Digital Integrated Circuit (IC) Market Size & Share, by Type (Logic ICs, Memory Chips, Micro Components); End user - Global Supply & Demand Analysis, Growth Forecasts, Statistics Report 2025-2037

Growth Drivers

• Technological advancements in the automobile industry: The automotive industry has rapidly advanced with technologies like 3D mapping applications, electric vehicles, and automobile automation. This has led to an increased demand for advanced semiconductors such as sensors, memory chips, and types of ICs. The developments of passenger vehicles and the need for safety features are increasing the demand for automotive integrated circuits. The shift toward electric vehicles is another major trend, as these vehicles require semiconductors for managing batteries. For instance, with the development of EVs, the demand for power electronics is also rising, positively impacting the digital integrated circuit (IC) market.
  
  Semiconductors are also used in car touch screens and entertainment systems. As vehicles become more automated and sophisticated, ICs will be increasingly used in onboard systems. Nowadays, semiconductors power everything in vehicles from entertainment systems to battery management. Innovations are enabling demanding applications like AI-powered systems to run efficiently.
• Emergence of the Internet of Things (IoT): The growth of technology has made AI more common in industries like automotive, healthcare, and consumer electronics. This has increased the need for specialized integrated circuits designed for tasks like machine learning. The growing use of IoT devices is a major factor in the demand for low-power, efficient ICs. Since IoT devices rely on batteries, they require ICs that use minimal power while working efficiently. Further, companies making IoT devices are teaming up with industry leaders to improve product quality and performance. For instance, in March 2024, Kudelski an IoT solutions provider partnered with Infineon, a semiconductor leader to create a secure, certified solution for smart home devices.
• Rapid development of 5G technology: 5G, the fifth-generation mobile network is designed to offer faster data speed, ultra-low delay, better reliability and network capacity, greater availability, and a seamless experience for more users. 5G can handle 100 times more traffic efficiently, making it essential for future communication needs. The spread of 5G networks worldwide is also driving growth in the digital IC market. ICs are crucial for managing the massive data flow and reducing delays in 5G systems. The expansion has created new opportunities in the semiconductor industry.
  
  For instance, from 2019 to 2020, the global share of 5 G-enabled smartphones grew from just 1% to 20%. Global 5G connections also hit nearly 2 billion in Q1 2024, with 185 million new users. By 2028, this number could hit 7.7 billion. In North America, 5G adoption is currently at 32%, double the global average, with an 11% growth rate and 22 million new connections. This transition gives rise to the urgent need for next-generation ICs that are capable of supporting the demands of 5G infrastructure, fostering innovation and growth in the industry.

Challenges

• Lack of skilled professionals: The lack of skilled professionals in the digital integrated circuit market can make it very challenging for the manufacturers to enhance the ICs. The designing of various functions into a single integrated circuit is a complicated task. Thus, with the absence of skilled professionals, market growth can be hampered. Further, developing advanced ICs such as smaller nodes (5nm, 3nm), requires significant investment in research and development which can be a barrier for smaller companies.
• Technological complexities: Designing and manufacturing ICs has become increasingly complex due to the push for miniaturization, higher efficiency, and integration of multiple functionalities on a single chip. Chip designers face issues in creating programs that consist of low costs, low power consumption, and yield high performance, and optimal processing. These technological issues restrict the digital IC market's expansion. Furthermore, the production costs for semiconductor manufacturers tend to get high due to the professional and trained workforce required for higher accuracy and precision while making these ICs. These variables significantly affect the expansion of the digital IC market.