Semiconductor Market

Semiconductor Market Outlook 2032

The global semiconductor market size was USD 664.54 Billion in 2023 and is projected to reach USD 1918.2 Billion by 2032, expanding at a CAGR of 12.5% during 2024–2032. The market growth is attributed to the increasing demand for innovative semiconductor solutions and the rising adoption of semiconductors in electronic devices.

Rising demand for innovative technologies leads to a high demand for semiconductors, thereby boosting the market. Semiconductor components serve as the building blocks of modern electronic devices, powering smartphones, tablets, laptops, and smart appliances. The expanding applications of semiconductors in emerging technologies include artificial intelligence (AI), machine learning (ML), 5G connectivity, and autonomous systems. Moreover, increasing investments and initiatives in the R&D of compact and energy-efficient electronic devices are driving the demand for semiconductors.

• According to the report published by the Semiconductors Industry Association on February 9, 2024, John Neuffer, the President and CEO of SIA, announced the investment of USD 5 billion in semiconductor research and development through the National Semiconductor Technology Center (NSTC). Additionally, the administration has provided funding for critical semiconductor workforce initiatives and other programs.
  

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Impact of Artificial Intelligence (AI) on the Semiconductor Market

The emergence of artificial intelligence is anticipated to boost the semiconductor market in the coming years. AI technologies empower businesses to analyze vast datasets, extract valuable insights, and make data-driven decisions, enhancing operational efficiency and driving innovation. Moreover, AI-driven design automation tools streamline the semiconductor design process, reducing time to market and enhancing chip performance.

Semiconductor Market Dynamics

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Major Drivers

Increasing demand for consumer electronics is anticipated to drive the market during the forecast period. The demand for advanced semiconductor components, such as processors, memory chips, and sensors, has increased due to the widespread adoption of smartphones, tablets, laptops, and other smart devices. Moreover, emerging technologies such as 5G, artificial intelligence, and virtual reality contribute to the market growth.

• According to the report published by the Semiconductor Industry Association (SIA) on March 24, 2024, the global semiconductor industry sales grew 15.2% YoY to USD 47.6 billion in January 2024.

Existing Restraints

Disruptions in the global semiconductor supply chain are expected to hamper the market. Disruptions in the semiconductor supply chain due to natural disasters, geopolitical tensions, trade disputes, and logistics bottlenecks impact production capacity and lead times. Furthermore, geopolitical uncertainties and trade tensions between major semiconductor-producing regions pose risks to the stability and resilience of the global semiconductor supply chain. These all factors hinder the market.

Emerging Opportunities

Growing investments in semiconductor research and development (R&D) are expected to create immense opportunities for the players competing in the market. Manufacturers are focusing on the R&D of semiconductors to address emerging challenges, such as scaling limitations, power consumption, and reliability concerns, while exploring new opportunities in the field of artificial intelligence, 5G connectivity, and autonomous systems. Furthermore, R&D fosters collaboration with academic institutions, industry partners, and government agencies to leverage expertise and accelerate technology development, thereby fueling the market.

Scope of the Semiconductor Market Report

The market report includes an assessment of the market trends, segments, and regional markets. Overview and dynamics are included in the report.

Semiconductor Market Segment Insights

Component Segment Analysis

Based on component, the market is divided into memory devices, logic devices, analog IC, MPU, and discrete power devices. The memory devices segment held a major share of the market in 2023 due to the increasing demand for memory-intensive applications, such as data centers, cloud computing, artificial intelligence, and smartphones.

Dynamic random access memory (DRAM), NAND flash memory, and other type of memory devices are essential components in these applications to facilitate rapid data access, storage, and processing. Additionally, advancements in-memory technologies, such as 3D stacking, multi-level cell (MLC) architecture, and emerging non-volatile memory (NVM) technologies are contributing to the segmental growth.

The analog IC segment is expected to expand at a significant growth rate in the coming years owing to the growing demand for IoT devices, wearable technology, and smart devices. Moreover, the increasing adoption of electric vehicles, renewable energy systems, and power-efficient electronics fuels demand analog ICs for power management and energy harvesting, thereby boosting the segment.

