Integrated Circuit Market Report

Market Insights

The global integrated circuit market is expected to grow from USD 453.64 billion in 2022 to USD 920.53 billion by 2029 at a CAGR of 10.6% during the forecast period.

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What is an Integrated Circuit?

An integrated circuit, also known as a microchip, is a tiny electronic device that contains multiple electronic components such as transistors, diodes, and resistors that are interconnected to perform a specific function or set of functions. These components are fabricated onto a single piece of semiconductor material, typically silicon, and are designed to work together to perform complex operations.

Integrated circuits come in different forms, such as digital, analog, and mixed-signal, and can be used in a wide range of electronic applications, such as computer systems, consumer electronics, telecommunications, and medical devices. The size of the integrated circuit can vary, ranging from a few millimeters to less than a millimeter in size.

The main advantages of integrated circuits are their small size, low power consumption, and high reliability. By integrating multiple components onto a single chip, integrated circuits can reduce the size and weight of electronic devices, increase their efficiency, and improve their performance. They are also more reliable than discrete electronic components since they are less prone to failure due to external factors such as vibration or temperature changes.

The invention of integrated circuits in the 1950s was a major milestone in the field of electronics, paving the way for the development of modern computing and communication technologies. Integrated circuits have continued to evolve over the years, becoming more sophisticated and powerful with each new generation. Today, integrated circuits are an essential component of most electronic devices, and their development continues to drive innovation and progress in the field of electronics.

Key Players

The major players operating in the global integrated circuit market are:

• STMicroelectronics N.V.
• Intel Corporation
• NXP Semiconductors N.V.
• ON Semiconductor Corporation
• Texas Instruments Inc
• Analog Devices Inc
• Infineon Technologies AG
• Microchip Technology Inc
• MediaTek Inc.
• Renesas Electronics Corporation

Market Dynamics

The integrated circuits industry is currently experiencing a significant period of change and adaptation. The global market has been undergoing a rapid adjustment phase with increased investment volumes, resulting in market share concentration among dominant players. Furthermore, the emergence of new trends such as the Internet of Things (IoT), cloud computing, and big data is progressing quickly, paving the way for integrated circuit technology to move in new directions.

To bolster their respective integrated circuit (IC) industry ecosystems, regional governments are extending their support. One notable example is China, which has been aggressively constructing new fab capacities, supported by the China Integrated Circuit Investment Fund. According to SEMI China, these investments are paying dividends, as China's wafer fab capacity market share has increased from 9% in 2010 to 17% in 2020.

The surge in demand for high-tech products has been further accelerated by remote working, lockdowns, and the shift to e-commerce. IC market players did not anticipate this tremendous demand in recent years. The construction of new fabs requires a significant investment of billions of dollars and takes years to become operational. The unexpected surge in demand has resulted in a global IC shortage due to limited manufacturing capacity. Normalization of the market is not expected until 2023.

The demand for automotive vehicles is on the rise due to extensive research and development activities undertaken by major players in the industry, particularly in the area of advanced driver assistance systems. In addition, the increasing use of IoT-based devices has led to a growing need for analog ICs, digital ICs, and microcontroller sensors in automated equipment and IoT devices.

For example, the continuous efforts to introduce advanced automotive infotainment installations, such as modern entertainment and information setups or precise GPS tracking and navigation, are expected to drive the demand and sales of automotive microcontrollers (MCUs).

Moreover, the sales of electric vehicles have been on the rise due to high volatility in fuel prices and government subsidies offered to boost EV sales. This increase in electric vehicle manufacturing is anticipated to provide new growth opportunities for the market. Automotive infotainment systems are expected to account for 10% of the market share, while the remaining 90% of microcontroller sales are estimated to be for other parts of the automotive vehicle, such as advanced driver assistance systems, power windows, engine controls, battery management systems, electric steering, power brakes, and others.

The trend towards interconnected and autonomous vehicles, along with advanced and easy driving controls using smart sensors and integrated circuit-equipped devices, is expected to result in commendable performance of the market in various parts of the world.

