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The semiconductor market size is forecast to increase by USD 112.8 billion, at a CAGR of 3.42% between 2023 and 2028. The market is experiencing significant growth, driven by the increasing adoption in sectors such as information technology and communications, healthcare, aerospace and defense, and consumer goods. The majority of this growth can be attributed to the semiconductor materials segment, which includes advanced microelectronics, high-end data centers, automotive applications, medical devices, IoT devices, and power electronics. Key trends include the supply-demand gap in the semiconductor industry, the increasing adoption of sustainability manufacturing, and the growing use of power electronics in consumer electronic appliances such as inverters for air conditioners, washing machines, personal computers, welding equipment, induction heating devices, microwaves, electric cookers, induction stoves, and soft switching for strobe flash control. Furthermore, the market is witnessing an uptick in demand for UPS batteries and power conditioners in various applications. The fabrication segment is also experiencing growth due to the increasing demand for semiconductor materials in the production of process chemicals. Overall, the market is poised for continued growth in the coming years.
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The semiconductor industry continues to experience significant growth, driven by the integration of contemporary technologies such as artificial intelligence (AI) and the Internet of Things (IoT) into various applications. IDC forecasts that the market will reach a value of USD 1.1 trillion by 2025, growing at a CAGR of 6.5% during the forecast period. B2B enterprises, B2G enterprises, and B2C enterprises are the primary consumers of semiconductors, with the VAT segment accounting for the largest market share. Semiconductor devices, including memory chips, computer chips, data center chips, and communication chips, are integral components of these applications. The PC sales decline has been offset by the growth in smartphone sales, leading to increased demand for semiconductors.
However, inventories have been declining due to high fab utilization rates, making semiconductors a profitable investment. Spring has brought progress and breakthroughs in semiconductor technology, with the development of advanced semiconducting materials, transistors, and diodes. The semiconductor industry association anticipates subsequent technologies, such as AI and machine learning, to further fuel market growth. Overall, the semiconductor industry is poised for continued progress and innovation.
The semiconductor market research 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 networking and communication segment is estimated to witness significant growth during the forecast period. The market is experiencing significant growth, particularly in the computer chip sector, which includes data center chips. The increasing demand for advanced semiconductor solutions is driven by the proliferation of contemporary technology, such as generative AI accelerators for generative AI, and the implementation of smart manufacturing processes. The chip industry is witnessing progress and breakthroughs in semiconductor devices, including transistors, diodes, and fundamental functional units, leading to the development of more compact and affordable integrated circuits. The networking and communication segment is a substantial part of the market. It incorporates a wide array of semiconductor devices and electronic components utilized in various communication technologies and networking infrastructures.
As the world becomes increasingly interconnected, the need for efficient communication solutions continues to escalate. The wave in data demand from consumers and businesses alike is fueled by the growing number of smartphones, tablets, laptops, IoT devices, and other connected devices. The advent of 5G technology is further driving the demand for advanced semiconductor solutions, enabling faster data transmission and supporting a myriad of new applications and services. However, the semiconductor industry faces challenges, including inventory management and fab utilization, cyberattacks, export controls, and the need for advanced node manufacturing equipment.
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The networking and communication segment accounted for USD 184.60 billion in 2018 and showed a gradual increase during the forecast period.
APAC is estimated to contribute 79% to the growth of the global semiconductor market during the forecast period. Technavio's analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
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The market in the Asia Pacific (APAC) region is experiencing significant growth, with China being a major contributor to this expansion. The increasing demand for semiconductors in industries such as automotive, aerospace, electronics and electrical, and others, particularly in developing countries like China and India, is driving market growth. Moreover, the rise in disposable income and subsequent increase in demand for automobiles, electronics, and electrical devices are further fueling market expansion. Industrial development in countries like China, India, South Korea, Indonesia, and Taiwan is leading to high levels of automation in various sectors, thereby increasing the need for advanced semiconductor devices, electronic components, and semiconducting materials. These include fundamental functional units such as transistors and diodes, as well as integrated circuits and sophisticated semiconductor devices like generative AI accelerators for Gen AI applications.
The semiconductor industry is witnessing progress and breakthroughs in contemporary technology and subsequent technologies. However, challenges such as cyberattacks, export controls, and the need for node manufacturing equipment pose significant hurdles. Despite these challenges, the market is expected to remain profitable and continue its growth trajectory. Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
Growing adoption of IoT devices is the key driver of the market. The semiconductor industry is experiencing significant growth due to the increasing adoption of AI and the Internet of Things (IoT) in various sectors. According to the Semiconductor Industry Association, the market is expected to reach a value of USD 1.1 trillion by 2025, driven by the demands from B2B enterprises, B2G enterprises, and B2C enterprises. IDC forecasts that the IoT market will reach USD 1.1 trillion by 2023, with magnetic sensors playing a crucial role in IoT devices. These sensors, including Hall effect sensors, TMR sensors, and reed switch sensors, are used for functions such as object detection, position tracking, and navigation.
