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Semiconductor Market to Grow by 5.08% from 2021 to 2026
July 5, 2023 | PRNewswireEstimated reading time: 2 minutes
The semiconductor market is estimated to grow by USD 156.39 billion during 2021 to 2026. The growth momentum will progress at a CAGR of 5.08% during the forecast period. The market is segmented by products (ICs, optoelectronics, discrete semiconductors, and sensors) and geography (APAC, North America, Europe, South America, and the Middle East and Africa). The semiconductor market share growth in the ICs segment will be significant during the forecast period. The growing investments in Industry 4.0 initiatives are the major factor for the growth of the analog IC segment in the market. The demand for a wide range of semiconductor devices, including voltage regulators, amplifiers, and data converters, is increasing due to the demand for automation in various industries. Furthermore, the vendors are focusing on expanding their analog IC portfolio to tackle the increasing consumer demand.
The growing adoption of IoT devices is one of the key factors driving the market growth. The implementation of smart devices, which includes smart security solutions, smart parking management systems, autonomous guided vehicles, autonomous mobile robots, and smart robots, is increasing due to the expansion of the IoT ecosystem. Magnetic sensors are an important part of smart devices as they have several functions, such as object detection, position tracking, and navigation. Furthermore, the increase in the number of connected devices is providing opportunities for vendors to launch new products in the market. Hence, these factors are expected to drive the market growth during the forecast period.
Semiconductor Market - Vendor Insights
The growing competition in the market is compelling vendors to adopt various growth strategies, such as promotional activities and spending on advertisements to improve the visibility of their services. Technavio report analyzes the market's competitive landscape and offers information on several market vendors, including - Analog Devices Inc., Broadcom Inc., Intel Corp., MediaTek Inc., Microchip Technology Inc., Micron Technology Inc., NVIDIA Corp., NXP Semiconductors NV, ON Semiconductor Corp., Qualcomm Inc., Renesas Electronics Corp., Samsung Electronics Co. Ltd, SK HYNIX Inc., Skyworks Solutions Inc., Sony Group Corp., STMicroelectronics NV, Taiwan Semiconductor Manufacturing Co. Ltd., Texas Instruments Inc., Toshiba Corp., and Infineon Technologies AG.
Major Trends
Sustainability manufacturing is one of the major trends in the market. The key factor driving the growth is emerging technologies such as 5G, AI, and the Internet of Things (IoT). For instance, a semiconductor fab needs around 1 TWh of energy per year and two-to-four million gallons of ultra-pure water daily. Many companies around the world are taking various steps on substantial sustainability programs for manufacturing semiconductors. For example, TSMC has established various water recycling applications, expansion of diverse water sources, and developed pollution prevention techniques that could help to maximize water usage efficiency. Hence, these factors are expected to drive the market growth during the forecast period.
Significant challenges
The impact of the Russia and Ukraine war on the supply chain is one of the factors restricting market growth. The key factor for the growth restriction is the low supply of neon and hexafluorobutadiene gases, which are essential to manufacturing semiconductor chips. Since these are utilized in the lithography processes for chip production. Furthermore, 70% of the world's neon gas is supplied by Ukraine, and the world's largest producer of palladium is Russia. The supply chain, due to the shortage of raw materials, will impact the supply and production of semiconductor chips, EV batteries, and catalytic converters. Hence, these factors are expected to restrict the market growth during the forecast period.
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