Market Insights - Global Analog IC Market
An analog circuit perform single processing on time varying signals with a range of levels in either voltage, charge or current. Analog ICs take any inputs and produce outputs of any level. For instance, audio amplifier is an analog IC, wherein it takes analog input and produces an analog output, i.e. it takes sound and produces louder sound. Analog ICs are different from discrete analog circuits in that it is fully integrated onto a single monolithic piece of silicon, where selecting individual element is impossible. The analog IC designers work within the constraints of circuit elements, their range of values and their tolerances that the process technology allows. Although most of the modern devices are digital, they operate with constantly varying analog inputs such as heat, light, and sound, which needs to be in digital signals and zeros of processing.
The global analog IC market is estimated to account for US$ 57,482.0 Mn in terms of value by the end of 2019.
Market Dynamics- Drivers
- Growing demand for advanced consumer electronics products is expected to drive growth of the global analog IC market during the forecast period
Consumer electronics such as Blu-ray players, tablets, smartphones, LCD TVs have witnessed significant demand in the recent past. These products also include ultra 4K HD TVs, wearable fitness trackers and smart watches, smart smoke and CO2 detectors, thermostats, IP/Wi-Fi cameras, smart switches, smart locks, dimmers, and more are expected to witness lucrative growth during the forecast period. Moreover, many of aforementioned devices have sensors and these sensors interface to the real world and thus, analog processing is required for analog to digital conversion. These functions are combined with digital for a solution, which is cost-effective, consumes less power, and is more reliable. Hence, these factors are expected to boost the global analog IC market growth over the forecast period.
- Increasing use of safety systems in the automobile industry is expected to propel the global analog IC market growth over the forecast period
Penetration of semiconductor devices in automotive systems, owing to increased use of electronics in fuel efficiency, safety, emission reduction, navigation, and entertainment systems is boosting the demand for analog ICs. Furthermore, systems offering partial or complete automation, leading fully autonomous vehicles are enhancing total IC content per automobile. The computational load of next-generation advanced driver assistance systems (ADAS) increases rapidly during the process of widening the sensing range, enhancing detection precision, and implementing accurate algorithms for prompt and effective responses to different driving conditions. Hence, increasing demand for driverless and smart cars is expected to boost the demand for advanced sensors in the near future. This, in turn, is expected to support the global analog IC market in the near future.
Asia Pacific region dominated the global analog IC market in 2018, accounting for 45.9% share in terms of volume, followed by North America, Europe, Latin America, and Middle East & Africa, respectively.
Source: Coherent Market Insights
Market Dynamics- Restraints
- Presence of counterfeit semiconductor components in the market is expected to restrain growth of the global analog IC market over the forecast period
Presence of bogus semiconductor is creating major risks to global semiconductor suppliers, public health and safety, civilian, and military infrastructure. This is a prevalent problem around the world, despite having stringent laws regarding intellectual property rights. These counterfeit semiconductors are of low quality hence they prematurely fail or do not function as expected. These semiconductors, if assembled into navigational, detection, testing or monitoring electronics, and similar products, can lead to catastrophic failures in applications. According to the Semiconductor Industry Association (SIA), counterfeit semiconductor components cost the U.S. semiconductor industry an estimated US$ 7.5 billion in losses each year.
- Complex designing of analog integrated circuits is expected to hinder the global analog IC market growth during the forecast period
Designing the analog IC is a major challenge for key manufacturers demand for various types of analog ICs is unpredictable due to advent of various technological advancements and innovations in devices. Thus, key players are continuously innovating novel products, in order to sustain in the highly competitive market. Moreover, managing the quality of the product while upgrading analog ICs in a cost-effective way is another challenge for market players. Offering feature-rich devices that incorporate analog ICs involves high hidden costs, which need to be borne by manufacturers. Hence, these factors are expected to hamper the market growth in the near future.
