Semiconductor Market Size, Share, Growth, Report 2024 to 2033

Semiconductor Market Size and Growth 2024 to 2033

The global semiconductor market size was valued at USD 581.79 billion in 2023 and is expected to be worth around USD 1,232.46 billion by 2033, growing at a compound annual growth rate (CAGR) of 7.79% from 2024 to 2033.

Semiconductors are electronic components that are manufactured for a specific purpose in any industrial setting. The applications of semiconductors cover a wide range of industries, that include manufacturing, energy, transportation, automotive, and others. Hence, semiconductors are required for the automation and efficiency of industrial processes, and for the operation of different industrial systems and devices. The semiconductor industry has been steadily changing on a global scale. This development is directly attributable to the growing need for cutting-edge smart devices and associated technological developments.

Semiconductors are now widely used in a wide range of industries, including communications, consumer electronics, automotive, aerospace, defense, and clean energy. Semiconductors have become an essential part of modern technology. Semiconductors are among the world's most traded goods and are the driving force behind digitalization. Any hiccup in the semiconductor supply chain could have a major impact on global trade. Semiconductor companies must develop process maturity and resilience so they can easily move between industries and foster cross-industry collaboration through strategic partnerships.

Report Highlights

• Asia-Pacific region is leading the semiconductor market, accounted revenue share of 51.60% in 2023.
• North America has generated revenue share of around 23.40% in 2023.
• By application, the networking & communications segment has accounted highest revenue share of 34% in 2023.

Semiconductor Market Growth Factors

• Expansion of Manufacturing Technologies: Due to the ongoing reduction in chip size, precise and careful manufacturing technologies are required. This also includes tasks such as creating intricate patterns and applying them at the nanoscale on the chip. Complexity is increased by the use of metals in circuits to shorten wiring delays which helps the chip manufacturers to produce parts quickly and inexpensively through special manufacturing processes.
• Rise of Novel Architectures: The semiconductor industry uses novel architectures because of heavy competition relating to faster processing speeds. Companies are therefore integrating heterogeneous 3D-capable designs, creating non-volatile memory chips, and using nanotechnology to create innovative processor architectures. In addition, much work is being done to optimize processor specifications for parallel information computations. These variations will enable smaller chips with more components on a single silicon wafer.
• Growing 5G Demand: To ensure market performance and easy access, 5G hardware requirements are critical. Companies are therefore developing technologically advanced solutions for providing reliable and latency-free connectivity when it comes to indoor and outdoor networks. Various 5G-focused products mainly include signal boosters and millimeter-wave chipsets. For accommodating more and more connected devices, the manufacturers are also focusing on smaller cell sites, edge computing, and high-frequency spectrums. Such aforementioned factors that are responsible for 5G developments are further improving connectivity and thus boosting the semiconductor manufacturing facilities.
• Growing Demand from the Automotive Sector: The semiconductor market is undergoing many changes, many of which are specifically due to the automotive sector. At present moving towards a sustainable future is being driven by electric vehicles, which essentially rely on semiconductors and are critical in the production of EVs. Leading automakers are investing heavily in electric vehicle research and development as governments around the world have set ambitious goals for electrifying their transportation sectors. Electric vehicles are becoming more and more dependent on semiconductors as their central processing units to operate at maximum efficiency.
• Increasing Demand for IGBT: Among various discrete semiconductors, IGBT has gained prominence and is widely used in low-power converters. The most popular semiconductor switches for power conversion in automobiles, other motor drives, and renewable energy systems are discrete IGBTs. Also, the major driving force is the increasing use of IGBT (Insulated Gate Bipolar Transistor) devices in numerous sectors including automotive, consumer electronics, industrial, IT and communications, healthcare, aerospace and defense, and others.

