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The semiconductor market size is estimated to grow by USD 112.8 billion, at a CAGR of 3.42% from 2023 to 2028. The market's expansion hinges on several crucial factors, notably the widespread integration of IoT devices and the burgeoning number of data centers, driven by escalating demand across sectors like the automotive industry. At the heart of this technological revolution lies the pivotal role of semiconductors. These materials exhibit unique properties, facilitating both partial conduction and insulation of current. This versatility makes semiconductors ideal for rapid switching and modulation within circuits. Acting as conductors under external influences such as electric fields, temperature variations, and light exposure, it empower the functionality of various electronic devices, laying the foundation for innovations that drive the market forward in an era of digital transformation.
The semiconductor market growth and forecasting report includes key player's detailed analyses of the competitive landscape of the market and information about 20 market companies, including Analog Devices Inc., Infineon Technologies AG, Intel Corp., MediaTek Inc., Microchip Technology Inc., Micron Technology Inc., NVIDIA Corp., NXP Semiconductors NV, ON Semiconductor Corp., Qualcomm Inc., Renesas Electronics Corp., Samsung Electronics Co. Ltd., Skyworks Solutions Inc., Sony Group Corp., STMicroelectronics International N.V., Taiwan Semiconductor Manufacturing Co. Ltd., Texas Instruments Inc., Toshiba Corp., and Wolfspeed Inc. Additionally, Broadcom Inc offers semiconductor solutions such as Global Navigation Satellite Systems and GPS SoCs.
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The market is propelled by a confluence of key drivers and trends, including the exponential growth of Artificial Intelligence, the Internet of Things, and Machine Learning applications. As per IDC and the Semiconductor Industry Association, demand surges from B2B enterprises, B2G enterprises, and B2C enterprises fuel market expansion. While VAT fluctuations impact pricing, springing demand for memory chips, PC sales, and smartphone, the sector faces challenges such as inventories, fab utilization, and ensuring profitability amidst contemporary technology advancements and evolving consumer preferences for subsequent technologies. Our researchers analyzed the market research and growth data with 2023 as the base year, along with the key market growth analysis, trends, and challenges. A holistic analysis of drivers, trends, and challenges will help companies refine their marketing strategies to gain a competitive advantage.
One of the key factors driving the market growth is the increasing number of data centers. One of the vital infrastructures which are used for storing, processing, and managing huge amounts of data generated by different digital applications and services is data centers. Factors such as the digital transformation and increasing adoption of advanced technologies, including cloud computing, big data analytics, AI, and the IoT, led to the explosion of data.
Hence, in order to handle these immense workloads efficiently, several data centers need processors and memory chips. Thus, data centers require advanced semiconductor technologies such as high-end CPUs, GPUs, semiconductor sensors, and specialized accelerators in order to cater to high-performance computing applications, such as scientific simulations, financial modeling, and AI training. Semiconductor sensors play a crucial role in data centers, providing essential functionalities like temperature monitoring, humidity sensing, and power management, ensuring optimal operational conditions.
A key factor shaping the market growth is the rising demand for 5G chipsets. Some of the key advantages of 5G technologies include high-frequency broadband capacity and ultra-low latency, which enables the development of industrial internet, AR/VR, cloud gaming, real-time computing, and other industries. The main advantage of the 5G chipset is that it enables aster flow and processing of information.
Moreover, these integrated chipsets can be utilized to send data at a rate ten times faster than 4G. As per the report by Next Move Strategy Consulting, the global 5G chipset market is expected to reach USD 90.79 billion by 2030. Additionally, almost 186 operators in 48 countries are planning to develop 5G, with regions such as North America, Europe, and Asia estimated to account for 75% of all spectrum deployments. Semiconductor fabrication software plays a critical role in designing and optimizing the production processes of these advanced chipsets, ensuring efficient manufacturing and high yields.
The supply-demand gap in the global market is one of the key challenges hindering the market growth. The increased demand has led to supply shortages and longer lead times for semiconductor products. Manufacturers may struggle to keep up with the rising demand, resulting in delayed delivery of chips to customers. With demand outstripping supply, prices often increase. This can affect profit margins for manufacturers and lead to higher costs for end-users, impacting consumer electronics prices and potentially reducing consumer spending.
As the industry transitions to new and advanced manufacturing nodes, there can be production challenges and yield issues. These transitions can further exacerbate the supply-demand gap during the ramp-up phase. Semiconductor IP (Intellectual Property) plays a crucial role in these transitions, providing essential designs and blueprints for integrated circuits that are adapted to new manufacturing processes. However, integrating semiconductor IP into new nodes involves complexities such as design compatibility and optimization, which can contribute to production challenges and yield issues.
The networking and communication segment is estimated to witness significant growth during the forecast period. The network and communication segment comprises different types of semi devices and components utilized in various communication technologies and networking infrastructures. There is an increasing demand for these semiconductor solutions in this segment as the world is becoming more connected and reliant on efficient communication.