Low chances of refabrication or repair, and unable to operate at low temperature coefficient to hinder market growth

ICs are a compact unit comprising different electronic components installed on a semiconductor material such as silicon, which reduces the size and complexity of electronic devices. However, if one component in the IC chip fails, the entire chip needs to be replaced, and it is not possible to repair or modify the circuit, leading to increased maintenance costs.

Furthermore, ICs may not be suitable for operating in harsh environments and freezing temperatures due to their potential inability to achieve low temperature coefficient. They are also less flexible and cannot function effectively if not properly installed or handled carelessly. ICs are susceptible to failure if exposed to excessive heat, which makes them unsuitable for use in high-temperature environments.

Segment Analysis

Regional Analysis

Asia Pacific to grow with the highest CAGR in the market during the forecast period. The Asia Pacific region is witnessing significant growth in the Integrated Circuits Market, driven by a rise in end-user demand across various sectors, including smartphones, renewable energy, and automotive (especially electric vehicles). The consumption of semiconductor components in China, South Korea, and Japan is increasing at a faster pace than in other countries due to the transfer of diverse electronic equipment to China.

China's IC design sector has shifted from a focus on low-margin consumer applications to advanced computing and communication semiconductors in growth markets such as automotive, IoT, crypto mining, and AI. With the steady growth of China's economy and the increasing demand for applications such as cloud computing, 5G, IoT, AI, and intelligent and connected vehicles, the demand for China's integrated circuit market is expected to continue to rise.

Qiao Yueshan, who heads the electronic information department at China's Ministry of Industry and Information Technology, has stated that the growth rate of China's Integrated Circuit Industry during the 13th Five-Year Plan period was four times higher than the global growth rate.

Additionally, other countries in the region, such as India, are making efforts to attract investments and incentivize the establishment of fabs in the country. The Indian government has issued an Expression of Interest (EoI) for setting up new semiconductor wafer/device fabrication facilities or expanding existing ones.

Research Methodology

This report offers high-quality insights and is the outcome of a detailed research methodology comprising extensive secondary research, rigorous primary interviews with industry stakeholders, and validation and triangulation with Stratview Research’s internal database and statistical tools.

More than 1,000 authenticated secondary sources, such as company annual reports, fact books, press releases, journals, investor presentations, white papers, patents, and articles, have been leveraged to gather the data.

We conducted more than 15 detailed primary interviews with the market players across the value chain in all four regions and industry experts to obtain both qualitative and quantitative insights.

Report Features

This report provides market intelligence in the most comprehensive way. The report structure has been kept such that it offers maximum business value. It provides critical insights into the market dynamics and will enable strategic decision making for the existing market players as well as those willing to enter the market. The following are the key features of the report:

• Market structure: Overview, industry life cycle analysis, supply chain analysis.
• Market Environment analysis: Growth drivers and constraints, Porter’s five forces analysis, SWOT analysis.
• Market trend and forecast analysis.
• Market segment trend and forecast.
• Competitive landscape and dynamics: Market share, Product Portfolio, New Product Launches, etc.
• Attractive market segments and associated growth opportunities.
• Emerging trends.
• Strategic growth opportunities for the existing and new players.
• Key success factors.

Customization Options

With this detailed report, Stratview Research offers one of the following free customization options to our respectable clients:

Company Profiling

• Detailed profiling of additional market players (up to three players)
• SWOT analysis of key players (up to three players)

Competitive Benchmarking

• Benchmarking of key players on the following parameters: product portfolio, geographical reach, regional presence, and strategic alliances

Custom Research: Stratview research offers custom research services across the sectors. In case of any custom research requirement related to market assessment, competitive benchmarking, sourcing and procurement, target screening, and others, please send your inquiry to sales@Stratviewresearch.com

Recent Developments

• In September 2022, Valens Semiconductor collaboated with Intel to develop MIPI A-PHY-compliant automotive technologies for foundry customers, benefitting from Valens Semiconductor’s leading expertise in the MIPI A-PHY technology.
• In June 2022, Microchip launched LX34070 IC sensor for EV motor control applications.
• In May 2022, STMicroelectronics collaborated with Semikron to integrate silicon-carbide power technology in next-generation electric-vehicle drives.