Semiconductor Market Trends

• IoT Usage is Growing: Certain specifications are to be met by IoT devices, like being small in size, using different options for connectivity, and using less power. The development of sensors and integrated circuits is one of the main focuses of semiconductor manufacturers for meeting the requirements of producing IoT devices. IoT also helps chip manufacturing financially by enabling continuous process and equipment monitoring. Additionally, it makes production operations more visible.
• Increasing the Use of Advanced Materials: Semiconductor startups are aiming for "More than Moore" innovations by utilizing novel materials in addition to reducing feature size. The materials include gallium nitride (GaN) and silicon carbide (SiC). Numerous benefits are provided by the usage of these materials, which include faster switching, smaller form factor, higher operating temperatures, and high dielectric strength. In addition, these substitutes also provide reliable and affordable solutions that are within the constrained parameters of chip size.
• Growing In-House Chip Development: To gain control over supply chains and product roadmaps, companies are shifting the development of chips in-house. Through in-house development, the manufacturers are also able to shorten the development time of the customized chips by using various reusable components that are of flexible architecture. Owing to in-house chip development, the semiconductor market is shifting towards specialized hardware from general-purpose processors.
• Growing Awareness of Sustainable Manufacturing: Manufacturers are concerned regarding emissions across the supply chain and hence try to meet environmental regulations and at the same time maintain the growing demand for semiconductors. To maintain sustainable operations, semiconductor manufacturers are switching towards alternative fuels such as biogas and green hydrogen for production. In addition, the companies are using recycled materials in place of traditional chemicals. Such innovative solutions are leading the way for environmentally friendly semiconductor production.
• AI and Machine Learning in Semiconductor Chip Design: Data-driven machine learning techniques in semiconductor design and manufacturing have been made possible by developments in high-throughput computing and materials databases. Machine learning models are used in both chip design and materials research, accelerating the process of finding new materials for superconducting applications. These digital technologies will eventually become indispensable for semiconductor design and production, driving new types of innovation.

Report Scope

Semiconductor Market Dynamics

Drivers

Increased Government Support

• Government assistance can help the semiconductor market overcome significant obstacles, which will in turn benefit the market. Governments are fostering technological innovation, enhancing the ecosystem, and ensuring a more robust and sustainable industry. Significant government assistance can come in a variety of forms, including financial incentives, research grants, and laws that promote semiconductor manufacturing thereby propelling the expansion of the market.

Growing Demand for Smartphones

• Smartphones account for 55% of global semiconductor demand. This explains the importance of mobile semiconductors and how technological changes have become a key element of competition in the market as they account for one-third of the global semiconductor industry. The mobile phone semiconductor market is experiencing rapid growth, driven by the unstoppable advancement of mobile phone technologies and the global transition to 5G connectivity.

Restraints

High Initial Costs

• Despite the long-term benefits, the high initial cost of semiconductors can be a hindrance to market growth. The prices of the raw materials used in the production of semiconductors, such as silicon chips, wafers, and others, have increased, increasing the price of semiconductors.

Complexities Associated with Technology

• The advanced design processes and manufacturing bring major technological complexities for industry operators. The development of smaller and more powerful chips requires significant investment in R&D, and the process nodes are approaching their physical limits, posing a challenge to the market as the miniaturization processes become more complex.

Opportunities

Policies Related to Subsidies by Major Countries

• Some countries without strong semiconductor ecosystems are actively trying to encourage the growth of such ecosystems within their borders. Subsidies offered today are often higher than in the past and may include new incentives. The European Union and the United States have increased subsidies to semiconductor companies in recent years. For instance, in the United States subsidies have always been addressed by the state and local programs such as property tax or sales tax rebates, but the potential benefits have expanded after the changes in the policy.

Growing R&D

• To spur innovation and maintain an advantage over rivals, the semiconductor industry mainly depends on R&D. Experts with a strong background in R&D contribute to the development of innovative products and technologies. Regardless of yearly sales cycles, American semiconductor companies tend to spend a lot on research and development (R&D). This indicates the significance of R&D investments for semiconductor production, which creates growth opportunities for the market.

Challenges

Silicon Wafer Shortage

• Demand for semiconductors is driven by the growing need for wireless communications, consumer electronics, and energy-efficient and low-power devices in the electronics and automotive industries. In everything from computer chips to car parts, the shortage of silicon - made from the second most abundant element on Earth - is a cause for concern. The shortage of silicon metal can reduce production, and hence prices have increased accordingly, which, along with ROI metrics, is expected to hamper market growth.

