Fortune Business Insights recently published a report—using pre-coronavirus pandemic datasets—predicting the global semiconductor market will reach $730.29 billion in revenue by 2026. The research group identified mounting consumer electronics demand and increasing urbanization as major expansion drivers.
The firm’s forecast also includes insights into how different parts of the world will contribute to the industry’s long-term growth.
Multifaceted SoCs & Urbanization are the Future of the Semi Market
Like ResearchandMarkets recently released 2019 to 2025 Internet of Things (IoT) chip market report, Fortune Business Insights’ outlook indicates multifaceted system-on-chip (SoCs) are the future. The Indian consultancy identified SoCs as a central growth driver because they facilitate computing functionality and processor-peripheral integration. As chipset advancements have driven consumer electronics demand for decades now, that part of the group’s analysis seems on point.
Fortune Business Insights also noted rising population growth, improving economic conditions, and increasing urban density sustain a cycle of ever-increasing semiconductor demand.
The urban digitization cycle begins when people move to cities to pursue better employment opportunities and find they have greater internet bandwidth. Next, city dwellers buy state-of-the-art electronics like smart speakers and connected TVs because their environment supports their usage. The cycle completes when local datacom providers upgrade a city’s digital infrastructure, which makes the area more appealing to large employers and aspiring workers.
At every spoke on the wheel, the urban digitization cycle incentivizes manufacturers to acquire more semiconductors.
Provided the coronavirus pandemic does not cause a global urban exodus, this section of Fortune Business Insights’ forecast should also hold true.
Regional Analysis of Global Component Sector Growth
The consultant group’s regional analysis of long-term global component sector growth uncovered a few intriguing emerging trends.
The organization predicts the Asian-Pacific region will experience the highest rate of semiconductor market share growth through the projected period. The firm attributed that outcome to surging local interest in consumer electronics and falling device prices.
This trend is observable today in Samsung’s dominance of the worldwide smartphone market. While Apple products are the best-selling handsets in the West, the South Korean corporation’s mobiles rule the non-Sino Eastern markets. In addition, Huawei generated record revenue in 2019 because Chinese consumers took to its products in a major way.
The analysis firm also expects the Latin American component sector to balloon because of swelling public interest in consumer electronics.
The consultancy predicts European semiconductor purchases will primarily be driven by demand from the telecommunications and automotive segments. As the European Union and the United Kingdom are preparing their 5G deployments now, the firm’s regional analysis seems credible.
Although long-term market forecasting in the post-coronavirus landscape is challenging, Fortune Business Insights’ semiconductor market report looks broadly accurate.