Market Trends of Global Application Specific Communications Analog IC Industry
This section covers the major market trends shaping the Application Specific Communications Analog IC Market according to our research experts:
Increasing Penetration of Internet and Mobile Telephony Services to Drive the Demand
- The use cases for application-specific analog integrated circuits have expanded significantly in the past few years as they are widely used in portable communication devices such as mobile phones, laptops, tablets, etc. Communication ASICs are also commonly used in cellular base stations and telecommunication modules.
- In the last few years, mobile telephony and internet services penetration has grown significantly owing to increasing consumer awareness and expanding telecommunication networks. According to Ericsson, there were around 8.2 billion mobile subscriptions at the end of 2021, which is expected to increase to approximately 9.1 billion by the end of 2027. Such trends are expected to drive the demand for analog ASICs for communication applications.
- The arrival of 5G technology is expected to have a long-term impact on the growth of the studied market as it is expected to influence the analog ASICs demand across various end-user verticals. For instance, many millimeter-wave small cells are needed to address the requirements of 5G networks, increasing the number of base stations. According to Ookla, in 2021, the number of mobile base stations providing 5G services in the United Kingdom more than doubled to over 6,500 sites from 300 sites in 2020. As the analog ASIC represents a breakthrough in analog integration for high-speed designs that saves space, power, and cost, their demand is also expected to grow.
- Furthermore, the increasing pace of the 5G rollout is also expected to influence the demand for 5G-enabled devices as more and more consumers will switch to the high-speed offering of 5G services. For instance, according to Ericsson, the number of mobile 5G subscriptions is expected to reach 4.4 billion in 2027. The number of subscribers is expected to impact the demand for analog ASICs similarly.
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Asia Pacific to Hold Significant Market Share
- The communication industry in the Asia Pacific region has witnessed remarkable growth in the last few decades. The key factors behind this growth are the development of digital skills, especially among the younger generation, the expansion of cellular coverage, and the affordability of mobile subscriptions. According to GSMA, currently, mobile broadband networks cover around 96% of the region's population.
- Furthermore, rapid industrialization and growth of the IT sector are also positively influencing the communication industry in the Asia Pacific region as these sectors are significantly driving foreign investments, enhancing the region's exposure to developed countries and new technologies. As the availability of fast and highly efficient communication networks is essential for these sectors' growth, both the public and private sectors have made significant investments in developing the region's communication industry.
- For instance, China has become the leading country in adopting the latest 5G technology. According to the Ministry of Industry and Information Technology, at the end of August 2022, the number of 5G base stations represented about 19.8% of total mobile base stations in China, up 5.5 percentage points compared to the end of 2021.
- Although other countries in the region have not been able to match the pace with China, they are expected to follow a similar growth pattern in the next three to five years. For instance, according to Ericsson, 4G is currently the dominant radio access technology in the South East Asia & Oceania region, with 5G subscriptions accounting for around 15 million at the end of 2021. However, 5G mobile subscriptions are expected to grow at a CAGR of about 83 percent, reaching 570 million in 2027. Such trends are expected to create significant growth opportunities for the studied market.
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