Report: Global semiconductor market to reach $523 billion by 2027

0
145
A diverse global supply chain is key in times of crisis.

ResearchandMarkets published a report forecasting the global semiconductor and circuit manufacturing industry will reach $522.8 billion by 2027 on Thursday. Even with the ongoing impact of the coronavirus pandemic, the firm predicts the sector will maintain a compound annual growth rate of 4.3 percent over the next seven years.

The organization’s analysis also highlighted the trends, opportunities, and technologies that will shape the microelectronic market throughout the decade.

Biggest Growth Drivers

ResearchandMarkets’ new report examines historical sales data, recent market developments, and the activities of the industry’s biggest players.

Advertisement
Manage your supply chain from home with Sourcengine

The organization identified increasing digitization is a crucial driver for growth within the semiconductor sector. The firm determined the memory module segment will experience the most expansion through the forecast period. A May TrendForce study found the NAND segment rose by 8.3 percent in Q1 2020 because of a coronavirus prompted spike in data center usage.

In addition, Microsoft recently announced plans to significantly build out its cloud computing infrastructure to accommodate a new, higher level of demand. As the corporation is a major web services provider, ResearchandMarkets’ prediction of consistent year-over-year upticks in memory chip sales is credible.

The research group also pegged the increasing proliferation of smartphones as a driver for semiconductor industry expansion. Since the construction of contemporary mobile devices involves a host of different microelectronics, they make sense as a cross-component sales booster. Also, while worldwide handset sales plummeted in Q1 because of pandemic related disruption, leading manufacturers Huawei and Apple saw a resurgence in purchases at the start of Q2.

Besides, the analyst firm named the proliferation of 5G technology as a notable opportunity for component makers. Fifth-generation mobile network-compatible smartphones, base stations, Internet of Things (IoT) devices, and automobiles will require new chip architecture.

Accordingly, the high-bandwidth communications innovation will likely provide component designers and fabricators with robust revenue through 2027.

Long-Term Challenges

Although ResearchandMarkets semiconductor forecast is positive, the organization also pinpointed specific challenges that could negatively affect the industry long-term.

The business intelligence company stated the ongoing global health crisis could cause the component market to contract in some areas. TrendForce agrees with this assessment on a near-term basis as it estimates the sector will experience a 1.2 percent drop in value from 2019. Similarly, Omdia issued a report this month, noting the automotive power part segment will not see growth again until sometime next year.

The rising expense of semiconductor fabrication could also hamper long-term market development. Even though groundbreaking new production processes like extreme ultraviolet lithography have greatly advanced design sophistication, they are also driving up costs. In fact, The Wall Street Journal reported manufacturers now spend an average of $10 billion to establish new microelectronics factories.

That said, the nascent trend of nation-states subsidizing domestic semiconductor research and development could offset some of these costs.

Nevertheless, ResearchandMarkets’ finding that the global semiconductor market will see meaningful growth despite headwinds both unpredictable and inevitable is heartening.

LEAVE A REPLY

Please enter your comment!
Please enter your name here