The global semiconductors market was valued at US$ 330 billion in 2016 is projected to surpass US$ 395 billion by 2024 with a CAGR of 2%. Significant growth opportunities offered by industrial and automotive segments, tremendous growth potential in BRIC nations and increasing focus on technological advancements in U.S. and China are expected to favor growth of the semiconductors market. In addition to industrial and automotive segments, the semiconductor market can be broadly classified into data processing, communications, and consumer electronics. On the basis of components, the industry can be further segmented into memories, MPUs & MCUs, logic, analogue ICs, discrete semiconductors, optical semiconductors, and sensors and actuators.
The semiconductors market is characterized by advancements and adoption of innovative business models in several industrial processes to improve speed, optimize size and provide enhanced functionality of certain applications. Major applications of semiconductors include designing, packaging technologies, assembly and testing.
Packaging Technologies Overview
Since 1965, the semiconductor packaging technology has expanded into several types of semiconductor packaging methodologies. The industry has witnessed several transformative technologies from dual In-line packaging in 1970, to the current 3D packaging technology. Features of 2.5D and 3D technologies include 30-40% more compactness, 2x to 3x faster speeds, increased scalability, and design flexibility at minimal costs.
Intel, Samsung, and TSMC increasing their 10nm finFET production ahead of the projected increase in demand. TSMC plans to produce 7nm finFET. Industry players such as TSMC, GlobalFoundries, Intel, and Samsung are investing in R&D activities for introducing technologies beyond 5nm in downsizing the chip sizes. The scalable and processing efficiencies offered by these products is expected to facilitate their demand. However, with growing miniaturization, cost associated with SoC designing is expected to witness considerable surge. Our analysis shows that the SoC designing at 5nm will cost over US$ 500 million which in turn, is projected to result in a shift in consumer preference towards alternative packaging technologies such as 7nm, 10nm, and 28nm.
Fabless manufacturing defines the business model that involves designing and sale of semiconductor chips and hardware devices, while outsourcing fabrication of the components. Labor intensive assembly tasks of the chips were mostly outsourced since the 1960s. Texas Instruments, Analog Devices, and Intel were among the few early adopters of outsourcing fabrication operations, and to overcome challenges that included weak infrastructure, growing production demand, and long supply lines. Fabless business models have helped market players gain an average annual EBITDA of around 15%. Outsourcing of fabricating operations has helped in achieving exceptional product qualities through specialist process operations. For instance, semiconductor fabrication operations are outsourced to foundries. TSMC, UMC, GlobalFoundries, Samsung, SMIC, Powerchip, TowerJazz, Vanguard International, and Fujitsu Semiconductor accounted for around 90% of the total semiconductor foundry market share in 2014.
Semiconductor processing technology is rapidly shifting to larger wafer fabrication that involves higher capital expenditure and operational costs for testing and assembling. Thus, industry participants are expected to remain inclined towards fabless manufacturing and focus on their fundamental capabilities, and outsource third party expertise for packaging, testing, and assembling of semiconductor devices.
Brazil, Russia, India, and China are projected to be key markets for semiconductors. In the last few years, the average number of semiconductors used per vehicles has increased owing to usage in safety systems, drivetrain technologies, telematics, ADAS, and hybrid and electric cars. Freescale Semiconductor, Infineon, STMicroelectronics, Texas Instruments, Renesas and Cypress are among the major players in the automotive semiconductor business domain.
Trends such as connected cars and autonomous driving or driverless cars have garnered interests of the automotive brands such as Volvo, BMW, Daimler, and GM. This is expected to generate huge investments in the semiconductor industry owing to the utilization of semiconductors in all the components including actuators, sensors to communication and infotainment devices. Moreover, growing energy demand, increasing inclination towards harnessing renewable sources, proliferation of high speed rail transportation, rampant penetration of electronic devices and smart grids will generate huge industrial application demands for semiconductors. According to our analysis, the focus on enhancing capacities of data storage has increased in the past few years owing to the requirements to tackle network congestions, privacy, power reliability, and enable secure access from any place across the globe. Moreover, data processing and communication market will also drive strong sales owing to increased usage of phablets, laptops and desktops across the globe.