Disruption of the Supply Chain

• Since components and raw materials are often sourced from different countries, the semiconductor market relies on a supply chain. Any disruption to production, logistics, or transportation in one area can lead to shortages and delays that affect the entire market. Semiconductor manufacturing requires many key components, including rare metals and cutting-edge materials. Any disruption to the supply of these components can lead to production delays and increased costs.

Semiconductor Market Segmental Analysis

Component Analysis

Logic Devices: Logic devices implement almost every other function the system needs to perform, including device-to-device interfaces, data timing, control and display operations, etc. Logic semiconductors are electronic devices used to control the operation of electronic devices by processing digital data. Small microelectronic circuits, often called logic gates, are often used to build digital circuits and can be easily used to generate combinational logic.

MPU& MCU: The extensive utilization of the MPUs and MCUs in the manufacturing of devices such as desktops, notebooks, PCs, and laptops has significantly contributed to the growth of this segment in the past. The ongoing trend of IoT devices and rising demand for IoT devices is boosting the need for powerful controllers and processors, thereby augmenting the growth of the MPU and MCU.

Power Devices: A power device is a semiconductor device used as a switch or rectifier in power electronics. Such a device is also called a power device or, when used in an integrated circuit, a power IC. Power devices are electronic devices that can be used directly in power processing circuits to convert or control electrical power. The components can perform active functions such as amplification, rectification, and switching and are also known as power semiconductor devices.

ICs: ICs can be referred to as miniaturized electronic circuits that constitute transistors, diodes, capacitors, and resistors integrated into a single semiconductor wafer. There is an increasing demand for ICs as they are utilized for various applications in different industries. Some of the key application areas of ICs include consumer electronics, automotive systems, industrial automation, medical devices, telecommunications, data centers, and several other fields.

Memory Devices: The rising penetration of digitalization and the rapidly growing number of digital businesses. The burgeoning demand for cloud computing and the rising adoption of virtual reality are expected to boost the growth of this segment during the forecast period.

Sensors: A sensor detects an event or a change in a factor and responds with an output. Most sensors work with semiconductors and are therefore called semiconductor sensors. The most common materials used for semiconductors are silicon and other members of Groups III through V. Miniaturized semiconductor-based smart sensors use novel materials and new processes to replace the cumbersome and expensive traditional sensors. The sensors are used in various applications that include optical devices, navigation systems, motion sensors, and health monitors.

Discrete Power Devices: Single-function performing devices such as transistors, diodes, valves, rectifiers, and more are known as discrete power devices. Some of the devices are sold as modular accessories and can be easily integrated into any existing circuits. Some discrete semiconductors are designed to perform a similar function to two different devices connected in a specific configuration. This can save space on a circuit board and access important functions that would otherwise require multiple components by simply equipping a circuit with a single component. These devices are just a single type housed in a single package.

Application Analysis

Networking & Communications

The networking & communications segment has held leading position, accounted revenue share of 34% in 2023. The increased adoption of smartphones and other smart devices across the globe. According to the ITU, around 4 billion people around the globe have access to the Internet, and most of them have access to the Internet through smartphones. This number is further expected to rise and hence it will augment the growth of this segment exponentially in the forthcoming years.

Data Processing

The data processing segment has accounted revenue share of 25% in 2023. Utilizing operands on unprocessed data via a computer or server transforms the data into a different format that can be used. Data processing is the act of applying operations to data to interpret the data as it is, categorize the data, or choose an action and have the processed data cause that action to occur. Data processing at the local, edge, cloud, and data center levels is necessary for automation. Numerous tasks, including data storage, retrieval, computation, and analysis, are part of data processing, and they all mainly rely on silicon chips to be carried out.

Industrial

The industrial segment has accounted revenue share of 8% in 2023. Semiconductors are used in almost all areas and all the products work with semiconductor components such as integrated chips, diodes, and transistors. A variety of products help the semiconductor industry with quality control of the manufacturing process, as well as testing and verifying the operational performance of semiconductor devices and supporting the performance of capital equipment used in the semiconductor manufacturing process.

Consumer Electronics

The consumer electronics segment has generated revenue share of 13% in 2023. The rapid evolution of mobile and computing technologies. Innovations such as high-performance smartphones, laptops, and tablets require advanced semiconductors to manage increased data processing, enhanced graphics, and energy efficiency. The push for thinner, lighter, and faster devices compels semiconductor manufacturers to continually innovate, leading to the development of more sophisticated and compact integrated circuits tailored to these applications.

