by The microelectronics market involves the design, development, manufacturing, and testing of integrated circuits or microchips. Microchips find applications in various electronic devices and products, including smartphones, computers, medical devices, appliances, automobiles, and industrial equipment. Advancement in integrated circuits technology has enabled higher processing power and memory capacity in smaller package sizes. Manufacturers are focusing on developing more compact and energy-efficient chips for various emerging applications in IoT and wireless technologies. The rising demand for connected devices and growing digitization across industries is fueling the need for microchips and semiconductors.
The Global microelectronics market is estimated to be valued at US$ 626735.78 Bn in 2024 and is expected to exhibit a CAGR of 13% over the forecast period 2024 To 2031.
Key Takeaways
Key players operating in the microelectronics are IBM Corporation, CGI Group Inc., Accenture PLC, Deloitte LLP, AT&T Inc., PWC LLP, GE Healthcare Limited, and Syntel Inc. These players are focusing on new product launches and partnerships to strengthen their presence in the market. For instance, in 2023, IBM partnered with GlobalFoundries to enhance its silicon photonics technology portfolio for high-performance computing and AI applications.
The key opportunities in the Microelectronics Market Size include growing demand for IoT devices, increasing use of artificial intelligence and machine learning technologies, and rising need for integrated circuits in healthcare devices and applications. The increasing deployment of 5G networks worldwide is also expected to drive the growth of semiconductors consumption.
Technological advancement in the field of integrated circuits such as FinFET technology, SOI technology, and 3D IC are allowing higher transistor density, lower power consumption, and better performance. Ongoing innovation in material science, chip design, and production processes are further enhancing energy efficiency and computational power of microchips.
Market Drivers
The rising penetration of consumer electronic products such as smartphones, laptops, wearables, gaming consoles is a key driver for the Microelectronics Market industry. It is estimated that over 6 billion smartphones will be in use globally by 2023. Additionally, increasing popularity of EVs and growing adoption of autonomous & connected vehicles integrated with advanced electronics is fueling the demand for microchips and integrated circuits. Surging deployment of data centers, emergence of big data analytics, and rising investment in artificial intelligence are some other factors accelerating the growth of the overall microelectronics market.
Challenges in Microelectronics Market:
The microelectronics industry is facing various challenges due to rapidly evolving technologies and intense competition. Device miniaturization has reached physical barriers and further scaling is a big challenge for semiconductor manufacturers. Producing semiconductors with components smaller than 10 nanometers is extremely difficult and expensive due to issues like quantum tunneling effect. Another major challenge is the rising costs of manufacturing facilities and lithography equipment required for advanced nodes. Setting up new fabs for 7nm and smaller nodes require multi-billion dollar investments. Maintaining profitability with such massive capital expenditures is a tough task.
The industry is also finding it challenging to meet increasing power efficiency and performance requirements of applications like AI, data centers, 5G etc. Developing low power consuming chips with higher transistor densities and clock speeds needs revolutionary materials and process innovations. High design complexity with billions of transistors on a tiny silicon die leads to lower yields and failure risks during production. Ensuring quality, reliability and minimizing defects is another headache for chipmakers. Constant technological upgradation has shortened product life cycles, increasing risks. Geopolitical tensions among countries and trade conflicts also impact supply chains and investments in the sector.
SWOT Analysis
Strength: Significant R&D capabilities and continuous innovation allows developing advanced technology nodes and applications.
Weakness: High capital intensive nature and rapidly changing design requirements increases costs and risks.
Opportunity: Growing demand for AI, IoT, autonomous vehicles, 5G, Edge computing offers new growth avenues.
Threats: Intense competition and pressures to reduce prices can impact profitability. Dependence on Asian countries for manufacturing raises supply chain vulnerabilities.
In terms of value, the microelectronics market remains highly concentrated in North America, China and Western Europe. These regions collectively accounted for over 65% of global market revenues in 2024. Within North America, the US microelectronics industry serves as the global innovation leader driven by major tech giants and semiconductor design companies based in the country. The industry in China has grown remarkably over the past decade on the back of government support and manufacturing capabilities.
The fastest growing region for microelectronics market during the forecast period is expected to be Asia Pacific excluding Japan and China. Countries like South Korea, Taiwan, Singapore etc. are investing heavily in advanced semiconductor facilities to meet rising global demand as well as diversify manufacturing away from China. Asia Pacific is witnessing tremendous growth momentum and rapidly gaining clout in the global supply chain network.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
About Author - Money Singh
Money Singh is a seasoned content writer with over four years of experience in the market research sector. Her expertise spans various industries, including food and beverages, biotechnology, chemicals and materials, defense and aerospace, consumer goods, etc. LinkedIn Profile
