Europe Logic Integrated Circuit (IC) Market Size

Europe Logic Integrated Circuit (IC) Market Analysis

Europe Logic Integrated Circuit (IC) Market was valued at USD 12.10 billion during previous year and is expected to reach USD 17.89 billion over the forecasted period, registering a CAGR of 5.04%. The demand for electronic components with Logic integrated circuits is anticipated to fuel market growth in the region due to the rising use of digital products in consumer, industrial, telecom, and automotive applications.

Logic semiconductors typically process digital data to regulate electronic systems' operation. Every digital product, including ALUs and phones, now includes logic chips as a crucial design part. Many industries, including automotive, consumer electronics, data processing, networking, and communications, rely heavily on logic semiconductors.

The expansion of the logic semiconductor component in recent years has been primarily fueled by the expansion of the region's automotive and smartphone industries. However, it is anticipated that developing applications like HPC and AI will broaden the range of logic components, driving the market and meeting their demand in several industrial applications.

Moreover, One of the key factors propelling the logic semiconductor market is the rise in the use of logic semiconductors for broadband-enabled devices and applications. The EU announced a new consultation in February 2023 to provide gigabit internet connectivity to all residents and businesses throughout its member states by 2030 and become the most connected continent by that time. Such initiatives are anticipated to drive the market.

The market is also impacted by the rise in demand for various industrial products, such as electric vehicles (EV), medical devices, telecom communication devices, and semiconductor production equipment. Additionally, the logic IC market in the region is positively impacted by rapid urbanization, a shift in lifestyle, an increase in investments in semiconductor production, and higher consumer spending.

Additionally, the EU Chips Act will enable governments and private businesses to collaborate to strengthen Europe's semiconductor industry position significantly. This extensive program will strengthen R&D innovation in Europe and bring cutting-edge manufacturing to the area, both will benefit the market's anticipated rapid growth.

For instance, Intel revealed its plans to invest EUR 80 billion in the European Union over the following ten years along the semiconductor value chain, from research and development (R&D) to manufacturing to cutting-edge packaging technologies, in March 2022. This investment is the first phase of the company's plans. With this historic investment, Intel hopes to bring its most cutting-edge technology to Europe, develop a new chip ecosystem, and address the demand for a more stable and balanced supply chain. Such investments are anticipated to increase demand for the production of logic integrated circuits, which fills a need in numerous industries.

The EU is working to decrease its reliance on importing semiconductors from Asia, just like the rest of the world. In order to lure chipmakers to Europe, the European Chips Act's subsidies totaling EUR 43 billion (USD 44.8 billion) were approved earlier in 2022. The EU has set the challenging goal of doubling its share of the global chip market by 2030 in an effort to establish itself as a worldwide leader in semiconductor manufacturing. Such initiatives are likely fueling the local market.

Additionally, the manufacturing sectors' adoption of emerging technologies like IoT, AI, and automation is anticipated to accelerate market expansion. Manufacturing is the catalyst that drives the European economy. Europe is the world's top exporter of manufactured goods, accounting for 83% of global exports and 17.3% of global GDP, according to the European Factories of the Future Research Association (EFFRA). For the makers of logic integrated circuits (ICs) in the area, such manufacturing capabilities are anticipated to present significant opportunities.

The logic semiconductor market is anticipated to face challenges in the coming years due to several issues with the sizes of related components in these semiconductors, which could lead to poor performance and a decline in sales of consumer electronics. For instance, gfu companies report that consumer electronics sales in Germany fell by 1.5% in 2022 to EUR 30.7 billion from EUR 31.2 billion.

Due to the strict lockdowns, COVID-19 had a negative effect on the market for logic semiconductors. The uncertain economy impacted the demand for logic semiconductors, a partial business shutdown, and low consumer confidence. During the pandemic, the supply chain was hampered along with logistics operations. Despite this, the market for logic semiconductors is anticipated to pick up steam in the post-pandemic environment due to the relaxation of restrictions, adoption of Industry 4.0, and expansion of European manufacturing capabilities with regard to automation technologies.