Europe analog semiconductor market was evaluated at US$6.32 billion for the year 2020, growing at a CAGR of 3.78% to reach a market size of US$8.19 billion by the year 2027.
Europe controls a considerable share of the semiconductor market. The market is further expected to rise in the near future due to advancements in the automotive and technological industries. With the development of the electric vehicle market and the mobile phone market, the analog semiconductor market is expected to rise. However, the lack of proper supply chains among semiconductor firms may result in a considerable decline in the market.
The COVID-19 outbreak had a considerable impact on the European analog semiconductor market. Due to the government's lockdown and social distancing rules, the COVID-19 pandemic resulted in a massive increase in the demand for semiconductors. Due to disruptions in global supply chains and marketplaces, European firms could not meet this massive rise in demand, resulting in significant losses for many. Automotive and electronic industries were also affected by this imbalance in supply and demand, which led to a decline in their profits. Studies show that boosting the utilization of present production units alone will not suffice to meet the increased demand for semiconductor chips and that additional fabrication units would be required. However, since this is a capital-intensive business and semiconductor production is a highly precise process, boosting semiconductor capacity utilization takes time. The effects of the worldwide semiconductor scarcity might last until 2023, with capacity development slow to catch up to consumer demand since establishing new facilities and updating current facilities by top companies could take up to a year.
Automotive advancements
The European automotive industry holds a substantial share in the global automotive market. Owing to the upcoming technological advancements in the automotive industry, the European automotive market is expected to rise substantially. With analog semiconductors being used in battery and inverter charge monitoring, position and speed sensing, Electronic Stability Control (ESC), crash sensing, accurate navigation, audio connectivity, amplification, and more, the semiconductor market is also expected to rise. Considering the new climate regulations, global car manufacturers have shifted their focus from traditional combustion vehicles to electronically driven vehicles. New automobile releases are on the way as automakers become more aware of the emerging electric vehicle industry. Car manufacturers like Ford, Tesla, and Toyota plan on expanding their EV share in Europe and have announced several new EVs for the consumer market.
According to the Transport & Environment Base scenario, to meet the 2025-2030 CO2 standards, manufacturers would have to sell at least 2.3 million EVs in 2025 and at least 5 million EVs in 2030. Based on forecasts by the T&E, carmakers are expected to produce even more EVs than necessary to meet the required CO2 standards. This would mean a significant boost in the analog semiconductor market.
Technological innovations
With new technological developments, the European electronics industry is expected to grow considerably. The introduction of 5G technology in most parts of Europe is expected to be a considerable driver for the electronics industry. New mobile phones, laptops, and other electronic product launches with 5G technology would mean considerable growth for the semiconductor industry. According to GSMA, 5G adoption is expected to reach a peak in 2022, and by 2025, there will be 276 million 5G connections in the region.
Europe now plans to introduce its 6G technology shortly and has started its research for it. Under the Horizon Europe program, the European Commission has set aside €900 million (US$9.6 million) for the Smart Networks and Services project, which will coordinate 6G research and trials. 6G research has caught the interest of several European carriers. The private sector will contribute an equal amount to the Commission's investment, bringing at least €1.8 billion. All these advancements and research are expected to increase the semiconductor market share substantially.
Disruptions in supply
Due to the COVID-19 pandemic, the semiconductor industry faced a massive decline. At the initiation of the pandemic, the industries saw a decrease in the sale of semiconductors, which was followed by a decline in supply. However, due to the initiation of social isolation and remote work, the semiconductor industry saw a huge demand, which led to an imbalance in supply. Semiconductor sales declined worldwide due to the increase in demand and insufficient supply. Companies have been working to fill the gap in this supply and demand. However, semiconductor production is a capital-intensive industry, and it would take time to recoup in the market.
| Report Metric | Details |
|---|---|
| Total Market Size in 2020 | USD 6.32 billion |
| Total Market Size in 2027 | USD 8.19 billion |
| Forecast Unit | Billion |
| Growth Rate | 3.78% |
| Study Period | 2015 to 2027 |
| Historical Data | 2015 to 2018 |
| Base Year | 2019 |
| Forecast Period | 2020 – 2027 |
| Segmentation | Type, Industry Vertical, Countries |
| Geographical Segmentation | United Kingdom, Germany, France, Italy, Others |
| Companies |
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