Outlook for global semiconductor market
Semiconductors have revolutionized the electronics industry over the past 40 years through technological innovation. They sit at the heart of every electronic and partially conduct electricity. PricewaterhouseCoopers (or PwC) expects the global semiconductor market to grow at a CAGR (compound annual growth rate) of 5.2% during 2014–2019 to reach $432 billion by 2019. The IoT (Internet of Things) is the next growth driver in the semiconductor space.
According to the World Semiconductor Trade Statistics (or WSTS), the global semiconductor market is expected to grow 1.4% to $341 billion in 2016. Explore this series to understand the key consumer markets that will drive growth in the semiconductor space in 2016.
According to PwC, the overall semiconductor industry’s growth will be driven by the industrial and automotive segments, which are expected to grow at CAGRs of 9.7% and 8.2%, respectively, between 2014 and 2019. IC Insights expects the industry’s growth to be driven by the automotive and communications segments, which are expected to grow at CAGRs of 6.7% and 6.5%, respectively, between 2014 and 2019.
In 2019, the data-processing and communications segments will dominate the semiconductor space, with 38% and 29% shares, respectively, according to PwC.
Data-processing and communications
The data-processing segment includes computers, tablets, notebooks, and laptops, and is dominated by Intel (INTC). The communications segment includes mobiles and smartphones and is dominated by Qualcomm (QCOM). At present, high-end smartphones are driving growth in the communications market. However, this trend will change as demand for basic smartphones increases in developing economies.
The fast-growing automotive semiconductor market witnessed one of the biggest mergers of 2015 in the NXP Semiconductors (NXPI) Freescale merger. China (MCHI) will continue to lead the automotive segment. Mexico, Poland, Indonesia, Turkey, and Thailand are expected to post higher growths, while Brazil and Russia are expected to post slower growths.
The IoT is the next wave that will drive growth in the semiconductor space in 2016 and beyond. All major companies are preparing to tap this trend. In 2015, Intel acquired Altera (ALTR) and Qualcomm acquired CSR to grow in the IoT space.
In this series, we’ll look at each of the key consumer segments in detail.