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The networking and communication segment was the largest segment and was valued at USD 184.60 billion in 2018. There is an increase in demand for data due to the e proliferation of smartphones, tablets, laptops, IoT devices, and other connected devices. As a result, there is an increasing preference for faster and more reliable communication among consumers and businesses fuelling the need for advanced semiconductor solutions that support high-speed data transmission. The advancement of 5G technology enables higher data speeds and lower latency, facilitating a wide range of new applications and services, including enhanced mobile connectivity. Therefore, it is expected that the launch of 5G technology will fuel the demand for communication ICs as this technology requires a vast array of semiconductor components, such as RF front-end modules, baseband processors, and antennas. Hence, such factors are expected to fuel the growth of this segment which in turn will drive the market growth during the forecast period.
The proliferation of electronic devices, from smartphones and tablets to smart appliances and wearables, fuels the demand for the ICs segment, which will increase the market growth. ICs can be referred to as miniaturized electronic circuits that constitute transistors, diodes, capacitors, and resistors integrated into a single semiconductor wafer. There is an increasing demand for ICs as they are utilized for various applications in different industries. Some of the key application areas of ICs include consumer electronics, automotive systems, industrial automation, medical devices, telecommunications, data centers, and several other fields. The growth of the consumer industry will positively impact the growth of this segment as it requires high-performance ICs to power these devices. Hence, such factors are expected to drive market growth during the forecast period.
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APAC is estimated to contribute 79% to the growth of the global market during the forecast period. Technavio's analysts have provided an extensive insight into the market forecast, detailing the regional trends and drivers influencing the market's trajectory throughout the forecast period. One of the prominent countries in APAC which is significantly contributing to the market growth in the region is China. The main factor fuelling the growth of the market in the region is the rising demand for semiconductors from the automotive, aerospace, electronics and electrical, and other end-user industries in developing economies such as China and India. Additionally, the increase in disposable income in these countries also fuels the market growth in the region. There is rapid industrial automation in several APAC countries, such as China, India, South Korea, Indonesia, and Taiwan, which is expected to accelerate the demand for semiconductors in the region. Hence, such factors are expected to drive market growth in the region during the forecast period.
The semiconductor market forecasting report includes the adoption lifecycle of the market research and growth, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the semiconductor market report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth and trends strategies.
Market Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Infineon Technologies AG: The company offers semiconductors solutions such as CoolGaN, CoolGaN e mode HEMTs and GaN HEMT transistors.
Market analysis and report of qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The semiconductor market analysis report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024-2028, as well as historical data from 2018 - 2022 for the following segments.
The market is a dynamic ecosystem influenced by various factors such as GDP, exchange rates, and cyberattacks. Key players like Navitas Semiconductor, Polymatech Electronics, and ASE/SPIL drive innovation, while intense competition fuels advancements in smart manufacturing and assembly and test capacity. As the demand for AI semiconductors and high-energy devices rises, semiconductor companies focus on dependability and affordability to meet the needs of diverse electronics. With the advent of 5G and autonomous driving, the market witnesses widespread adoption, contributing to the electrification and sustainability of various industries. From healthcare to aerospace and defense, semiconductors power critical systems, ensuring efficient power management and minimal power loss for a sustainable and connected future.
Market Segmentation is driven by a multitude of factors, including the proliferation of Artificial intelligence, the Internet of Things, and Machine learning technologies across diverse sectors. Organizations, whether B2B, B2G, or B2C enterprises, fuel demand for integrated circuits and semiconductor devices to power their operations. Industry players like IDC and the Semiconductor Industry Association play pivotal roles in shaping market trends and forecasts. From memory chips to computer chips and data center chips, the market caters to a wide range of applications, driving innovation and progress. As demand for contemporary technology surges, semiconducting materials form the backbone of electronic components, facilitating breakthroughs in subsequent technologies. Amidst fluctuating inventories and fab utilization, the market remains robust and profitable, poised for continued growth in the ever-evolving landscape of electronics.
Market Scope |
|
Report Coverage |
Details |
Page number |
192 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 3.42% |
Market growth 2024-2028 |
USD 112.8 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
3.26 |
Regional analysis |
APAC, North America, Europe, South America, and Middle East and Africa |
Performing market contribution |
APAC at 79% |
Key countries |
China, US, Germany, Canada, and UK |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Analog Devices Inc., Broadcom Inc., Infineon Technologies AG, Intel Corp., MediaTek Inc., Microchip Technology Inc., Micron Technology Inc., NVIDIA Corp., NXP Semiconductors NV, ON Semiconductor Corp., Qualcomm Inc., Renesas Electronics Corp., Samsung Electronics Co. Ltd., Skyworks Solutions Inc., Sony Group Corp., STMicroelectronics International N.V., Taiwan Semiconductor Manufacturing Co. Ltd., Texas Instruments Inc., Toshiba Corp., and Wolfspeed Inc. |
Market dynamics |
Parent market analysis, Semiconductor market research report, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID 19 impact and recovery analysis and future consumer dynamics, Semiconductor market worth and condition analysis for forecast period |
Customization purview |
If our semiconductor market trends report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Application
7 Market Segmentation by Product
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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