DATA CONVERTERS MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024-2031)

Market Size and Trends

The Global data converters market is estimated to be valued at US$ 6.13 Bn in 2024 and is expected to reach US$ 9.94 Bn by 2031, growing exhibiting a compound annual growth rate (CAGR) of 7.1% from 2024 to 2031. Increasing use of data converters in industrial automation equipment and growing demand for high speed data conversion are expected to drive the market growth during the forecast period.

Global data converters market is witnessing growth, owing to increasing investments by governments worldwide for the deployment of advanced technologies. Furthermore, growing adoption of internet of things across industrial and automotive sectors boosts demand. Rising need for high speed data transfer and connectivity is expected to drive the market growth. Developing economies in Asia Pacific and Middle East is expected to offer numerous opportunities for players in the near future.

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Market Driver: Rising Demand for Data Converters in Consumer Electronics

There has been rise in demand for data converters due to rising adoption of consumer electronics globally. In today's digitalized world, almost all consumer electronic devices such as smartphones, smart home appliances, tablets, wearable devices and Internet of Things (IoT) enabled products incorporate data converters to enable the conversion of analog signals to digital and vice versa. Most of these modern consumer electronic products have multiple data converters integrated to support different types of connectivity such as Wi-Fi, Bluetooth, USB, cellular as well as sensors. The continuous advancement of communication technologies have enabled new connectivity options in these devices that boosts the need for integrating additional data converters.

As more people across the world are able to afford smartphones and other smart electronic gadgets, the sales of consumer electronics increases steadily over the past few years. According to recent estimates, over 6 billion smartphones were shipped globally by 2023. Moreover, with 5G networks gaining widespread adoption, it is anticipated that more smartphone manufacturers will integrate multi-mode 5G modems into their flagship phones which heavily rely on data converters to support various frequency bands. Apart from communication, data converters also play a vital role in enabling key technologies such as biometric authentication, augmented/virtual reality, machine vision and advanced image processing capabilities in consumer devices. With technology breakthroughs advancing the features and capabilities of consumer electronics, the demand for high speed and power efficient data converters from the industry will increase in the near future. 

Market Concentration and Competitive Landscape

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Market Drivers: Increasing Demand from Automotive and Industrial Sectors

The automotive and industrial sectors have strong influence on the growth of the overall data converters market due to the proliferation of advanced technology solutions. In the automotive sector, the role of data converters is expanding beyond traditional usage in engine and transmission control systems. With the rapid adoption of electric and autonomous vehicles, data converters are becoming increasingly important for enabling various ADAS (Advanced Driver Assistance Systems) features, battery management, infotainment systems as well as vehicle-to-everything (V2X) communication systems. Moreover, the requirements for higher operating frequencies and precision in automotive data converters are becoming more stringent to support advanced safety and driver assistance functions.

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Market Challenge: High cost of manufacturing

Data processing requirements are growing exponentially due to the rapid development of technologies like IoT, 5G, and AI. However, converter chips are finding it hard to keep up with the escalating demand for faster data transfer speeds. Converter designs must also reduce power consumption without compromising performance to support emerging applications. Further, geopolitical tensions have disrupted global supply chains, creating uncertainties in raw material procurement. Standards and compatibility issues pose additional technical hurdles as the market transitions to new protocols and architectures.

Market Opportunity: Emergence of IoT applications

The proliferation of connected devices and networks of sensors requires more analog-to-digital interfaces. Emerging domains such as autonomous vehicles and augmented reality are expected to massively increase the usage of data converters. Expanding into product segments like industrial automation, consumer electronics and mobile devices can boost revenues.

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Among type, analog to digital converter segment is estimated to contribute  of market share owing 55.2% in 2024 due to growing needs for effective data conversion across different industry verticals. Analog to digital converters play a vital role in digitizing analog signals obtained from various sensors, instruments and devices used widely in many sectors. With growing adoption of digital technologies, there is a rising demand to convert continuous physical parameters into discrete digital values for efficient processing, storage and transmission of data.

Many manufacturing industries rely on analog signals generated from machines, tools and equipment on production lines, thus,  converting these into digital form allows real-time monitoring and analyzing of equipment performance. This helps optimize processes and ensure quality. Analog to digital converters are used in automotive manufacturing, oil and gas exploration, manufacturing of electronic goods and several other process industries.

Even consumer devices like digital cameras, smartphones and wearables use analog to digital converters to change light intensity, sound, pressure and other continuous physical inputs into readable digital formats. Advancements in IoT and connectivity have boosted the need for widespread data conversion capabilities. Asset tracking systems, smart home automation solutions and connected vehicles collect analog data from various sensors and require robust analog to digital conversion solutions.

With the ongoing proliferation of big data analytics across all sectors, the demand for capturing and digitizing various analog metrics is surging exponentially. This robust growth in data-driven applications can drive the analog to digital converter segment growth . Ongoing technological evolution and new product launches catering to diverse industry needs would further strengthen the product type's market dominance going forward.

Insights, By Application: Communications segment contributes the highest share in data converters market owing to increased connectivity across various communication channels

Among application, communications segment is estimated to hold the highest market share owing 29.5% in 2024 due to fast growth of next-gen connectivity technologies. Rapid deployment of advanced wireless infrastructure like 5G networks requires high-speed digital signal processing and data transmission capabilities. This amplifies the need for robust data conversion solutions that can handle complex modulation/demodulation operations with minimal errors and latency.

