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The semiconductor market size is projected to reach at USD 766.13 billion by 2027, and grow at a CAGR of 5.09% during forecast year. The growth of the market depends on several factors, including the growing adoption of IoT devices, the increasing number of data centers, and rising demand from the automotive industry. Semiconductors facilitate the partial conduction and insulation of current. This property makes it apt as the semiconductor material to be used for rapid switching and modulation in a circuit. A semiconductor material acts as a conductor when influenced by external factors such as an electric field, temperature, and light.
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.
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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 USD90.79 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 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 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.
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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.
In 2020, during the COVID-19 pandemic, the growth of the global market witnessed a significant slowdown due to the shutdown of manufacturing bases in the electronic industry in China led to supply chain disruptions in the industry. However, in 2021, the initiation of large-scale vaccination drives lifted the lockdown and travel restrictions, which led to the resumption of the automobile and manufacturing industries. Such factors are expected to drive the market during the forecast period.
The market industry 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 report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Semiconductor 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.
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.
Semiconductor 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 analysis, 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 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. |
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