Automotive

The automotive segment has reported revenue share of 16% in 2023. The automotive segment consists of Infotainment Systems, Advanced Driver Assistance Systems (ADAS), Electric Vehicles (EVs), and Autonomous Vehicles. The automotive segment is a significant and rapidly growing part of the semiconductor market. Semiconductors are essential for a wide range of applications in vehicles, from basic functions to advanced driver-assistance systems (ADAS) and electric vehicles (EVs).

Semiconductor Market Regional Analysis

Why is Asia-Pacific holding the largest share in the semiconductor market?

The Asia-Pacific semiconductor market size was accounted for USD 300.20 billion in 2023 and is estimated to hit around USD 635.95 billion by 2033. The presence of a huge consumer base, rising disposable income, increased demand for industrial processing and consumer electronics, increased urbanization, and rapid industrialization. All these factors have boosted the consumption of semiconductors. Moreover, countries such as China, Taiwan, and South Korea are known for their electronics industries. The growth of this region's market has been largely attributed to rising consumer electronics consumption. Moreover, the main elements anticipated to propel market expansion in the upcoming years are the growing use of IoT devices, artificial intelligence (AI), and virtual reality (VR).

Why is North America hit substantial growth in semiconductor market?

The North America semiconductor market size was estimated at USD 136.14 billion in 2023 and is expected to surpass around USD 288.40 billion by 2033. The growing consumer electronics demand, technological advancements, and heightened R&D efforts by major players in the region are driving the market. The manufacturing sector of the region thrives mainly due to the automotive, aerospace, and industrial sectors. For automation, control systems, and connectivity these industries heavily rely on semiconductors. A surge in the demand for semiconductors in the region is also because of the rising adoption of cloud computing and the need to handle enormous volumes of data in data centers. Further, North America is home to sizable data centers that are in dire need of high-performance computing and storage solutions, which in turn makes North America one of the leading regions in the world in cloud services.

Europe Semiconductor Market Growth

The Europe semiconductor market size was worth USD 93.69 billion in 2023 and is projected to surpass around USD 198.43 billion by 2033. Demand from the automotive industry and investments in the telecommunications sector are driving the growth of the European semiconductor market. To encourage the development of connected technologies, companies across the region are investing heavily in integrating and innovating new technologies with smart processing chipsets. The expansion of manufacturing capacities of players to meet the increasing demand for advanced electronics in countries such as Germany, France, and the UK is also expected to boost the expansion of the European market.

LAMEA semiconductor market is in Evolutionary phase

The LAMEA semiconductor market was valued at USD 51.78 billion in 2023 and is anticipated to reach around USD 109.69 billion by 2033. The LAMEA semiconductor industry is growing due to the growing transition and technological demand shift through investments in technology. In Latin America, the growing demand for industrial electronics and high-end computing devices for the evolving gaming and digital industries is expected to further drive regional growth. An Industry 4.0 revolution in the UAE has raised productivity and advanced manufacturing by 30% leading to the creation of new products. Furthermore, market players in the region are making significant investments in high-quality appliances because of the growing adoption of new technologies and an increasing disposable income.

Semiconductor Market Top Companies

• Intel Corporation
• Samsung Corporation
• NVIDIA Corporation
• Texas Instruments Incorporated
• Broadcom Inc.
• Mediatek Inc.
• Applied Materials Inc.
• Advantest Corporation
• Screen Holdings Co. Ltd
• Teradyne Inc.
• ASML Holding NV
• Tokyo Electron Limited
• KLA Corporation
• BASF SE
• Resonac Holding Corporation
• Kyocera Corporation
• GlobalFoundries Inc.
• Semiconductor Manufacturing International Corporation (SMIC)
• Henkel AG & Co. KGaA
• Sumitomo Chemical Co. Ltd
• Hua Hong Semiconductor Limited
• Powerchip Technology Corporation
• ASE Technology Holding Co.Ltd

