Market Trends of Asia Pacific Integrated Circuit (IC) Industry
Analog IC is Expected to Drive the Market
- An analog integrated circuit (IC) is a network of interconnected components built on a semiconducting wafer. In contrast to digital circuits, which have only two levels of input and output voltages, these components operate over a continuous range of input signals. They're common in cellphones, wireless devices, third and fourth-generation (3G/4G) radio base stations, 5G, and portable device batteries.
- The region's market for analog integrated circuits is expected to be driven by the evolution of technological transformation in the consumer electronics, Telecom, and automotive sectors in countries such as India, China, South Korea, and Japan. The use of analog ICs in systems is growing due to technological developments like temperature sensors and power management in devices like wireless headphones, speakers, home appliances, and smartphones.
- Moreover, Internet of Things (IoT) adoption is growing steadily due to the increasing availability of high-speed connectivity, cloud adoption, and data processing and analytics; Internet of Things (IoT) adoption is expected to drive the market for Analog ICs. According to Ericsson, North East Asia is expected to be the leading region in cellular IoT connections, surpassing 2 billion by 2023.
- Over the forecast period, the rapidly growing demand for smartphones and tablets is expected to boost the market for application-specific integrated circuits. Furthermore, with the introduction of smart electronic and electrical products such as televisions, wearables, digital cameras, and laptops that feature advanced technologies such as flat screens, touchscreen monitors and displays, and Bluetooth functions, demand for analog ICs is expected to rise.
- The increasing deployment of 5G connectivity across the region is driving the incorporation of connected car features in vehicles, supporting market growth. According to Ericsson, 5G will account for nearly 40% of mobile subscriptions in India by the end of 2027, with 500 million subscribers. Such development factors will increase the demand for Analog ICs in the sector.
- Moreover, China is one of the world's leading producers and consumers of semiconductors and related devices. The government has seen a surge in the electronics industry, particularly since the infamous trade war with the United States. According to China Unicom, the country's commercial roll-out of 6G mobile services is expected to begin in 2030. The market for ICs in the electronics industry is expected to be driven by China's growth in mobile communications.
- Furthermore, India has emerged as one of the world's fastest-growing economies due to its rise in population. With the help of substantial incentives and assistance from Foxconn in Taiwan, India intends to launch a chip fab industry. Foxconn, for example, announced in December 2022 that it would build a semiconductor fabrication facility in Gujarat. The company already manufactures Apple iPhones in the country and is expected to build a USD 20 billion semiconductor fabrication plant on the site in collaboration with commodities behemoth Vedanta Group. Such investments will help to develop the region's IC market.
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Automotive is Expected to Hold Significant Share
- Moreover, according to China Passenger Car Association, it is estimated that sales of passenger NEVs in China will reach 8.5 million in 2023, up from 6.5 million in 2022. Total NEV sales in 2023, including those of commercial vehicles, are expected to reach 9 million. In addition, NEVs are expected to account for 30 percent of total vehicle sales in 2023, up from 25.6 percent last year. Such factors and developments within the region's automotive segment will drive the demand for ICs for their extensive usage.
- Application Specific IC segment is also finding various opportunities for their use in automotive end equipment such as infotainment systems, which include information and passenger electronics systems. The region's automotive industry developments are expected to drive demand for Application specific analog ICs. According to the Japan Automotive Dealers Association and the Japan Light Motor Vehicle and Motorcycle Association, sales in Japan increased 16.7% to 349,592 units in April 2023. From January 2023 to April 2023, total sales increased 15.7% to 1,731,150 units. Such advancements in Japan's automotive industry will necessitate using Analog ICs in their applications.
- With the transition to electric vehicles and the increase of vehicles with advanced driver assistance systems (ADAS), the IC market dominated by Analog ICs is expected to see continuous growth catering to their demand in Automotive applications. This has created a significant opportunity for the vendors in the market to enhance their presence through strategic investments.
- For instance, in May 2022, Toshiba and Japan Semiconductor Co., Ltd. developed a highly reliable and versatile analog platform with built-in non-volatile memory (eNVM) for automotive applications. Co-developed. Applied analog integrated circuits (ICs), the 0.13-micron generation analog platform, is an optimized combination of processes and devices for voltage ratings, performance, reliability, and cost of automotive analog circuits and eNVM on a single chip.
- In addition, in August 2022, Analog IC foundry GTA Semiconductor recently launched a production capacity expansion project in the Lingang Special Zone of the Shanghai Pilot Free Trade Zone, planning to set up a new automotive chip production line. The company has decades of experience in quality control systems for automotive IC production in mass production mode. Such investments are expected to boost the demand for automotive ICs in the region.
- Moreover, the growing need for advanced driver assistance systems (ADAS) will drive the industry's growth during the forecast period. In addition, factors such as increasing vehicle production and new technology improving vehicle standards are accelerating the development of IC adoption in regions such as India, South Korea, and China. For example, the Indian government predicts that the automotive sector will attract investments of USD 8 billion to USD 10 billion from domestic and foreign sources by 2023. Such investments are expected to increase vehicle production capacity and create significant demand for semiconductor devices like ICs.
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