- Offering cost-effective semiconductors with advanced features is expected to pose lucrative growth opportunity
Key players can expand their revenue generation and market presence by offering semiconductors at economical price. Generally, counterfeit semiconductors are available at low prices though they often do not perform or prematurely fail. Major manufacturers can offer high-quality products at economical price as it can eliminate if not minimize threat of bogus semiconductors and help them enhance their market presence.
- Mergers and acquisitions among key players can offer lucrative growth opportunity in the near future
Various manufacturers in the market are focused on mergers and acquisitions strategies, in order to leverage business opportunities. For instance, in December 2016, Analog Devices, Inc. announced plans to fully acquire Linear Technology Corporation by the end of the second fiscal quarter of 2017. The company has completed all necessary long-term debt financing arrangements for the acquisition of Linear Technology Corporation. Furthermore, in December 2015, NXP Semiconductors N.V. merged with Freescale Semiconductor, Ltd., in order leverage emerging opportunities in the field of connectivity, processing, and security. This merger would strengthen NXP’s market position globally, listing it among the top automotive electronics maker in the world.
Global application specific IC market was valued at US$ 16,250.0 Mn market in 2018 and is forecasted to reach a value of US$ 61,348.0 Mn by 2027 at a CAGR of 7.4% between 2017 and 2027.
- Slow global economic growth has hindered growth of semiconductor industry
Growth of the global semiconductor market is closely related to global economic circumstances. Hence, there cannot be strong semiconductor market growth without robust economic growth around the world. In the recent past, local economies have slowed down in many areas of the world significantly. According to Coherent Market Insight’s analysis, China, a leader in consumer electronics such as personal computers, smartphones, digital TVs and aircrafts and automobiles lost its economic momentum in 2016. Moreover, worldwide economy is expected to witness a negative impact due to Brexit vote in the near future. However, presently, since the U.K. is unlikely to officially be able to leave the European Union (EU) for a few more years, the major negative effect on economic growth is the uncertainty of the entire situation.
- Advancements in technology to develop novel products is expected to boost the demand for analog IC in the near future
Key companies in the market are focused on research and development activities, in order to innovate novel products and cater to growing demand. For instance, in September 2016, Texas Instruments Inc. launched ultra-low-power dual-band wireless microcontroller, which supports Sub-1 GHz and Bluetooth low energy connectivity on a single chip. The microcontroller helps developers to change from a three-chip solution to a tiny single chip, while reducing design complexity, saving power, cost, and board space. Furthermore, in April 2016, Technologies A.G.’s chips – OPTIGA TPM was selected to be deployed in Lenovo’s ThinkPad notebooks, in response to the security risks associated with connectivity and networking and to enable better protection against hacker attacks.
In Global analog IC market, by application segment, the consumer electronics sub-segment dominated the global market in 2018, accounting for 35.4% share in terms of value, followed by communication, automotive, industrial, medical & healthcare, and others, respectively.
Source: Coherent Market Insights
Value Chain Analysis
Key players operating in the global analog IC market are Texas Instruments Incorporated, Renesas Corporation, Infineon Technologies AG, Qualcomm Technologies, Inc., NXP Semiconductors, ON Semiconductor, STMicroelectronics, Skyworks Solutions, Inc., Analog Devices, Inc., and Maxim Integrated Products Inc.
- Key players in the market are focused on product launch, in order to expand their product portfolio. For instance, in January 2017, Texas Instruments Inc. introduced two devices CC2640 Launchpad and CC2640R2F wireless microcontrollers, which are under its SimpleLink Bluetooth low energy wireless microcontroller portfolio.
- Major market players are involved in partnerships and collaborations, in order to enhance their market presence. For instance, in January 2017, ON Semiconductor Corporation collaborated with Hexius Semiconductor, a U.S.-based mixed-signal IC designing company, in order to enhance its analog functionality for next generation mixed signal ASICs. This would enable the company to reduce design cycle and time-to-market.