Automotive, industrial sectors lead chip market growth

Market news | March 28, 2023

By Peter Clarke

semiconductor market Analog

The automotive and industrial sectors are set to exhibit the strongest growth in demand for semiconductors during the decade 2021 to 2030, according to the Semiconductor Industry Association.

The semiconductor industry’s origins were in defense and communications before the drivers of growth moved to computing, personal computing and on to consumer electronics.

Now it is the turn of the automotive and industrial sectors, which along with consumer electronics each had 14 percent of the chip market in 2022, according to a blog by Robert Casanova, director of industry statistics and economic policy at the SIA.

Share of global chip sales by end use 2021, 2022, Source: WSTS, SIA.

For many years communications and computing have accounted for about one third each of chip sales with automotive, industrial, and consumer electronics accounting for the remainder. Casanova states 2022 showed a marked shift in end use.

The biggest end-use market for chips was still communications with 30 percent of the market followed by computing with 26 percent. But the lead has fallen while industrial and automotive applications leapt up to 14 percent.

Global chip market by end-use demand 2021 to 2030 in US$bn. Includes ASP increase of 2.0 percent per annum for the period 2022 to 2030. Source: SIA, Omdia, McKinsey.

Casanova referenced an Omdia and McKinsey chart that shows the automotive sector with 14 percent compound annual growth rate (CAGR) over the period 2021 to 2030 and industrial sector end use growing at 12 percent CAGR. The other sectors will have single-digit percentage growth in a market that will experience an overall CAGR of 6.7 percent.