Enjoy complimentary customisation on priority with our Enterprise License!
The semiconductor market size is projected to reach USD 168.3 billion, at a CAGR of 5.09% from 2022 to 2027. 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, semiconductors empower the functionality of various electronic devices, laying the foundation for innovations that drive the market forward in an era of digital transformation.
To learn more about this report, View Report Sample
The market report extensively covers market segmentation by application (networking and communication, data processing, industrial, consumer electronics, and others), product (ICs, optoelectronics, discrete semiconductors, and sensors), and geography ( APAC, North America, Europe, South America, and the Middle East and Africa). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
The market is propelled by a confluence of key drivers and trends, including the exponential growth of Artificial Intelligence, 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.
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, and specialized accelerators in order to cater to high-performance computing applications, such as scientific simulations, financial modeling, and AI training. Hence, such factors are expected to drive market growth during the forecast period.
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 o 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. Hence, such factors are expected to drive market growth during the forecast period.
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. Such factors are expected to pose a challenge to the growth of the global market during the forecast period.
The market industry 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 report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth and forecasting strategies.
Customer Landscape
Market Segmentation is driven by a multitude of factors, including the proliferation of Artificial intelligence, 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 semiconductor market remains robust and profitable, poised for continued growth in the ever-evolving landscape of electronics.
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.
Get a glance at the market contribution of various segments View Free PDF Sample
The networking and communication segment was the largest segment and was valued at USD 180.13 billion in 2017. 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.
For more insights on the market share of various regions Download PDF Sample now!
APAC is estimated to contribute 75% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during 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 counties 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.
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 Systems and GPS SoCs.
Infineon Technologies AG: The company offers semiconductors solutions such as CoolGaN, CoolGaN e mode HEMTs and GaN HEMT transistors.
Intel Corp: The company offers semiconductors solutions in the form of 12th Gen Intel Core processors, SOMC350 and ASMB788.
The research report also includes detailed analyses of the competitive landscape of the market and information about 20 market 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 market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
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 Scope |
|
Report Coverage |
Details |
Page number |
186 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 5.09% |
Market growth 2023-2027 |
USD 168.3 billion |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
3.18 |
Regional analysis |
APAC, North America, Europe, South America, and Middle East and Africa |
Performing market contribution |
APAC at 75% |
Key countries |
US, Canada, China, Germany, 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., 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., Wolfspeed Inc., MediaTek Inc., and Toshiba Corp. |
Market dynamics |
Parent market growth analysis, Market forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the market forecast period. |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
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 Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
Get lifetime access to our
Technavio Insights
Cookie Policy
The Site uses cookies to record users' preferences in relation to the functionality of accessibility. We, our Affiliates, and our Vendors may store and access cookies on a device, and process personal data including unique identifiers sent by a device, to personalise content, tailor, and report on advertising and to analyse our traffic. By clicking “I’m fine with this”, you are allowing the use of these cookies. Please refer to the help guide of your browser for further information on cookies, including how to disable them. Review our Privacy & Cookie Notice.