Market Trends of APAC Semiconductor Device Industry In Communication Industry
Wireless Communication Technology is Expected to Drive the Market Growth
Semiconductors for wireless communications include cellular baseband processors, Bluetooth transceivers, mobile Wi-Fi chips, global positioning system (GPS) receivers, and near-field communication chips.
The Asia-Pacific market is expected to witness significant growth in wireless connectivity systems. For instance, according to the U.S.-China Economic and Security Review Commission, government investment in smart city initiatives in China would achieve USD 38.92 billion in the current year. The development of smart infrastructure is anticipated to open unique avenues for wireless connectivity techniques.
Additionally, the expansion of 5G networks in the region is predicted to be one of the significant factors driving the market growth. According to the GSMA's latest report, 5G is anticipated to contribute about USD 960bn to the designed economies of East Asia and the Pacific by 2030. 5G is predicted to be a significant driving force in automatic smart factory deployments in the region.
According to GSMA, the adoption rate of smartphones in the region is projected to increase to 84% by 2025. In addition, it is anticipated that 62% of mobile subscribers will be present in the same year. Encouragingly, the smartphone adoption rate for this region is expected to be 20% between 2019 to 2025.
Further, wireless technology advancement saturates many areas of lives and continues to expand. For example, individuals expect instant access to maps on mobile devices and in-flight Wi-Fi during travel. In the medical field, "digital plasters" monitor and transmit patient vital signs. Wireless sensors are even being used to monitor carbon transfer in the Costa Rican rainforest. The multiple familiar wireless application is the mobile phone, where smartphones drive market growth. For instance, in February 2022, Verizon announced the expansion of its Internet service by allowing it to access reliable, fast plug-and-play wireless Internet services around the country, covering over 30mn homes and more than 2mn businesses.
The Apple A16 Bionic, a 64-bit ARM-based SoC that first appeared in the iPhone 14Pro, launched on September 2022. The A16 has 16bn transistors and is built on TSMC's N4 fabrication procedure, being touted by Apple as a smartphone's first 4 nm processor.
China to Experience Significant Market Growth
China has a significant population in the world and is one of the topmost technologically developed countries globally. China's rapid technological advancements are directing the demand for innovative IT devices. China leads the pack in various areas, such as artificial intelligence (AI), telephone device making, 5G telecommunication networks, and many others. According to China Telecom, in 2022, China Telecom generated a revenue of around CNY 475 billion, a significant increase from CNY 440 billion in the previous year.
The country is investing significantly in the studied market growth. It is anticipated that 5G will gradually alter how people use their phones. It has also emerged as a prominent participant in the smartphone sector. Across the country, the demand and shipments of 5G-capable smartphones have drastically increased during the last few quarters.
According to MIIT, the number of 5G base stations in China amounted to 2.31 million by the end of 2022. The country is rapidly expanding its 5G infrastructure. According to forecasts, 5G base stations were projected to achieve over six million by 2024. Huawei was the significant company in this industry, followed by ZTE.
In addition, according to GSMA, 5G connections in the country are expected to reach 460 million by 2025, making up 28% of all national connections. The Chinese market was expected to surpass the combined size of commercial 5G services in Australia, South Korea, the United States, and the UK, with a predicted average yearly growth rate of 63%. Such 5G deployment in the country may further drive the studied market growth.
Increasing investments in data centers in the country may further drive the studied market growth. For instance, in February 2023, CapitaLand Investment Limited announced it had established CapitaLand China Data Centre Partners (CDCP), creating two hyperscale data centers in Greater Beijing. The two development projects are expected to be completed in 2025 and deliver more than 100MW. In addition, in February 2022, China approved ten national-data center groups for greater computing power nationwide.
Furthermore, in April 2023, China's southern Guangdong province intends to launch a second phase of a semiconductor fund with a scale of USD 4.37 billion. The fund will have a duration of 17 years and will invest in auto chips and equipment for semiconductor fabric. This may further drive the studied market growth in the forecasted period.
