The Asia Pacific analog semiconductor market is evaluated at US$40.344 billion for the year 2020, growing at a CAGR of 5.02%, reaching a market size of US$56.830 billion by the year 2027.
The analog semiconductor market in the Asia Pacific has been a key contributor to the semiconductor industry. The annual sales of the Asia Pacific region saw an increase of 25.9% in the year 2021, as per Semiconductor Industry Association. Despite tensions between the United States and China, China maintained the greatest semiconductor market share in the area. Other countries such as Taiwan, Japan, and India have also been significant contributors to the analog semiconductor market. However, owing to the recent lockdown measures imposed by the Chinese government due to the re-emergence of the COVID-19 virus, the semiconductor market may face shortages and disruptions in supply.
The COVID-19 pandemic has caused massive supply chain disruptions, reducing the analog semiconductor industry's overall worldwide development. The consumer electronics and semiconductors sector saw a big rise in demand as a result of the government's numerous lockdown and remote work policies. However, due to the shutdown of many companies and factories, it could not be met with similar supply sources. This imbalance created a void in the global supply and demand pattern, which disrupted various automobile, technology, aerospace, and other industries. It is predicted that this shortage in supply of semiconductors will last till 2023 since the semiconductor industry is capital intensive industry, and setting up new production units is going to be time-consuming. Also, the re-emergence of the COVID-19 virus in China might further delay the development process in the sector.
In the automobile and consumer electronics industries, the Asia Pacific area has witnessed tremendous growth. With countries attempting to meet higher emissions regulations, the electric car sector has made significant strides in recent years.
In countries like India, the electric vehicle market has exploded. The desire for environmentally friendly and clean automobiles is at an all-time high. With the help of government incentives and subsidies in various Indian states, the Indian EV market is expected to rise. This is also in accordance with India’s goal to reach 100% electrification by 2030.
A similar rise in the EV segment has been seen in the Chinese Electric vehicle market. With the availability of affordable electric vehicles, the Chinese EV market has been the largest globally. The adoption of new government policies is one of the primary factors that have fuelled the rapid growth of the Chinese EV industry. China's objective for total vehicle electrification, as well as a long-term goal to aid in the achievement of mitigation targets, has aided the electric car sector significantly. President Xi Jinping of China has also committed to attaining carbon neutrality by 2060.
South Korea and Japan have also noticed similar advances in technology and the automotive industry. Developments in technologies such as 5G, self-driving cars, EVs, industrial robotics, and automation have driven up the market for analog semiconductors. Currently, 100% of the world's most advanced (below 10 nanometers) logic semiconductor production capacity is concentrated in Taiwan (92%) and South Korea (8%), thanks in part to favourable incentives and government assistance in these host countries.
China’s zero-COVID policy
China's tight zero-COVID stance is proving increasingly difficult to maintain as more infections are discovered across the country. In the week leading up to April 1st, around 54,000 new cases were reported in mainland China. Tens of millions of people in China have been placed under lockdown, including the country's main metropolis and financial center, Shanghai. Thousands of people have been tested, and makeshift hospitals and quarantine centers have been built up.
China's zero-COVID policy has been one of the most stringent in the world in combating the outbreak. However, a recent spike in infections has forced it to rethink its approach to the crisis. The knock-on impact of China's restrictions has started to limit both domestic and overseas vehicle production, just as the car manufacturers hit by the COVID slowdown in Shanghai were starting to recover. Renault recently reported that manufacturing of the Mégane E-Tech had been temporarily halted at its facility in Douai, northern France, citing a semiconductor problem intensified by the lockdown measures in certain parts of China. Porsche recorded a decrease of 5% year on year in 2022 Q1 sales. Other automotive producers such as Tesla and Volkswagen face similar challenges as most automotive companies are dependent on Chinese makers for parts. According to China’s National Bureau of Statistics, semiconductor chip production also fell by 4.2% in 2022 Q1. The output delay is more bad news for automakers, who have been dealing with a chip scarcity for the past year.
The rise in conflicts among countries
The Russian invasion of Ukraine has resulted in a humanitarian disaster as well as significant economic consequences. The economy of Ukraine is in turmoil, with supply systems for food, clothing, and other items either constrained or disrupted. The Russian economy is likewise being impacted by Western sanctions. Over 750 companies, mostly from North America and Europe, have halted or ceased trade and operations in Russia. Although Russia and Ukraine contributed just approximately 4% of world GDP in 2021, the interconnectedness of global supply lines has allowed this war to ripple across industrial supply chains.
Palladium is a rare metal needed in sensor chips and some types of computer memory, and Russia generates roughly a third of the world's supply. Because of the conflict, supply channels for neon and palladium have been cut off, driving up prices and increasing chip pricing.
Ingas and Cryoin, two Ukrainian enterprises, produce almost half of the world's neon, essential for lasers used in chipmaking. Due to the rising hostility, both Ingas, headquartered in the besieged town of Mariupol, and Cryoin, based in the port city of Odesa, have ceased operations. Ukraine also has a significant automobile component sector. It manufactures wiring harnesses, which are an important part of vehicle electrical systems. Stoppages in manufacturing of this component due to war have had a cascade effect across the automotive supply chain. Ukraine also holds an abundant quantity of lithium, an important chemical used to manufacture batteries, which might affect electric vehicle production and prices.
Texas Instruments Incorporated
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Skyworks Solutions Inc
Infineon Technologies AG
Microchip Technology Inc
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Taiwan Semiconductor Manufacturing Company
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