Key players in the industry are focusing on strengthening their product offerings with new innovative products with enhanced technology. The latest generation of specially designed chipsets feature WLAN arrangements and are compatible with Wi-Fi routers. Furthermore, the chipsets are optimized with radio frequency performance to amplify high-bandwidth and low-latency applications, including 4K Ultra HD video streaming and augmented reality (AR). The different types of innovations by the major players in the market are bound to influence the offerings and customer experiences. NVIDIA Corporation, a provider of GPU-accelerated computing is dedicated to developing cutting-edge tools and platforms for the semiconductor market such as data centers, professional visualization, and automobiles. One of the major electronics conglomerates Samsung Corporation headquartered in South Korea manufactures a variety of products that comprise consumer electronics, medical devices, semiconductors, and home appliances, is Samsung Corporation. Therefore, major players in the semiconductor market are using strategic thinking and well-considered actions to demonstrate leadership and influence in the rapidly evolving market.

CEO Statements

Sanjay Mehrotra, CEO of Micron:

"This is the perfect timing for India’s semiconductor mission, to develop semiconductor opportunities, because AI will grow, opportunities will increase and I really believe that the best is yet to come."

Kurt Sievers, CEO of NXP Semiconductors:

"Small industrial companies are typically not knowledgeable about electronics and have a great need for solutions. Industrial solutions may also be more sticky than automotive ones because nobody wants to change the design in that market."

Recent Developments

Key players in the semiconductor marketare pivotal in delivering a variety of innovative construction solutions, such as prefabrication techniques, sustainable materials, and advanced digital technologies. Some notable developments in the market include:

• In June 2024, ProAmpac introduced a new recyclable bag for food packaging, demonstrating the company's commitment to sustainability and innovation in packaging solutions. This new product underscores ProAmpac's commitment to reducing environmental impact through advanced, environmentally friendly packaging technologies.
• In February 2024, Samsung Electronics is setting up an advanced packaging factory in Yokohama, Japan. This initiative is supported by the Japanese government and aims to strengthen Samsung's semiconductor manufacturing capabilities.
• In February 2024, Intel introduced its new sustainable system foundry business, Intel Foundry, designed for the AI era. This launch included an expanded process roadmap aimed at maintaining leadership in semiconductor manufacturing.
• In January 2024, TSMC announced plans to expand its advanced packaging capabilities in Japan. This includes building new facilities in partnership with Sony and Toyota, with the total investment expected to exceed $20 billion. These efforts are part of Japan's broader strategy to rejuvenate its semiconductor manufacturing ecosystem.
• In May 2023, Micron Technology, Inc. announced the adoption of extreme ultraviolet (EUV) technology, an advanced patterning technique to manufacture its 1-gamma node DRAM. Given the central role of its Hiroshima fab in advancing the 1-gamma node, Micron was the first semiconductor manufacturer to adopt EUV technology for manufacturing purposes in Japan.

These advancements mark a notable expansion in the semiconductor market, driven by strategic acquisitions and innovative projects. The focus is on boosting sustainability, enhancing construction efficiency, and broadening product offerings to meet diverse building needs.

Market Segmentation

By Type

• Intrinsic Semiconductor
• Extrinsic Semiconductor

By Components

• Logic Devices
• MPU & MCU
• Power Devices
• ICs
• Memory Devices
• Sensors
• Others

By Application

• Data Processing
• Industrial
  
  • Power Controls and Motor Drives
  • Intelligent Systems
  • Industrial automation & others
• Networking & Communications
  
  • Ethernet Controllers
  • Adapters & Switches
  • Routers & Others
• Consumer Electronics
• Automotive
  
  • Telematics & Infotainment
  • Safety Electronics
  • Chassis
  • Powertrain
  • Body Electronics
• Government

By Node Size

• 180nm
• 130nm
• 90nm
• 65nm
• 45/40nm
• 32/28nm
• 22/20nm
• 16/14nm
• 10/7nm
• 7/5nm
• 5nm

By Material Type

• Silicon
• Germanium
• Gallium arsenide
• Silicon carbide
• Gallium Nitride
• Others

By End-user

• Telecommunication
• Energy
• Electrical and Electronics
• Medical and Healthcare
• Automotive
• Defense & Aerospace
• Others

By Region

• North America
• Europe
• APAC
• LAMEA