Global Semiconductor Devices Market

Key Market Insights:

The global semiconductor devices market was valued at USD 630 billion in 2024 and is projected to reach approximately USD 970 billion by 2031, growing at a CAGR of 6.4% during the forecast period. This market encompasses discrete, logic, analog, memory, microcomponents, and optoelectronic devices used across consumer electronics, automotive, telecommunications, industrial automation, and defence applications.

The market is primarily driven by surging demand for advanced chips across AI, cloud computing, IoT, automotive electronics, and 5G infrastructure. Technological innovation, geographic diversification of fabrication hubs, and national-level chip incentive programs are reshaping global semiconductor competitiveness

Latest Trends:

AI-Accelerated Chips, Chiplet Architecture, and Onshoring Drive Innovation

The semiconductor devices industry is witnessing rapid innovation fueled by AI adoption and advanced packaging techniques. AI accelerators—custom-designed chips optimized for machine learning workloads—are gaining traction. Companies like NVIDIA, AMD, and Intel are developing AI-specific GPUs and NPUs, while Google’s TPU v5 and Apple’s Neural Engine showcase proprietary innovation. Another major trend is the rise of chiplet architecture, enabling smaller dies with dedicated functionalities to be packaged into a single system. AMD’s Ryzen processors and Intel’s Meteor Lake exemplify this shift, improving performance and yield.

Supply chain security is pushing chip manufacturing onshore. The U.S. CHIPS and Science Act, along with similar initiatives in the EU, Japan, and India, are incentivizing local foundry investments. TSMC is building new fabs in Arizona, while Samsung is expanding its Texas site. This geographic shift aims to reduce over-reliance on East Asia.

Meanwhile, advanced lithography, especially EUV (Extreme Ultraviolet), is critical to shrinking node sizes below 5nm. ASML leads this space, with clients like Intel, Samsung, and TSMC heavily investing in next-gen photolithography tools.

Driving Factors:

Ubiquity of Semiconductor Applications Across Industries Catalyzes Growth

Semiconductor devices are becoming foundational to every sector undergoing digital transformation. In consumer electronics, demand for smartphones, laptops, and wearables continues to grow. Apple’s in-house M-series chips and Samsung’s Exynos processors highlight the industry’s vertical integration trend.

In automotive, rising adoption of ADAS (Advanced Driver-Assistance Systems), EV powertrains, and infotainment is driving chip demand. Each electric vehicle can contain over 3,000 semiconductors, boosting orders for power electronics, MCUs, and sensors. Tesla, NXP Semiconductors, and Infineon are among major suppliers in this space.

Industrial automation and 5G infrastructure are further expanding semiconductor utility. Factories are deploying edge devices, smart sensors, and PLCs, all powered by chips. Simultaneously, telecom operators are installing 5G radios and base stations requiring high-performance RF chips and signal processors.

Governments globally are investing in semiconductor sovereignty to safeguard supply chains. India’s Semicon India initiative, South Korea’s K-Semiconductor Belt, and the European Chips Act are collectively injecting billions into local fabrication ecosystems—boosting market stability and capacity.

Restraining Factors:

High Capital Requirements and Geopolitical Risk Challenge Scalability

The semiconductor devices industry is one of the most capital-intensive globally. Building a state-of-the-art fabrication plant can cost upwards of USD 15 billion. For example, Intel’s two fabs in Arizona under construction total more than USD 20 billion in investment. Such massive capital requirements pose high barriers for new entrants.

Supply chains are also vulnerable to geopolitical tensions. U.S.-China trade restrictions on chip exports, including bans on advanced chip sales to Chinese firms, have affected major players like NVIDIA and AMD. These tensions also disrupt global access to key equipment and materials.

Segmental Analysis

By Type:

Memory Devices Dominate Due to High Demand in Data Centers and Mobile Devices

Based on type, the global semiconductor devices market is segmented into logic, memory, analog, microcomponents, discrete, and optoelectronics. Memory devices hold the largest share due to their extensive usage in smartphones, PCs, and data centers. Companies like Samsung, SK Hynix, and Micron dominate this segment with DRAM and NAND flash production.

