Semiconductor Market Research

A semiconductor is a small electronic device comprised of billions of components that store, move, and process data. Semiconductor devices are designed, developed, and manufactured based on semiconductor materials. These materials include silicon (Si), Germanium (Ge), etc. Semiconductor devices are considered crucial technology enablers that power most of the digital devices in use today. Production of a semiconductor is considered as one of the most complex manufacturing processes. According to the industry norm, it requires 26 weeks to produce a finished chip.

The semiconductor industry is regarded as a broad umbrella that consists of different market segments that make the industry whole. The semiconductor equipment market is further divided into different verticals which include microprocessors & logic devices, memory devices, analog devices, and O-S-D. Microprocessors & logic devices are used for the interchange and manipulation of data in computers and other consumer electronic devices. The vertical commanded the highest share (42%) in the year 2019 which is translated into USD 171 billion of total semiconductor equipment market sales.

Memory devices are used to store information. This includes the Dynamic Random-Access Memory (DRAM) type. Analog devices are used to translate analog signals such as light, touch, and voice in form of digital signals. Finally, the optoelectronics, sensors, and discrete segment which is also referred to as O-S-D vertical. Optoelectronics and sensors are mainly used for generating and sensing light. Discrete type includes transistors, diodes, and resistors which contain only one device per chip and are designed to perform a single electrical function. A variety of products and increased innovation has projected a positive outlook for the semiconductor equipment market.

The semiconductor industry has witnessed robust growth in the past decades. The Semiconductor Industry Association (SIA) announced the global semiconductor industry sales were recorded as USD 439 billion for the year 2020. This was an increase of 6.5% as compared to the year 2019. Global semiconductor sales increased moderately in the year 2020, resisting a challenging macroeconomic environment presented by the pandemic and other socio-political factors. Worldwide semiconductor revenue was recorded as USD 40 billion for January 2021. This was an increase of 13.2% as compared to January 2020 and a 1% increase from December 2020 figures.

The inclusion of emerging technologies such as Artificial Intelligence (AI), 5G, Internet of Things (IoT), Cloud Computing, and Robot Process Automation (RPA) has fueled the demand in this industry. Safety-related electronics systems for autonomous vehicles have contributed towards a significant share in the overall market. Further demand is witnessed in microcontrollers (MCUs), sensors, and memory. Automotive electronics have increased their share from 20% in 2007 to 40% in 2017 in term of cost of production. AI chips are considered to be core components in data centers and AI applications to enhance efficiency and reduce operational costs. Coupled with a constant R&D ecosystem, the semiconductor industry is expected to show robust growth in the coming decade as well.

North American Semiconductor Market Report

The region experienced a 15.4% increase in year-over-year semiconductor sales for January 2021. Worldwide semiconductor revenue for the year 2020 was the highest for this region at 19.8% as compared to other global regions. The North American region recorded a capital expenditure (CAPEX) for the global semiconductor industry as 28% in the year 2019. This CAPEX contribution was dominated by the U.S.A. The U.S semiconductor firms were responsible for the largest share (47%) of the USD 412 billion global semiconductor market in 2019 in terms of total sales. In 2019, U.S based semiconductor manufacturing industry directly employed 184,600 workers. This can be attributed to six US-headquartered or foreign-owned semiconductor companies currently operate more than 20 fabrication facilities. The region has the highest semiconductor market share by company.

Increased overall demand for semiconductors and the ever-growing importance throughout the economy have captured the attention of policymakers. The Congress in Washington enacted legislation earlier this year for the requirement of federal incentives for domestic chip manufacturing and investments in semiconductor research to meet the growing demand. The COVID-19 induced pandemic impacted the supply side of the semiconductor industry in this region. The demand has outstripped the supply, this has led to major delays in the execution of orders such as in the automotive industry. The following shortage acts as a reminder of the essential role played by semiconductors in the crucial areas of an economy.

Matured research capacity and a well-established distribution network have supported the growth of the semiconductor industry in this region. The U.S alone has 9,500+ registered patents in semiconductor technology. The U.S also constitutes 11% of the global fabrication capacity as of 2019. The launch of new products in the market has driven innovation to improve the overall operations. For instance, Micron technology Inc has started to offer high-capacity memory and multi-chip packages that are powered by Artificial Intelligence (A.I). These are utilized in embedded or cloud-in-edge devices and mobiles. The integration of a single system on chip (SoC) has allowed the devices to operate at high power efficiency and enhanced security.

Greater demand from the consumer electronics sectors such as computers, tablets, mobile devices, and much more have supported the growth in this industry. The region has experienced greater acceptance of technology in everyday life and has allowed the release of an innovative product. The U.S is the top global exporter of semiconductors. This is due to the presence of major global players which continue to dominate the global semiconductor market.

