The system-on-chip market is projected to grow at a CAGR of 7.55% to reach US$151.422 billion by 2026, from US$90.001 billion in 2019. A system on a chip (SoC) is an integrated circuit (IC) that includes several electronic parts such as central processing unit (CPU), input and output ports (I/O Ports), internal memory, analog input, output blocks, and others in the circuit. All these components are fit into a single, very small-sized chip for the convenience of the user. The major factors driving the demand for system-on-chip solutions are increasing the need for compact ICs and budding demand for power-efficient and user-friendly devices. In addition, these chips can be used in multiple applications such as signal processing, wireless communication, etc. Also, the high adoption of the internet of things (IoT) solutions including automotive, communications and technology, and healthcare among many other industries will further add to the growing demand for SoC solutions during the forecast period.
Moreover, the increasing demand for SoC in smartphones, globally due to the rising disposable income and growing purchasing power will contribute to the market growth. According to Bankmycell, 2021, the total number of people who own a smartphone was 4.88 billion, which is 62.07% of the world’s total population, the number is further expected to surge every year which in turn will accelerate the demand for SoC in the market. The new generation of systems on chip products integrates the CPU, RAM, and storage components of a computer. The result is a computer (or digital device) that is faster and has much more computing power. It’s also able to run many different applications at once (digital device) or pages on a browser at once (computer.). Furthermore, the technological advancements and modernization in the production of SoC, coupled with the research and developments taking place in this field such as the improved SoC integrates the CPU, RAM, and storage components of a computer which makes it much faster and more efficient which will further strengthen the market growth over the next few years. The key market players are also creating innovative products to cater to the increasing demand across industries. In March 2021, Samsung Electronics partnered with Marvell to jointly develop a novel System-on-a-Chip to offer enhanced 5G network performance.
system-on-chip Market, US$ billion, 2019 to 2026
Source: Knowledge Sourcing Intelligence Analysis
By type, the digital segment is estimated to hold a dominant market share owing to the increasing use of computers, and electronic devices. By industry vertical, the consumer electronics industry is expected to hold a significant market share due to the surging demand for electronic devices across the globe. Geographically, North American and European regions held a significant market share in 2019 owing to the presence of various vendors offering varied services and early adoption of technology across industry verticals. Asia Pacific region is expected to grow at a substantial rate on account of technological integration in manufacturing facilities and favorable government policies promoting the set-up of new manufacturing and research facilities.
system-on-chip Market share, by geography
Source: Knowledge Sourcing Intelligence Analysis
The constantly increasing demand for smart and power-efficient electronic devices globally will drive the market growth of the SoC market during the forecast period. Due to rapid industrialization, the disposable income of people has been on a rise, which in turn has surged their purchasing power, which has encouraged them to lead a better life. Thus, there has been a steady surge in the demand for consumer electronics, especially for smart electronics such as smartphones, fitness bands, smartwatches, speakers, etc. across the globe, which will increase the demand for SoC’s in the market.
The initial development cost of the SoC’s is high as the IC needs to be well integrated to be able to perform efficiently. The smaller the SC, the higher will be the cost. The high initial costs may restrain the market growth as it will be difficult for the small market players to bear this cost.
The Covid-19 pandemic negatively impacted the SoC market, as due to the nationwide lockdown, the operations of many businesses were shut down which resulted in a mass shortage of the raw materials required to make these chips. Also, the manufacturing operations of several industries such as automotive, consumer electronics, etc. were temporarily suspended which declined the demand for SoC’s in the market. However, with the ease of restrictions, the market is expected to rebound during the forecast period.
The market leaders for the SoC market consist of Taiwan Semiconductor Manufacturing Company, Limited, Arm Limited, United Microelectronics Corporation, NXP Semiconductors N.V, Qualcomm Technologies, Inc., Toshiba Electronic Devices and Storage Corporation, Intel Corporation, STMicroelectronics, Broadcom, Inc., and Infineon Technologies AG. The key players in the market implement growth strategies such as product launches, mergers, and acquisitions, etc. to gain a competitive advantage over their competitors. For instance, in July 2021, Taiwan Semiconductor Manufacturing Company, Limited, has announced its plan to build new factories in the United States and Japan to meet the increasing demand for sustained chips in the market.
|Market size value in 2019||US$90.001 billion|
|Market size value in 2026||US$151.422 billion|
|Growth Rate||CAGR of 7.55% from 2019 to 2026|
|Forecast Unit (Value)||USD Billion|
|Segments covered||Component, Industry Type, Industry Vertical, And Geography|
|Regions covered||North America, South America, Europe, Middle East and Africa, Asia Pacific|
|Companies covered||Arm Limited, United Microelectronics Corporation, NXP Semiconductors N.V, Qualcomm Technologies, Inc., Toshiba Electronic Devices and Storage Corporation, Intel Corporation, STMicroelectronics, Broadcom, Inc., Infineon Technologies AG|
|Customization scope||Free report customization with purchase|
Frequently Asked Questions (FAQs)
Q1. What will be the system-on-chip market size by 2026?
A1. The system-on-chip market is projected to reach a total market size of US$151.422 billion in 2026.
Q2. What are the growth prospects for the system-on-chip market?
A2. The global system-on-chip market is projected to grow at a CAGR of 7.55% during the forecast period.
Q3. What is the size of global system-on-chip market?
A3. System-On-Chip Market was valued at US$90.001 billion in 2019.
Q4. Which region holds the largest market share in the system-on-chip market?
A4. Geographically, North American and European regions held a significant share in the system-on-chip market owing to the presence of various vendors offering varied services and early adoption of technology across industry verticals.
Q5. What factors are anticipated to drive the system-on-chip market growth?
A5. The major factors driving the demand for system-on-chip solutions are increasing the need for compact ICs and budding demand for power-efficient and user-friendly devices.
Taiwan Semiconductor Manufacturing Company, Limited
United Microelectronics Corporation
NXP Semiconductors N.V
Qualcomm Technologies, Inc.
Toshiba Electronic Devices and Storage Corporation
Infineon Technologies AG
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