Market Trends of APAC Analog IC Industry
Surging Demand for Communication Devices Drives Market Growth
- In recent years, the emergence of different technologies, including smartphones, tablets, and various cloud-based services, has driven a steady increase in demand for faster and more pervasive personal mobile communication systems, which has resulted in the introduction of a growing variety of wireless base stations (BTS), creating the connection points between the mobile terminals and the main wired network.
- With the increasing investments in 5G, the number of 5G base stations is also rising in the region. For instance, according to the Ministry of Industry and Information Technology (MIIT), China aims to have 2 million installed 5G base stations by the end of 2022 to expand the country's next-generation mobile network. The Chinese mainland at the time has 1.425 million installed 5G base stations that support more than 500 million 5G users nationwide, making it the biggest network in the world, as per MIIT.
- The rapid growth of smartphones and smart home devices in the markets in recent years has fueled the demand for analog ICs in India and South Korea. The increasing adoption of the fifth-generation (5G) wireless technology for digital devices is also a major factor in the growing demand for connected devices and smart products, thereby increasing the need for the analog ICs used in these devices.
- As per the Korea Information Society Development Institute (KISDI), the ownership rate of smartphones in South Korea increased significantly to 94.8% in 2023 compared to 91% in 2020. Such an increase in the adoption of smartphones in the region is expected to increase the demand for analog ICs in the market.
- Japan is set to witness a significant shift in its mobile landscape by 2025. Projections indicate that 5G subscriptions, driven by major operators like NTT Docomo, KDDI, Softbank, and Rakuten, will outstrip 4G connections. This surge will establish 5G as the primary technology, capturing an estimated 70% share of the nation's mobile subscriptions, while 4G steadily diminishes.
- In addition, the Japanese government intends to reach a coverage of 95% of the population by March 2024. Such factors may play a significant role in driving the analog IC market in the region.
Understand The Key Trends Shaping This Market
Download PDF
China to Hold a Significant Market Share
- China is among the top countries creating semiconductors and related devices and consumption. The government has noticed a boost in the electronics industry, particularly since the infamous trade dispute with the United States. Although the local analog IC design and manufacturing houses are still behind their international counterparts, the favorable industry regulations and growing focus of different industry stakeholders are anticipated to facilitate the industry's growth.
- In China, the automotive industry is among the leading market drivers for analog Ics. The fast growth of the new energy vehicle (NEV) in the domestic and international market and the growing demand for analog chips employed in automotive electronics are promoting the growth of the market.
- For instance, according to the China Association of Automobile Manufacturers (CAAM), in April 2022, China's new energy vehicle sales amounted to 299,000 units, of which 280,000 were electric passenger vehicles and 19,000 were commercial electric vehicles. Sales of passenger battery electric vehicles (BEVs) and passenger plug-in hybrid electric vehicles (PHEVs) were 212,000 and 68,000 units, respectively.
- The development of the automotive industry is driving the need for analog ICs, encouraging IC manufacturers to extend their production capacities further and design innovative solutions. For instance, in August 2022, analog IC foundry GTA Semiconductor started its capacity expansion project in the Lingang Special Area in the Shanghai Pilot Free Trade Zone. It plans to set up new production lines for automotive chips.
- The increasing penetration of 5G technology is driving the demand for 5G-enabled smartphones and supporting the digitization of other industries in the country. The high-speed data connectivity facilitated by 5G is expected to positively impact industrial automation and the adoption of advanced technologies such as AI, IoT, etc. As a broad range of electronic devices is used to establish such infrastructure, the demand for analog circuits is also expected to grow.
Get Analysis on Important Geographic Markets
Download PDF
