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The global semiconductor interconnect market is expected to grow at a CAGR of more than 11% during the period 2018-2022, according to a new market research study by Technavio.
Market driver: sustainable growth in the global semiconductor industry
The semiconductor industry has been expanding steadily on a global level. The increase in sales of microelectronics and consumer electronic devices is supporting the growth of the market. The demand for semiconductor ICs is expected to increase gradually due to the advances in the consumer electronics sector such as the emergence of 3D and UHD TVs and hybrid laptops. This will create a demand for semiconductor devices, thereby driving market growth. The launch of 4G in China has resulted in the deployment of LTE technology in the market. This is impacting most of the market segments, which has led to an exponential increase in smartphones and tablets with 3G and 4G connections instead of just Wi-Fi. It has also encouraged semiconductor vendors to manufacture high-performance system on chips for communication devices, thereby increasing the need for equipment to produce application processors.
According to a senior analyst at Technavio for semiconductor equipment research, “The need for higher performance devices, in terms of speed and capacity, has created a demand for improved DRAM and NAND mobile devices and data centers. The increased production of such devices will lead to higher demand for semiconductor equipment for testing, depositing, etching, and front-end and back-end processes to confirm proper quality and performance.”
Market trend: intensive competition from Asian countries in the semiconductor industry
China is the largest consumer of cellphones, accounting for more than 80% of the global cellphone consumption. It also accounts for more than 70% of the global notebook and laptop and more than 75% of the global digital camera consumption. The IC market in China was valued at USD 100 billion in 2014. China has the highest semiconductor consumption in the world. The contribution of Chinese companies has yet to grow substantially. For instance, in 2014, Chinese vendors fulfilled only 10% of the total semiconductor IC consumption that was worth USD 100 billion.
Market challenge: slowdown in sales of electronic devices
The slowdown in the sales of cell phones, desktops, and tablets has been a key challenge for the semiconductor foundries. Desktops have seen a steady decline over the years. The global shipment of PCs dropped to almost 13% in the first quarter of 2016. This was a major concern for PC manufacturers. The global tablet market also witnessed a decline in sales.
About Technavio
Technavio is a leading global technology research and advisory company. Their research and analysis focuses on emerging market trends and provides actionable insights to help businesses identify market opportunities and develop effective strategies to optimize their market positions.
