Editorial Feature

The Current State of the Global Semiconductor Market

Global Market ReportSemiconductors

The global semiconductor market has entered an exciting period. Demand for chip technology is both driving the industry as well as hindering it, with current chip shortages predicted to last for some time. Current trends will likely shape the future of the industry, which is set to continue to show strong growth in the coming years, particularly in Asia Pacific, although the US will also be looking to grow its market share.

Application Areas of the Semiconductor Market

Semiconductor applications are wide-ranging and becoming increasingly important to day-to-day life. Semiconductors are vital components in consumer electronics, including laptops and mobile phones, microwaves and refrigerators, games consoles, and more. They are also essential components of embedded systems (essentially, small computers), that make it possible to produce a variety of products such as digital watches, GPS systems, central heating systems, fitness trackers, televisions and more.

The properties of semiconductors make them useful for other applications, such as those with high thermal conductivity, as semiconductors are useful as cooling agents in thermoelectric applications. Additionally, some semiconductors can also produce light, most often those that are available as a liquid or as a thin-coated film. These types of semiconductors are used in LEDs and OLEDs.

Finally, semiconductors are making a huge contribution to the field of renewable energy. Without silicon, one of the world’s most commonly used semiconductors, the use of solar panels would be greatly hindered, given that 85% of solar modules sold today contain this semiconductor.

Hot Topics in the Semiconductor Market

Currently, the semiconductor market is potentially in its most defining period. Several key trends are set to shape the industry for better or worse, including the ongoing chip shortage, the changing competitive landscape, and a continued push for sustainability.

In 2021, global chip shortages became so bad that it shut down automotive production lines. The continued global semiconductor chip shortage was worsened by the disruption caused by the Covid-19 pandemic and continues to affect industries that are reliant on chip technology. Automotive and technology manufacturers have felt the biggest strain, although all related industries have been impacted.

The chip shortage is predicted to linger for many years, given the steadily increasing demand for this technology. Companies reliant on chip technology will need to become more agile in their strategies to survive this.

semiconductor market, global semiconductor market, semiconductor market trends

Image Credit: aslysun/Shutterstock.com

In the coming years, the global semiconductor market will also likely undergo significant changes in terms of the companies that have the most influence over the space. Tech giants including Apple (in-house-developed M1 chips), Google (Tensor), and Amazon (Graviton) have plans to produce their own chips, overcoming the challenge of the chip shortage and differentiating themselves from the competition. This changing competitive landscape will have an impact on the technology available to the wider market, and will, therefore, influence the direction in which applications of semiconductor technology develop.

The drive to implement sustainable practices is being felt across industries worldwide. The impact of climate change and the role of human activity in this has never been more widely discussed and understood. As a result, consumers and companies are motivated to behave in a more sustainable manner. For companies in the semiconductor market to survive in the future, it is vital that they adopt sustainable practices to keep up with changing regulations and consumer expectations.

For example, the production of semiconductors is very water intensive. Therefore, some companies in the space have been exploring ways to reduce their use of water by leveraging water recycling applications. Companies are also increasingly adopting renewable energy throughout their processes in order to reduce the environmental impact of their operations.

Current Global Semiconductor Market

The global semiconductor market was valued at $429.5 billion in 2021. It is predicted to grow at a CAGR of 8.8% from 2022 to 2028 to reach a valuation of $712.4 billion by the end of the forecasted period.

Asia Pacific leads the global semiconductor market, holding the greatest market share in 2021.  Prominent market leaders include Broadcom Inc. (U.S.), Intel Corporation (U.S.), Qualcomm (U.S.), Samsung Electronics (South Korea), SK Hynix (South Korea), Taiwan Semiconductors (Taiwan), Texas Instruments (U.S.), Toshiba Corporation (Japan), Maxim Integrated Products Inc. (U.S.), Micron Technology (U.S.), NVIDIA Corporation (U.S.), and NXP Semiconductors N.V. (Netherlands). In the next decade, we will likely see some of the world’s tech giants added to this list, as companies such as Apple, Google, and Amazon enter the market.

semiconductor market, global semiconductor market, semiconductor market trends

Image Credit: H_Ko/Shutterstock.com

While the US continues to play an important role in the semiconductor market, its share of semiconductor manufacturing capacity has fallen in the last two decades, from 37% to around 12%. Without action, it is predicted that US capacity to manufacture will fail to meet domestic demand in the coming years, allowing space for international companies to enter the US market.

Future Directions for the Semiconductor Market

In the coming years, the maturing fields of artificial intelligence (AI) and the Internet of Things (IoT) will shape the semiconductor market. Recent developments in AI and IoT technology have catalyzed innovation within the semiconductor market. Technological developments in these sectors will likely translate to the emergence of novel applications of semiconductors across a number of industries.

This rapidly rising demand for semiconductors will continue with the widespread adoption of 5G networks. This gives the semiconductor market an opportunity to capitalize on a new market; however, to do so successfully, companies will need to overcome the challenge of chip shortages.

Additionally, as mentioned above, the US is projected to fail to meet domestic demand for semiconductors if no action is taken. Recently, President Biden and CEO of Intel, Pat Gelsinger, announced that $20 billion would be invested into a silicon manufacturing mega-site in Ohio. The site would house two plants for research, development, and manufacture of state-of-the-art chips. This investment could be fundamental to growing the US share of the global semiconductor market.

Final Thoughts

Overall, the future of the semiconductor market is promising. Increasing demand and innovation in related technologies will encourage growth in the global sector. While the challenge of chip shortages may linger in the short term, the long-term outlook for growth is promising. Currently, Asia Pacific is the most important region for the semiconductor market, however, the US may challenge this in the next decade.

More from AZoM: How Far Can Semiconductor Manufacturing Be Automated?

References and Further Reading

2022. Global Semiconductor Market is Poised to Grow by USD 712.4 Billion 2022-2028 | Vantage Market Research [online]. Globe Newswire. Available at: https://www.globenewswire.com/en/news-release/2022/09/01/2508715/0/en/Global-Semiconductor-Market-is-Poised-to-Grow-by-USD-712-4-Billion-2022-2028-Vantage-Market-Research.html

2022. When the chips are down: How the semiconductor industry is dealing with a worldwide shortage [online]. World Economic Forum. Available at: https://www.weforum.org/agenda/2022/02/semiconductor-chip-shortage-supply-chain/ (Last accessed October 2022)

Paul Laudicina. 2022. Semiconductors: How The U.S. Can Make Up For Lost Time [online]. Forbes. Available at: https://www.forbes.com/sites/paullaudicina/2022/01/29/semiconductors-how-the-us-can-make-up-for-lost-time/ (Last accessed October 2022)

Smith, R., Hwang, A., Beetz, T. and Helgren, E., 2018. Introduction to semiconductor processing: Fabrication and characterization of p-n junction silicon solar cells. American Journal of Physics, 86(10), pp.740-746. https://aapt.scitation.org/doi/full/10.1119/1.5046424

Disclaimer: The views expressed here are those of the author expressed in their private capacity and do not necessarily represent the views of AZoM.com Limited T/A AZoNetwork the owner and operator of this website. This disclaimer forms part of the Terms and conditions of use of this website.

Sarah Moore

Written by

Sarah Moore

After studying Psychology and then Neuroscience, Sarah quickly found her enjoyment for researching and writing research papers; turning to a passion to connect ideas with people through writing.


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  1. Roberson Machine Company Roberson Machine Company United States says:

    Great article, Sarah! Really well written and highly informative.

The opinions expressed here are the views of the writer and do not necessarily reflect the views and opinions of AZoM.com.

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