European Semiconductor Market Report

The region experienced a 6.4% increase in year-over-year sales for January 2021. The semiconductor industry accounted for 24.6% of the Eurozone’s GDP in the year 2019. Leading suppliers have started to increase the hiring of qualified staff. For instance, TSMC announced a plan in August 2020 to hire 8,000 qualified engineers. Europe is also regarded as the hub for major car manufacturers. Advancements in the automotive industry are expected to support the growth of semiconductors in this region. Furthermore, a robust infrastructure to deploy 5G is already established to meet the required demand of connected devices.

Europe accounted for a share of 10% in total sales of the global semiconductor market for the year 2019. Europe has more than 278 production and R&D factories that manufacture a variety of Integrated Circuits (ICs), power devices, and compound semiconductors. This accounts for an estimated 12% of global IC capacity and 30% of world production for power devices. Austria, France, Germany, Italy, Ireland, and the Netherlands are regarded as key production centers in the EU and European Free Trade Association (EFTA).

The recently announced “European Initiative on Processors and Semiconductors Technologies” has contributed towards an optimistic market outlook in this region. The policies and initiatives have promised an investment of EUR 145 billion in the coming years. This was signed by 19 European Union Members. Such strong investment goals are aimed to empower the semiconductor industry in Europe and increase the share in the global semiconductor industry.

APAC Semiconductor Market Report

East Asia which includes Mainland China, Japan, South Korea, and Taiwan is regarded as an important hub for semiconductor production. Availability of cheap labor and easy access to raw materials has allowed the region to build a robust manufacturing capacity. The rise in mobile communications and cloud computing has supported the demand in APAC.

China has played a significant role in the overall supply chain for the global semiconductor industry. The trade war between China and the U.S.A impacted the growth for China and showcased the increased dependence on the west side. China imports over USD 200 billion worth of IC chips from the U.S. China aspires to be a global powerhouse for the semiconductor market.

Japan and South Korea are major hubs of consumer electronics devices. This has allowed the countries to boost manufacturing and consumption in the local environment. Japan is an important supplier of semiconductor materials, high-end equipment, and special materials. South Korea has commanded a great lead-in global High Bandwidth Memory (HBM), and Dynamic Random-Access Memory (DRAM) market. South Korea commanded a share of 19% in terms of total sales in the APAC region for the year 2019. The country holds the largest semiconductor share in terms of companies.

India is another strong economy that has contributed significantly to the global semiconductor market. India has a strong presence of IT and Software as a Service (SaaS) companies. Software solutions have contributed significantly towards the export side for India. Recent initiatives are taken up by the Government of India to support local manufacturing and attract global players via Production Linked Incentives (PLIs). Such incentives are expected to boost the overall manufacturing capacity of India and contribute a great share in the global semiconductor industry.

Middle East Semiconductor Market Report

The focus of the government of Saudi Arabia and the United Arab Emirates to establish non-oil sectors has boosted the demand for semiconductors in this region. Advancements in technology especially in terms of autonomous cars and drones have contributed towards a positive market outlook for the Middle East. Policies and initiatives by the government are to make the overall business environment more conducive. Greater emphasis on research and development capacities has captured the attention of major global players. Several semiconductor industry giants have started to set up manufacturing and research units in this region.

The UAE’s leadership has aimed towards economic diversification to protect the country’s economy from oil-price fluctuations. To realize this objective, the Abu Dhabi government created the Mubadala Development Company in the year 2002. The company is a 100% government-owned investment vehicle to act as a catalyst for economic diversification. The company entered into advanced technology by establishing the Advanced Technology Investment Company (ATIC). The company has focused its investments on semiconductor silicon wafers which act as a crucial element to make efficient semiconductor devices.

ATIC has invested in both local companies, start-ups, and global companies to boost diversification. The company currently holds more than 250 foundries in different geographies and shares more than 25,000 registered patents with different market players. The region has also focused on upskilling the local population to be technologically sound and attain global standards. For instance, in partnership with IBM, the government of Abu Dhabi was able to launch skill-based programs in more than 17 community colleges.

ROW Semiconductor Market Report

Africa is another region that has shown promising growth in the last few years in terms of semiconductor production and innovation. The technology hubs in Africa increased by over 50% in the last few years. This has allowed Africa to realize a significant share in the global semiconductor market. The semiconductor industry is widely recognized as a key driver and enabler for the entire value chain in Africa.

The market in Latin America has witnessed significant growth on the back of enhanced research initiatives and policies introduced by the government of different geographies. Spain, Argentina, and Brazil are key market players in the Latin American market. Spain has robust knowledge capacity to partner with global companies to drive innovation and launch improved products. Brazil has aimed to increase the manufacturing power in their region to attract more investments from the global players. Brazil recently inked a pact with India to share establish technology units in their country to improve the bilateral ties.

Sub-segments of Semiconductors Market

Security & Surveillance

Display Technology

Drones & Robotics

Industrial Automation

Semiconductor Materials & Components

Augmented / Virtual Reality

Sensors and Control

Battery & Wireless Charging

Electrical System & Components

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Semiconductors Market Research Reports

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