By Technology:

FinFET and EUV Lithography Lead Due to Performance and Scaling Advantages

The technology segment includes planar CMOS, FinFET, SOI, EUV lithography, and 3D packaging. As of 2024, FinFET technology is dominant for nodes below 16nm, used in most high-performance chips. EUV lithography adoption is rising for sub-7nm manufacturing, driven by companies like TSMC and Intel for their next-gen processors.

By End-User:

Consumer Electronics Lead, While Automotive and Industrial Applications Exhibit Fastest Growth

Semiconductors serve industries including consumer electronics, automotive, telecom, industrial, healthcare, and defence. Consumer electronics remains the top end-user, but automotive electronics is growing at over 9% CAGR, with vehicles increasingly resembling computers on wheels.

Regional Insights:

The semiconductor devices market is assessed across North America, Europe, Asia Pacific, Latin America, and the Middle East and Africa.

• Asia-Pacific dominates the market with over 50% share in 2024, driven by manufacturing hubs in Taiwan (TSMC), South Korea (Samsung), and China (SMIC). Japan leads in semiconductor equipment and materials. China’s rapid expansion in foundry and memory capacity is reshaping global dynamics despite geopolitical challenges.
• North America holds a strategic position due to R&D leadership and chip design. The U.S. is home to giants like Intel, AMD, Qualcomm, and NVIDIA. In 2024, the region accounted for ~20% of global production, supported by federal incentives and local foundry expansions.
• Europe remains a key contributor to semiconductor equipment (ASML, Infineon, STMicroelectronics) and automotive chips. The European Chips Act aims to double Europe’s global semiconductor share from 15% to 20% by 2030.
• South America and Middle East & Africa are emerging markets, focusing on semiconductor applications rather than fabrication. Brazil is advancing local design capabilities, while UAE and Israel are investing in chip startups and AI chips for defence and cybersecurity.

Key Industry Insights:

Shift Toward Specialized Chips and Vertical Integration Reshapes Industry Economics

The traditional dominance of general-purpose chips is fading, with demand shifting toward application-specific integrated circuits (ASICs) and system-on-chip (SoC) designs. This trend is especially prominent in AI, automotive, and 5G markets. Companies are customizing chips to meet specific workloads, increasing efficiency and lowering power consumption.

Vertical integration is rising, with firms like Apple, Google, and Tesla developing in-house chip capabilities to reduce dependency on third parties. This shift enhances control over performance, IP, and supply chains. In parallel, fabless-foundry collaborations are strengthening—e.g., AMD and TSMC’s 5nm processors for gaming and AI applications.

Key Industry Players:

• Intel Corporation (U.S.)
• Taiwan Semiconductor Manufacturing Company (TSMC) (Taiwan)
• Samsung Electronics (South Korea)
• Qualcomm Incorporated (U.S.)
• NVIDIA Corporation (U.S.)
• Micron Technology (U.S.)
• SK Hynix Inc. (South Korea)
• Broadcom Inc. (U.S.)
• Texas Instruments (U.S.)
• STMicroelectronics (Switzerland)

Key Developments:

• April 2025: Cyient, a global leader in engineering and technology solutions, has launched its new wholly owned subsidiary, Cyient Semiconductors. This strategic initiative reinforces the company’s dedication to advancing innovation and delivering high-performance solutions within the global semiconductor industry. Leveraging Cyient’s established capabilities in semiconductor design, the new entity will concentrate on expanding turnkey Application-Specific Integrated Circuit (ASIC) solutions tailored to meet the evolving needs of its customers.
• September 2024: Mitsubishi Electric Corporation announced that its Power Device Works’ Fukuyama Factory had commenced large-scale production of power semiconductor chips using 12-inch silicon (Si) wafers for integration into semiconductor modules. The advanced silicon-based power semiconductor modules were initially deployed in consumer electronic products.