The widespread adoption of cloud computing and edge computing architectures place immense importance on efficient data transfer and real-time analytics. This spikes the demand for data converters from applications related to internet of things (IoT), machine to machine communication, networking equipment and other connectivity solutions. Advancements in optical communication systems also propel the uptake of high-performance digital to analog and analog to digital converters within long-haul networking, submarine cables and fiber roll-outs.

Surging consumption of bandwidth for streaming HD/UHD content, cloud gaming, video conferencing and various OTT platforms adds to the pre-existing pressure on global telecom networks. Catering to such exponentially growing data traffic warrants novel data conversion ICs and ASSPs with faster processing speeds, higher precision and lower power specifications. All these factors contribute to communications segment growth in the market. 

Regional Insights

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North America has established itself as the dominant region in the data converters market owing 41.2% in 2024. With the presence of major industry players like Analog Devices, Texas Instruments and Microchip, the region enjoys strong manufacturing and technological capabilities in this field. The U.S. accounts for the largest market share owing to a thriving semiconductor industry and massive domestic demand for electronics using data converters. Furthermore, spending on research and development is higher here than any other region, allowing for continuous innovation.

While import dependency for raw materials is significant, North America enjoys a clear trade surplus due to heavy exports of end products with integrated data converters. Companies leverage their R&D edge to steadily launch new and upgraded products catering to changing demands. Standards set by these firms also help establish the region's protocols as de facto global standards. Support from government initiatives on advanced electronics also drive the market growth. Superior resources, infrastructure and skilled workforce have enabled North America to establish first-mover advantage and its market dominance looks set to continue.

The Asia Pacific region has emerged as the fastest growing market for data converters globally. Countries like China, Japan, South Korea and India have ramped up electronics manufacturing exponentially to become a vital export hub. The region accounts for the lion's share of global semiconductor production as significant investments flow into fab units every year. This expansion in IC fabrication directly translates to higher demand for data converters.

Moreover, the massive consumer market in Asia Pacific necessitates rapid growth of electronics production to meet rising domestic needs. Unlike developed economies where growth is incremental, developing Asian countries still have tremendous headroom for penetration of technologies using data converters. This presents sizable opportunities, propelling the Asia Pacific region to become the new frontier of the data converters market.

Market Report Scope

Key Developments

• In September 2022, MaxLinear Inc. and RFHIC announced that both companies are working together to make a 400MHz Power Amplifier (PA) for 5G Macrocell Radios. These companies will use MaxLinear's MaxLIN Digital Predistortion (DPD) and Crest Factor Reduction (CFR) technologies to make RFHIC's newest ID-400W series GaN RF Transistors work even better.
• In May 2022, Analog Devices Inc. introduced a new range of very accurate ADCs (Analog-to-Digital Converters) to make it easier to design instruments, industrial equipment, and healthcare devices. These ADCs use special Easy Drive technology and a flexible SPI interface called Flexi-SPI, which solve design problems and work well with other products.
• In March 2022, STMicroelectronics unveiled a new series of circuits (ICs) that can handle radiation and are affordable, packaged in plastic. These circuits are important for low-Earth orbit satellites. The first products in this series include a data converter, voltage regulator, LVDS transceiver, line driver, and five logic gates, which are already available. These are used in power systems, computers, telemetry, and transceivers on satellites.
• In March 2022, ROHM launched the BD34352EKV D/A converter IC (DAC chip) and the BD34352EKV-EVK-001 evaluation board. These help high-fidelity audio equipment play high-quality sound sources. The DAC chip is a key part of audio equipment, converting digital audio data into analog signals efficiently.

*Definition: The data converters market comprises of components that converts signals from one physical form to another. Data converters allow communication between analog and digital devices in several applications including industrial, automotive, consumer electronics, telecommunications and more. Key products in this market include analog-to-digital converters (ADCs) and digital-to-analog converters (DACs) which find widespread use in converting sensor data, audio/video signals, telecom and networking signals from analog to digital and vice-versa.

Market Segmentation

• Type Insights (Revenue, US$ BN, 2019 - 2031)
  • Analog to Digital Converter
  • Digital to Analog Converter
•  Application Insights (Revenue, US$ BN, 2019 - 2031)
  • Communications
  • Automotive
  • Consumer Electronics
  • Industrial Process Control and Automation
  • Medical
  • Testing and Measurement
  • Others
• Regional Insights (Revenue, US$ BN, 2019 - 2031)
  • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East & Africa
    • GCC Countries
    • South Africa
    • Rest of Middle East & Africa
• Key Players
  • Analog Devices, Inc.
  • Caelus Technology
  • Digikey
  • GlobalSpec
  • Infineon Technologies AG
  • Microchip Technology Inc.
  • Omni Design
  • Renesas
  • ROHM CO., LTD.
  • STMicroelectronics
  • Synopsis
  • Teledyne Technologies Incorporated
  • Texas Instruments
  • Faraday Technology Corporation
  • Asahi Kasei Microdevices
  • Cirrus Logic