Further, the top-down approach and bottom-up validation of the semiconductor industry are essential for the production of integrated circuits. The level of digitization, exchange rates, and economic indicators such as GDP also impact the market. Furthermore, emerging technologies such as virtual reality (VR), 5G, and 6G are expected to drive the demand for memory chips, PC sales, smartphones, and communication systems, leading to continued growth in the semiconductor industry.
Increasing adoption of sustainability manufacturing is the upcoming trend in the semiconductor market. The semiconductor industry is experiencing significant growth due to the increasing adoption of emerging technologies such as artificial intelligence (AI), the Internet of Things (IoT), and machine learning. According to the Semiconductor Industry Association, B2B enterprises, B2G enterprises, and B2C enterprises are driving the demand for semiconductors. A single semiconductor fab consumes approximately 1 terawatt-hour (TWh) of energy per year and two-to-four million gallons of ultra-pure water daily. The semiconductor industry's energy consumption and water usage are escalating due to the increasing demand for semiconductors in technologies like 5G, AI, and IoT.
However, leading semiconductor manufacturers are implementing sustainability programs to address these challenges. For instance, TSMC is focusing on water recycling applications, expanding diverse water sources, and developing pollution prevention techniques to optimize water usage efficiency. Similarly, Intel is investing in renewable energy sources and energy-efficient manufacturing processes. The semiconductor industry's growth is also influenced by factors such as GDP, level of digitization, exchange rates, and technological advancements like virtual reality (VR), 6G, and memory chips.
In summary, the semiconductor industry's growth is driven by emerging technologies, increasing demand from various sectors, and advancements in manufacturing processes. Semiconductor manufacturers are implementing sustainability programs to address the challenges of energy consumption and water usage. The industry's growth is also influenced by various economic and technological factors.
Supply-demand gap in the semiconductor industry is a key challenge affecting semiconductor market growth. The market has witnessed significant growth in recent years, primarily driven by the increasing adoption of artificial intelligence (AI) and the Internet of Things (IoT) in various industries. The integration of machine learning algorithms and advanced integrated circuits in B2B enterprises, B2G enterprises, and B2C enterprises has led to an uptick in demand for semiconductors. The level of digitization in sectors such as VR, 5G, and 6G technology, and the semiconductor industry's role in enabling these advancements, further fuels market expansion.
However, the current market landscape is characterized by supply shortages and longer lead times, causing semiconductor prices to rise. This can impact profit margins for manufacturers and increase costs for end-users, potentially influencing consumer spending on electronics. A top-down approach to market analysis, combined with bottom-up validation, is crucial for understanding the complexities of the market and making informed business decisions.
The semiconductor market forecasting report includes the adoption lifecycle of the market, 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 growth analysis report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.
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.
Broadcom Inc.: The company offers semiconductor solutions such as Global Navigation Satellite System and GPS SoCs.
The semiconductor market research and growth report includes detailed analyses of the competitive landscape of the market and information about key companies, including:
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 is experiencing significant growth due to the rising need for artificial intelligence, IoT, machine learning, and emerging technologies in various sectors. Integrated circuits, memory chips, computer chips, data center chips, and power semiconductors are the fundamental functional units of electronics, driving the demand for semiconductors in diverse applications. The semiconductor industry association reports that the market is essential for B2B enterprises, B2G enterprises, and B2C enterprises. The level of digitization, exchange rates, and changes in demand impact the semiconductor industry. Semiconductor devices, including transistors, diodes, and integrated circuits, are becoming more affordable, dependable, and compact, leading to their widespread adoption in industries such as automotive, consumer electronics, IT and communications, healthcare, aerospace and defense, and more. The semiconductor industry faces intense competition and manufacturing capacity constraints, leading to changes in demand, shortages, and customer behavior impacting business revenues and corporate operations.
Further, the supply side is essential, with essential parts and components being semiconductor devices and semiconductor materials, such as silicon, gallium arsenide, and emerging materials like aluminum nitride and carbon nanotubes. The market is evolving, with breakthroughs in high-energy, power-efficient devices, wireless, and portable electronic products, efficient power management, and system architectures. The semiconductor industry is also embracing smart manufacturing, AI semiconductors, and chip industry IP to stay competitive. However, challenges such as cyberattacks, export controls, and node manufacturing equipment also impact the industry's progress. The market is expected to continue its growth in the forthcoming years, with the majority of revenue coming from discrete semiconductors and the semiconductor devices segment.
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, market growth inducers and obstacles, market forecast, fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, market condition analysis for the forecast period |
Customization purview |
If our semiconductor market forecast 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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