China has emerged as the single largest manufacturer and consumer of semiconductor electronics over the last decade, and is expected to continue its dominance over the forecast period. According to Semiconductor Industry Association (SIA), annual sales in China increased by 14% in 2016. U.S. semiconductor market is expected to remain the designing and skill intensive process development hub for the industry. Advent of V2V communication and cloud mobility solutions in the region are expected to provide considerable growth prospects over the next few years.
Key players operating in the semiconductor industry are Intel, Samsung, TSMC, Broadcom, Qualcomm, SK Hynix, Micron, TI, Toshiba, and NXP. The industry has witnessed consistent disintegration in order to maintain constant focus on specialized businesses skills. However, there have been some instances of reintegration of these specialized business skills by major technology players. For instance, in October 2016, Qualcomm Inc. announced its acquisition of NXP Semiconductors for over US$ 47 billion. The strategy was to diversify Qualcomm business through the acquisition.
R&D activities in the semiconductor industry over the past few years are expected to continue over next few years. However, increasing capital investments to cope with the miniaturization are likely to present a significant challenge for players operating in the industry.
Market Insights - Global Chipless RFID Market Market Overview A chipless RFID is a type of RFID tag that does not use microchip transponder, instead it uses ra... Read more
Market Insights - Global Analog IC Market Market Overview An analog circuit perform single processing on time varying signals with a range of levels in either ... Read more
Market Insights - Global Thermal Printing Market Market Overview Thermal printing is a digital printing process, which is used to produce a printed image by se... Read more
Global Metamaterials Market - Insights Metamaterials are type of composite material structures, which contain exceptional material properties such as acoustic, electrical, magnetic, and optical properties. &n... Read more
Global Photodiode Sensor Market - Insights Global photodiode sensors market is expected to witness significant growth during the forecast period of 2019–2027. The market growth is majorly attributed to ... Read more
Global High Voltage Equipment Market - Insights High voltage equipment market study analyzes switchgear, switches, surge arrester, battery sets, disconnector, circuit breaker, insulator, capacitor & filte... Read more
Global Semiconductor Equipment Market - Insights Semiconductor equipment are the electronic components that utilize the electronic properties of semiconductor materials, such as silicon, germanium, organic se... Read more
Global Varactor Diode Market – Insights A varactor diode is a P-N junction diode that changes its capacitance and series resistance when the bias applied to the diode is varied. Varactor diodes has wide... Read more
Epitaxial Wafer Market Epitaxial Wafer, also known as Epi-wafer is placed over other silicon wafer through epitaxial process. Epitaxy is a process in which a monocrystalline silicon layer is deposited over th... Read more
Global Submarine Battery Market - Insights A submarine is a watercraft, which is used for various commercial and military applications. In submarines, a battery plays a major role in smooth running of the sub... Read more
Global Grid Connected Battery Market - Insights An electrical grid is a network, which delivers electricity for electricity production plant to consumer. The battery storage provides flexibility for end user application such as solar ... Read more
Emergency Lighting Battery Market Emergency lights are battery operated lighting devices that can automatically light emergency exit signs during power outage, in order to maintain continuous operation of the... Read more
Global Electronic Nose Market An electronic nose is a device used for sensing smell, odors, and fragrance of the surrounding. This device consists of electronic sensing, which is used for comparison, identifi... Read more
Global GaN Power Device Market - Insights Gallium nitride (GaN) is used in production of semiconductor power devices and Radio-Frequency (RF) components and light emitting diodes (LEDs). GaN powered devices h... Read more
Biometric Sensors Market: Providing Continuous Secure Monitoring Biometric sensor is a transducer that converts a biometric treat like voice, fingerprint, face, iris of an individual ... Read more
Terahertz Components and Systems Market: Providing Continuous Process Management and Quality Control The terahertz regime is compressed between infrared and microwaves, bridging the g... Read more
Printed Electronics Market: Providing Continuous Flexibility and Fabrication of Electronic Devices Printed electronics is a set of printing techniques applied to produce electrical dev... Read more
Chemical Sensor Market - Insights The global chemical sensor market was valued at US$ 18,361.2 Mn in 2018 and is expected to reach US$ 32,277.8 Mn in 2027, exhibiting a CAGR of 6.6% over the forecast period (... Read more