Market Trends of Integrated Circuits Industry
This section covers the major market trends shaping the Integrated Circuits Market according to our research experts:
Increasing Fab Capacities to meet Surging Demands
- According to a fab survey released in May 2021 by the industry group SEMI, Global chip manufacturers are forecasted to produce a record 6.6 million wafers every month by 2024. That forecast reflected substantial investments in 200-mm fab equipment, which is expected to approach USD 4 billion in 2021, nearly doubling since hovering above USD 2 billion between 2012 and 2019.
- For instance, in August 2021, SiEn (Qingdao) Integrated Circuits Co, a foundry, started production of 8-inch silicon wafers in Qingdao and tested a new 12-inch production line. Moreover, in September 2021, Semiconductor Manufacturing International Corp (SMIC) announced an investment of USD 8.87 billion in building a chip manufacturing plant in Shanghai. The company's plan has been focused on integrated circuit foundry and technology services on process nodes for 28 nanometers and above.
- Similarly, Intel also laid out ambitious CapEx plans. In March 2021, Intel announced plans to invest USD 20 billion in two new fabs in Arizona, United States.
- Various new market players are also focussing on adding manufacturing capacities. For instance, in October 2021, PragmatIC Semiconductor secured USD 80 million of Series C investment. This funding was aimed to build a second FlexLogIC fab in the North East of England, which intends to meet the growing demand for ultra-low-cost flexible integrated circuits (FlexICs).
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Asia Pacific is Expected to Grow with the Highest CAGR
- The growth of the Integrated Circuits Market in the Asia Pacific correlates with the end-user growth across the region, being one of the main markets for smartphones, and is witnessing rising investments in renewable, automotive (particularly EVs), among various others.
- The consumption of semiconductor components is rapidly increasing in China, South Korea, and Japan as compared with other countries due to the continuing transfer of diverse electronic equipment to China. Moreover, IC design, the largest sector of China's Integrated Circuits industry, has progressed from low-margin consumer applications focus to encompass advanced computing and communication semiconductors across growth markets in automotive, the Internet of Things (IoT), and crypto mining, and artificial intelligence (AI).
- The demand for China's integrated circuit market is anticipated to continue increasing with the steady growth of China's economy and driven by new applications such as cloud computing, 5G, Internet of Things, artificial intelligence (AI), and intelligent and connected vehicles.
- According to Qiao Yueshan, head of the electronic information department at China's Ministry of Industry and Information Technology, China's Integrated Circuit Industry growth rate was four times the global growth rate during the country's 13th Five-Year Plan period.
- Also, other countries such as India in the region are taking significant steps to attract investments in the country and intend to incentivize and attract investments for setting up fabs in India; the government has issued an Expression of Interest (EoI) for setting up/expansion of existing semiconductor wafer/ device fabrication facilities in the country.
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