Market Trends of Field Programmable Gate Array (FPGA) Industry
Increasing Demand for IoT is Expected to Drive the Market Growth
- Parallel execution is a crucial benefit of FPGAs, as several sensors, like humidity and temperature detectors, operate constantly. Since no time is required to be spent on looping and pausing for the delay, FPGAs are more power-efficient for IoT. According to the State of the IoT 2022 report, connected IoT devices are increasing by 18% to 14.4 billion globally. By 2025, this number is predicted to be over 30 billion, nearly 4 IoT devices per person on average.
- The demand for IoT is anticipated to increase even further during the forecast period, which signifies a boost in demand for semiconductors and other components. According to SEMI, the size of the semiconductor and sensor needed for IoT devices is expected to reach USD 114.2 billion by 2025.
- With the rapid increase in the number of IoT devices, chip requirement for building IoT instruments is also expected to rise during the forecast period. Reducing energy consumption, combined with the miniaturization of chips, will be prioritized by manufacturers.
- According to Ericsson, short-range IoT-connected devices recorded USD 13,939 million, and wide-area IoT-connected instruments recorded USD 2,696 million in 2022. Further, it is anticipated to reach USD 20,649 million and USD 5,885 million in 2026.
- IoT promises to be a major driving force that would create significant innovation, facilitate new business models, and enhance global society in multiple ways. Market vendors develop FPGAs to integrate them into IoT devices and solutions. For instance, Intel FPGA solutions, such as Intel Stratix 10, allow scalability and flexibility to address IoT requirements with inherent software and hardware programmability.
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Asia Pacific is Expected to Hold Significant Market Share
- The Asia Pacific is a significant region for the players operating in the FPGA industry. Within the Asia Pacific, many nations, including China, India, South Korea, Taiwan, and others, have seen an enormous increase in the consumer electronics industry in the past few years. As a result, the FPGA demand in the area is seen as an influence point.
- According to the Semiconductor Equipment and Material International (SEMI), China is a significant spender on semiconductor equipment, followed by South Korea, Taiwan, and Japan. Furthermore, China is expected to maintain the top position in semiconductor equipment spending this year, while Taiwan is anticipated to regain the lead in 2024. In addition, the Chinese government encouraged its national champions and top digital enterprises to develop their domestic semiconductor manufacturing capacities to rebalance China's reliance on overseas semiconductor demand. Such an initiative may further boost the semiconductor market, propelling the demand for FPGA.
- Furthermore, the stay-at-home trend spurred by the coronavirus pandemic continues to drive the demand for semiconductor chips. For instance, according to WSTS, the estimated semiconductor industry revenue in the Asia Pacific region will reach USD 411.97 billion in 2023. Such trends encourage leading semiconductor manufacturers to enter the Asia Pacific market. For instance, ASML, one of the most prominent players in the market, recently opened a unique state-of-the-art training facility in Tainan.
- Similarly, in November 2022, Advanced Semiconductor Engineering (ASE) announced a USD 300 million investment to expand its production site in Malaysia. Moreover, China's State Council's "National Integrated Circuit Industry Development Guidelines" set the aim of becoming a global player in all semiconductor industry segments by 2030.
- In addition, the Made in China 2025 initiative supports achieving knowledge about advanced semiconductor manufacturing as a critical component of China's future economy and society. In addition, the country recently spent USD 574 billion in the healthcare sector, which may further drive the studied market growth.
- Furthermore, 5G adoption is rising in momentum for both the network and device domains. According to the report, Ericson Mobility 5G subscriptions are predicted to reach 1 b, two years earlier than 4G. Key factors include China's earlier engagement with 5G, compared to 4G, and the timely availability of instruments from several vendors. The Chinese telecom sector experienced rapid evolution in recent years, which is expected to continue until 2025. Increased population, communication services, and smartphone use fuel the industry's development. Premium connectivity and content services in China account for the majority of the market development in the country.
- China is paving the way for the FPGA market to expand. The country's demand is extending due to its significant position as the international manufacturer of consumer electronics gadgets. China is the world's largest manufacturing hub, producing 36% of the world's electronics, including smartphones, computers, cloud servers, and telecom infrastructure, establishing the country as the global electronics supply chain's most important node. The popularity of AI in China opened up a new development potential for the Chinese consumer electronics market. Smart homes and IoT (Internet of Things) will likely be significant development potential for manufacturers of FPGA in the next decade.
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