are head-mounted MR/VRAR (virtual reality, XR) gaming systems and industrial headsets. The CSL1501RW supplies a top wavelength of 860nm in an industry-small side-view design, emitting light parallel to the mounting surface thus, providing exceptional design flexibility.

REPORT COVERAGE

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The ASEAN semiconductor market report offers an in-depth analysis and further provides details on the adoption across several regions. Information on trends, drivers, opportunities, threats, and restraints of the market can further help stakeholders to 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.

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