February 2024
20 Dec 2023
The global semiconductor market size was exhibited at USD 664.2 billion in 2023 and is projected to attain around USD 1,883.7 billion by 2032, growing at a CAGR of 12.28% during the forecast period 2023 to 2032.
The semiconductor market is driven by the growing consumer electronic industry, technological advancements and rising investment. In addition, the growing demand for semiconductor components from the automotive sector is expected to propel the market growth during the forecast period.
A semiconductor is a material with electrical conductivity between that of a conductor and an insulator. The conductivity of a semiconductor can be controlled and modified by factors such as temperature, light, or the addition of impurities, a process known as doping. This ability to manipulate conductivity makes semiconductors a crucial component in electronic devices.
The most common semiconductor material is silicon, but other materials like germanium and gallium arsenide are also used. Semiconductors are fundamental to the operation of various electronic components, including transistors, diodes, and integrated circuits. These components form the basis of modern electronics and are essential in the construction of devices such as computers, smartphones, and other electronic systems. The field of semiconductor physics and technology has played a pivotal role in the development of the digital age. The market is majorly driven by the increasing number of product launches.
For instance, in November 2023, the industry's highest*1 pixel count, 5.32 effective megapixels, will be available soon with the Sony Semiconductor Solutions Corporation (SSS) IMX992 short-wavelength infrared (SWIR) image sensor for industrial equipment. With an industry-smallest*1 pixel size of 3.45 μm among SWIR image sensors, the new sensor makes use of SSS's unique Cu-Cu coupling. In addition, it has a pixel structure tuned to capture light effectively, allowing for high-definition photography over a wide range of wavelengths (0.4 to 1.7 μm) in the short-wavelength infrared area (visible to invisible).
Additionally, in comparison to traditional goods, new shooting modes provide high-quality photographs with noticeably less noise in dimly illuminated areas. To further broaden its array of SWIR image sensors, SSS will also release the IMX993, which has an effective pixel count of 3.21 megapixels and a pixel size of 3.45 μm. These new, very sensitive and pixel-counting SWIR image sensors will aid in the advancement of several industrial devices.
| Report Coverage | Details |
| Market Revenue in 2023 | USD 664.2 Billion |
| Projected Forecast Revenue by 2032 | USD 1,883.7 Billion |
| Growth Rate from 2023 to 2032 | CAGR of 12.28% |
| Largest Market | Asia Pacific |
| Base Year | 2022 |
| Forecast Period | 2023 to 2032 |
| Regions Covered | North America, Europe, Asia-Pacific, Latin America, and Middle East & Africa |
Asia Pacific is expected to dominate the market during the forecast period. The market growth in the region is attributed to the growing investment in the semiconductor industry particularly in China and India. For instance, according to secondary sources, approximately USD 40 billion was spent in the semiconductor sector by the Chinese government.
In the fight to control the manufacture of high-end chips, the nation attempts to overtake the US and other competitors. Furthermore, plans to establish a private-sector task force to improve cooperation between the US semiconductor industry Association (SIA) and the India Electronics and Semiconductor Association (IESA) in the global semiconductor ecosystem were revealed in January 2023.
North America is expected to grow at a substantial rate over the forecast period. The market expansion is ascribed to the growing R&D investment. According to the Semiconductor Industry Association, the U.S. semiconductor sector invested a total of $58.8 billion in research and development in 2022. Over the past 20 years, annual R&D expenses as a percentage of sales have topped 15 percent. Among the main manufacturing sectors of the US economy, this rate is unparalleled. Furthermore, the region's expanding 5G infrastructure presents a possible opportunity for the semiconductor sector.
Driver
Increasing use of semiconductors in automobiles
The market's shift toward autonomous, connected, electric, and sharing (ACES) mobility is the main factor driving the automobile industry's increased semiconductor usage. Advanced driver assistance systems, or "ADAS," are becoming commonplace in most new cars. These features, which include parallel parking, adaptive cruise control, automated braking, blind spot monitoring, and adaptive cruise control, are laying the groundwork for eventually having completely autonomous cars.
The majority of new cars are equipped with connectivity capabilities like Bluetooth, wireless internet, and navigation systems as standard, with advancements in vehicle-to-vehicle and vehicle-to-infrastructure communication being made. In addition, compared to conventional internal combustion engine automobiles, automakers are selling a growing percentage of hybrid and electric vehicles.
The transition to ACES mobility is happening faster due to stricter safety and pollution rules, rising customer demand for comfort, and increasing vehicle performance. Hybrid electric cars can have up to $1,000 and 3,500 semiconductors in them, compared to an average of $330 in conventional automobiles. Thus, this is expected to propel the semiconductor industry during the forecast period.
Restraint
High R&D cost and complex manufacturing
Developing cutting-edge semiconductor technologies requires substantial investments in research and development. The high cost of R&D can be a challenge for smaller companies and may impact profit margins for larger companies. In addition, the fabrication of semiconductor devices involves intricate manufacturing processes. Any disruptions or issues in these processes can lead to delays, increased costs, and reduced yields, affecting the overall market performance. Therefore, the high cost of R&D and complex manufacturing process is expected to hamper the market expansion during the forecast period.
Opportunity
Increasing collaboration
The increasing collaboration is expected to propel the market growth during the forecast period. For instance, in December 2023, a memorandum of understanding (MoU) was struck by major technology giant Siemens AG and one of the biggest semiconductor businesses in the world, Intel Corporation, to work together to advance the digitalization and sustainability of microelectronics production. For example, the partnership will investigate the application of "digital twins" of intricate, extremely capital-intensive manufacturing facilities to standardize solutions where each percentage increase in efficiency has a significant impact.
Along with reducing energy usage, the partnership will investigate sophisticated modeling of natural resources and environmental footprints along the whole value chain. Intel will work with Siemens to investigate product- and supply chain-related modeling solutions that generate data-driven insights and facilitate the industry's acceleration of efforts to reduce its overall environmental impact to obtain more information on emissions connected to products.
The MPU and MCU segment is expected to hold the largest market share during the forecast period. An MPU, or microprocessor, is a central processing unit (CPU) that performs arithmetic and logic operations in a computer. It serves as the brain of a computer or electronic device, executive instructions and coordinating the overall operation of the system. Whereas an MCU, or microcontroller, is a compact integrated circuit that contains a processor core, memory, and input/output peripherals.
MCUs are designed for embedded systems and are used to control specific functions within electronic devices. The broad use of MPUs and MCUs in the production of devices including PCs, laptops, desktops, and notebooks has historically greatly aided in the expansion of this market. The increasing trend of IoT devices and their corresponding demand is driving up demand for powerful processors and controllers, which is driving up the MPU and MCU sectors' growth.
The networking & communications segment is expected to capture a significant market share over the projected period. The proliferation of wireless communication technologies, including Wi-Fi, Bluetooth, and cellular networks (4G and 5G) is a significant driver for semiconductor companies. The demand for wireless connectivity in smartphones, IoT devices, and other wireless-enabled products fuels the growth of this segment.
Furthermore, the increasing demand for high-speed data transmission has led to increased investments in fiber optics and optical networking. Semiconductors play a crucial role in the development of components such as optical transceivers, amplifiers, and switches for optical communication systems. Thus, this is expected to drive the segment expansion.
Market Segmentation
By Component
By Application
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