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Application Segment Analysis

On the basis of application, the global market is segregated into networking & communications, data processing, industrial, consumer electronics, automotive, government, and others. The consumer electronics segment held a large market share in 2023 due to the increasing demand for smartphones, tablets, laptops, smart TVs, and wearable devices. These devices require advanced semiconductor components, such as processors, memory chips, sensors, and display drivers. Additionally, the rising integration of semiconductor technology in everyday consumer products and the ongoing digitalization are further propelling the segment.

The networking and communications segment is anticipated to expand at a substantial CAGR during the forecast period due to the rapid shift toward 5G networks, cloud computing, and streaming services. Semiconductor solutions such as network processors, ethernet controllers, wireless modems, and optical transceivers are important in enabling fast, reliable, and scalable communication networks. Furthermore, the advancements in semiconductor manufacturing processes, packaging technologies, and system-level integration enable the development of energy-efficient and cost-effective networking solutions.

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Regional Outlook

In terms of region, the global semiconductor market is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. Asia Pacific held a major market share in 2023 due to the presence of a sizeable semiconductor manufacturing hubs in Taiwan, South Korea, China, and Japan. These countries benefit from established semiconductor ecosystems, robust infrastructure, and government support. Additionally, the growing demand for consumer electronics in the region due to rising disposable incomes, urbanization, and technological advancements significantly boost the demand for semiconductors, thus boosting the market.

The market in North America is projected to grow at a significant pace in the coming years owing to the heightened demand for semiconductor solutions. For instance, according to the report published by the Semiconductor Industry Association, semiconductor sales in the US reached USD 257.5 billion in 2021.

Rapid expansion of the automotive, aerospace, defense, and telecommunication industries in the region drives the market, as these industries heavily rely on semiconductor technology. North America is a frontrunner in the development and adoption of emerging technologies, including artificial intelligence, machine learning, and autonomous systems, which fuels the demand for specialized semiconductor solutions.

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Segments

The semiconductor market has been segmented on the basis of

Component

• Memory Devices
• Logic Devices
• Analog IC
• MPU
• Discrete Power Devices

Application

• Networking & Communications
• Data Processing
• Industrial
• Consumer Electronics
• Automotive
• Government
• Others

Region

• Asia Pacific
• North America
• Latin America
• Europe
• Middle East & Africa

Key Players

• Analog Devices, Inc
• Broadcom
• Intel Corporation
• Micron Technology, Inc
• NIDEC CORPORATION
• NVIDIA Corporation
• NXP Semiconductors
• Qualcomm Technologies, Inc
• Samsung Electronics
• SK HYNIX INC
• Taiwan Semiconductor Manufacturing Company Limited
• TOSHIBA CORPORATION

Competitive Landscape

Key players competing in the global semiconductor market are Analog Devices, Inc; Broadcom; Intel Corporation; Micron Technology, Inc; NIDEC CORPORATION; NVIDIA Corporation; NXP Semiconductors; Qualcomm Technologies, Inc; Samsung Electronics; SK HYNIX INC; Taiwan Semiconductor Manufacturing Company Limited; and TOSHIBA CORPORATION

These companies use development strategies including mergers, acquisitions, partnerships, collaboration, and product launches to expand their consumer base worldwide.

• On October 19, 2023, NIDEC CORPORATION, a key manufacturer of electrical components and a member of the Nidec Group, launched its new robot for semiconductor wafer transfer, the SR7163 series. This robot employs an innovative arm-link mechanism to facilitate horizontal hand movement, catering specifically to operations in narrow spaces. The SR7163 series boasts a remarkable minimum turning radius capable of accommodating pitches as narrow as 6.5mm. Moreover, it features a highly airtight link-type arm designed to meet the industry's high cleanliness standards, adhering to Class-1 cleanliness requirements as per ISO14644-1 standrads.