Market Trends of Global Semiconductor Device Industry
This section covers the major market trends shaping the Semiconductor Device Market according to our research experts:
Integrated Circuit to Hold Significant Share
- The rising proliferation of smartphones, feature phones, and tablets is driving the market. Analog ICs are used in a wide range of applications, including third and fourth-generation (3G/4G) radio base stations and portable device batteries. RFICs (radio frequency ICs) are analog circuits that usually run in the frequency range of 3 kHz to 2.4 GHz (3,000 hertz to 2.4 billion hertz) circuits that would work at about 1 THz (1 trillion hertz). They are widely used in cell phones and wireless devices. As they are under development, the analog IC market in this segment is expected to grow.
- In the overall IC market, logic ICs are the widely adopted component and are expected to witness significant growth over the forecast period. Logic chips have a wide range of applications in almost every digital product ranging from smartphones to arithmetic-logic units (ALU). In recent years, the growth in the automotive and smartphone industry has mainly driven the growth of the logic semiconductor component. However, the growth in applications like HPC and AI is now expanding the scope of logic components.
- The market has different types of memory, such as DRAM, SRAM, Nor Flash, NAND Flash, ROM, and EPROM, among others. Semiconductor memory refers to various electronic data storage devices that find applications as computer memory in computers (PCs, laptops), consumer devices (cameras, phones), commercial IT applications (telecom, datacenters), traditional industrial applications, and the emerging spectrum of IoT applications. The increasing adoption of memory ICs in automobile electronics and the growing application of memory storage chips in electronic devices are the major factors driving the demand for DRAM products.
- The increasing demand for data centers is also boosting the demand for memory components. Currently, large data center projects in North America have contributed to the strong demand for memory, such as DRAM. However, according to the measure of data center space per user, China's internet data centers are poised to grow to at least 22 times that of the United States, or at least ten times the current space of Japan. Hence, DRAM has a significant opportunity for growth and thus is impacting the semiconductor industry.
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Automotive Sector to hold a Significant Market Share
- Semiconductor chips have become an integral part of modern-day vehicles, owing to their widespread use in various functions of vehicles. Chips used in cars can take many forms ranging from single components containing a single transistor to intricate integrated circuits controlling a complex system. For instance, chips are found in the LED light elements of vehicles. Every single diode inside an LED light unit is a chip that emits light. LED headlights alone account for a vast number of chips in modern-day cars. The headlights also need control units to make them function.
- The growing need for better safety and advanced driver assistance systems (ADAS) in cars has accelerated the demand for semiconductors. Intelligent functions, like backup cameras, adaptive cruise control, blind-spot detection, lane change assist, airbag deployment, and emergency braking systems, are made possible through semiconductor technologies. Further, ADAS covers a broad array of sensors, including image and camera sensors for vision-based features, ultrasonic sensors for short-range features like parking assist, and radar and lidar sensors for object detection under dark or foggy conditions.
- In March 2022, Renesas Electronics Corporation, a supplier of advanced semiconductor solutions, announced the expansion of its collaboration with Honda in the field of ADAS. Previously, Honda adopted Renesas' R-Car automotive system on a chip (SoC) and RH850 automotive MCU for its Honda SENSING Elite system featured in the Legend. With the expansion of the partnership, Honda will use R-Car and RH850 in the Honda SENSING 360 omnidirectional safety and driver assistance system.
- The increasing demand for electric vehicles is expected to open new growth opportunities for the studied market. An increased number of electronic devices and sensors are used in electric vehicles, driving the demand for semiconductor chips. For instance, according to the International Energy Agency (IEA), the number of battery electric vehicles (BEV) in use has increased from 1.2 million in 2016 to 11.3 million in 2021 globally.
- Furthermore, China was the leading producer of electric vehicles in 2021 (Source: IEA). Sales in the European region also showed continued robust growth (up 65% to 2.3 million) after the 2020 boom, which also increased in the United States after two years of decline. With EV sales expected to follow a similar growth pattern, the automotive industry is expected to significantly impact the growth of the studied market during the forecast period.
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