The latest study of Precedence Research on the semiconductor market expects sales to exceed USD 430 billion in 2021 globally and are expected to hit over USD 772.03 billion by 2030 at a steady CAGR of 6.6% during the forecast period 2021 to 2030.
The global semiconductors market is primarily driven by the rising demand for consumer electronics, industrial tools & equipment, automotive products, and networking and communication products.
Challenges and developments in the semiconductor market
Semiconductors are a key component of modern electronics. Companies were able to replace classic thermionic devices, such as vacuum tubes, with elements such as silicon, germanium, and gallium arsenide, allowing electronics to become more compact and portable. Due to advancements in emerging technologies such as autonomous driving, artificial intelligence, and the Internet of Things, as well as consistent research and development spending and competition among the major players, the global semiconductor industry is expected to continue to grow at a rapid pace well into the next decade. In addition, the semiconductor business is predicted to grow as demand for faster and more powerful memory chips in industrial applications grows. Thus, all of these elements are driving the growth of global semiconductor market.
What are the key trends in the semiconductor market?
The absence of chips might block the sale of devices across several end markets. According to Deloitte research, the chip shortfall over the last two years led to revenue losses of more than $500 billion between the semiconductor and its customer industries, with vehicle sales loss totaling more than $210 billion in 2021 alone. This figure shows the importance of semiconductors across all sectors and industries. According to Cisco Systems, there will be a $439 million market linked to wearable devices in North America by 2022, up from $378.8 million in 2021. Due to the increasing demand for semiconductors, a shortage of semiconductor fabs has been noted to meet this need. The growth of the global semiconductor market is being driven by the adoption of innovative technologies such as artificial intelligence, the internet of things, and machine learning.
The expanding trend of connected devices that can be used and applicable in both industrial and residential industries is driving up semiconductor market demand. In the industrial sector, the advantages of the internet of things in cost reduction, preventative analysis, and big data are increasing widespread adoption. As per the Forbes studies, nearly 94% of the CEOs polled said that the internet of things has assisted them to increase their annual earnings by at least 5% to 15%. Semiconductors are widely used in consumer electronics. The semiconductors are used for manufacturing laptops, smartphones, and wearables. As a result, the key market players and government are highly investing in consumer electronics. This is directly impacting the growth of global semiconductor market. Several companies such as Samsung and Apple are deploying semiconductors in their products. All of these factors are driving the growth of global semiconductor market.
What are the challenges in the semiconductor market?
The global semiconductor market is predominantly dominated by emerging nations such as China and the U.S. These countries impose stringent trade rules and norms. All these restrictions need to be followed by market players operating in the global semiconductor market. Not only do trade restrictions need to be followed but also tariffs are applied for such products by various nations. This tariff is mostly applied to industrial goods. This factor impacts the export and import of semiconductor products and materials. One of the major challenges of the global semiconductor market is the poor performance of semiconductor devices and gadgets. They operate poorly in the high-frequency range. As a result, they are not enough efficient in terms of productivity. All of these aforementioned factors are restricting the expansion of the global semiconductor market.
Which regions are driving the semiconductor trend?
Asia-Pacific dominates the global semiconductor market with the highest market share. The market for semiconductors in the region is growing due to the expansion of the automotive and consumer electronics industries. The countries such as South Korea, Japan, and China are supporting the growth of the Asia-Pacific semiconductor market. China is the single largest country in the Asia Pacific region, accounting for 56% of the Asia Pacific market and 34% of the global semiconductor market, according to the World Semiconductor Trade Statistics and Semiconductor Industry Association estimates. Furthermore, government initiatives in South Korea have boosted semiconductor material manufacture. For example, in May 2021, the government stated that it would provide roughly KRW 1 trillion in long-term loans to expand the capacity of 8-inch wafer chip contract production as well as materials and packaging investment. This is paving way for the growth of the semiconductor market in the Asia-Pacific region.
After Asia-Pacific, the North American region dominates the global semiconductor market. The growth of the semiconductor market in this region is being driven by the growing research and development initiatives. As per the Semiconductor Industry Association, research and development spending in the semiconductor market in the U.S. expanded at a CAGR of 6.6% from 1999 to 2019. The research and development expenditures in the U.S. totaled around $39.8 billion in 2019. Thus, this factor is driving the growth of the semiconductor market in this region.
Key Players Analysis
Some of the key players in the global semiconductors market include areIntel Corporation, Qualcomm Technologies, Broadcom, Taiwan Semiconductors, Samsung Electronics, Texas Instruments, SK Hynix, Micron Technology, NXP Semiconductors, and Maxim Integrated Products.
