Middle East & Africa Semiconductor Materials Market Outlook, 2029

The Middle East and Africa (MEA) semiconductor materials market outlook is projected to be one of exclusivity and rapid growth, driven by several factors that would notably expand it within the years to come. Some of these factors are increasing technological investments, rising industrialization, and government initiatives of this region that drive the demand for advanced semiconductor materials used in a host of applications. There are large economic disparities between its member countries.

While some of the Gulf countries enjoy large budgets and established semiconductor manufacturing infrastructure, many African countries are much less well-endowed with resources and lack significant technological infrastructure, making it therefore a challenging market to operate in for semiconductor material suppliers. A major unique feature of the MEA market is the presence of a large unserved rural population. Most of the remote areas lack proper technological facilities, leaving aside the advanced semiconductor materials.

The whole situation portrays the need for innovative solutions like mobile manufacturing units and localized technology solutions so that this gap can be met and critical semiconductor materials are availed on time to such areas. Governments within the MEA region are increasingly recognizing the need to strengthen their technology infrastructure. This is beginning to reflect in investments for research and development, technology hubs, and training engineers and researchers. This focus on technological advancement further bumps up demand for semiconductor materials such as silicon wafers, photoresists, and specialty gases. An interesting development in the MEA market is the growth of local manufacturing.

Realizing the potential in this and not desiring to lose the opportunities given, some regional governments encourage domestic production facilities for semiconductor materials to establish a presence within their countries. This would address not only economic development but improve the affordability and accessibility of critical semiconductor materials. It can further be tailored to the specific needs and issues of the region in local production - for instance, by developing materials that can resist extreme environmental conditions or function with only limited resource availability.

According to the report, the Middle-East & Africa semiconductor materials market is anticipated to grow at more than 4% CAGR from 2024 to 2029. Most MEA countries are highly import-dependent for their semiconductor materials requirements, and a large portion of these imports come from established manufacturers based in Europe and North America. Global supply chains were hit by the pandemic, increasing the arguments in favor of a strategy of reduced import dependency. In recent developments, more than one MEA government has moved to prioritize domestic manufacturing capability development for semiconductor materials.

It encompasses the strategies to encourage FDI in the production of semiconductors and local productions through subsidies and breaks on tax. These strategies of encouraging more local production open another opportunity for the MEA semiconductor materials market. Apart from a substitute for import growth, regional production of devices specifically designed for extreme temperatures can be a more region-based solution. This growth of domestic manufacturing has an impact on the type of sales channels that are at play in the MEA semiconductor materials market. The market has, since time immemorial, been dominated by established international distributors who have a strong regional wealth network.

The growth in domestic manufacturing might mean the potential for a diversified sales network. Local distributors grounded in the regulations within the region and networks established will be able to bridge the gap between domestic manufacturers of semiconductor materials, and technology companies or other related institutions. In addition, the growing prevalence of e-commerce platforms across MEA offers a possible alternative sales outlet for semiconductor materials, particularly those materials that are less complex in nature.

Market Drivers

• Investment in Smart Cities: The MEA region is investing heavily in smart city projects, particularly in the UAE and Saudi Arabia. These initiatives aim to develop intelligent urban infrastructure with integrated IoT systems, advanced communication networks, and sustainable technologies. The demand for semiconductor materials used in IoT devices, sensors, and communication equipment is growing as these countries strive to become global leaders in smart city development.
• Growing Tech Start-up Ecosystem: The rise of tech start-ups in countries like Israel and the UAE is fueling demand for advanced semiconductor materials. These start-ups focus on cutting-edge technologies such as semiconductor materials, AI, biotech, and advanced manufacturing, all of which rely on high-performance semiconductor materials.

Market Challenges

• Lack of Skilled Workforce: The MEA region faces a shortage of skilled professionals in semiconductor technology, including materials science and engineering. Limited local expertise hampers the development and scaling of the semiconductor materials market, necessitating reliance on foreign talent and international collaborations. Addressing this skill gap requires investments in education, training programs, and initiatives to cultivate local talent in advanced technologies.
• Geopolitical Instability: Geopolitical tensions and conflicts in parts of the MEA region pose significant risks to the semiconductor materials market. These challenges can disrupt supply chains, deter foreign investments, and create an uncertain business environment. Political instability, regulatory changes, and security concerns impact market stability and hinder long-term growth prospects.

Market Trends

• Adoption of Renewable Energy: The MEA region is accelerating the adoption of renewable energy sources, including solar and wind power. This shift towards sustainable energy solutions drives demand for semiconductor materials used in energy conversion and storage systems. Advanced materials such as silicon for photovoltaic cells and gallium arsenide for high-efficiency solar panels are crucial for supporting the region's renewable energy ambitions.
• Government-led Technological Initiatives: Governments in the MEA region are spearheading technological advancements and investments in semiconductor materials. Initiatives like Saudi Arabia's Vision 2030 and the UAE's National Innovation Strategy aim to diversify economies and promote technological innovation. These policies support the development of local semiconductor manufacturing capabilities, foster R&D collaborations, and attract foreign investments in high-tech industries.

The fabrication segment in the semiconductor materials market is leading in the MEA region due to their government investments in technology infrastructure and establishing new fabrication facilities to diversify the local economies and reduce their dependence on imports.

It is the case that governments in countries like the United Arab Emirates, Saudi Arabia, and Israel have been pursuing a spate of initiatives concerning the semiconductor industry within the MEA region. These include foreign investments, building relevant technology infrastructure, and developing local talent pools to set up sustainable semiconductor ecosystems. For example, the UAE has established Abu Dhabi-based GlobalFoundries, one of the largest semiconductor foundries in the world, which provided an avenue for the growth in the semiconductor materials market to spread in the region.

Similarly, Saudi Arabia announced plans for the development of a national semiconductor industry as part of its Vision 2030 to diversify its economy and create high-tech jobs. Nicknamed the "Startup Nation," Israel has a large technology sector with a strong focus on semiconductors. A number of semiconductor companies are located within its borders, including Tower Semiconductor, specializing in analog fabrication processes. With the government of Israel incentivizing R&D and neighborhood campuses, cooperation has been extremely helpful between the scientific community and industry for the development of fabrication technologies, thus feeding the semiconductor materials market growth in the MEA region.

Among all the applications, consumer electronics has been occupying the leading position in the semiconductor materials market in the MEA region, driven by the rapid adoption of digital technologies coupled with the fast-growing middle class and subsequent rise in disposable incomes in the region.

Demand from the consumer electronics industry is driving the semiconductor materials market in the Middle East and Africa, impelled by the rapid adoption of digital technologies and an expansive middle class with improving disposable incomes. Digital transformation across the MEA region is resulting in increased penetration of smartphones, tablets, and other types of consumer electronics. This growth is impelled by a youthful population thirsting to apply new technologies that could increase the demand for advanced semiconductor materials used in the making of these devices. Private sectors, together with governments in the region, are massively investing in improving digital infrastructure, making consumer electronics widespread.

For instance, the United Arab Emirates and Saudi Arabia are among the Gulf States with prominent smart city initiatives and digital economies that need a host of consumer electronics powered by high-performance semiconductors. The investments underline a good market for semiconductor materials such as silicon, GaAs, and SiC in ensuring efficient and reliable electronic devices. Increasingly, the rising middle class in MEA combines growing purchasing power with a growing appetite for the latest consumer electronics. This demographic shift brings to the fore higher sales in smartphones, smart home devices, and other personal electronics - all of which depend on advanced semiconductor materials to function effectively.

Local manufacturing in MEA is under way; it focuses on investments in semiconductor fabrication facilities and partnerships with worldwide technology companies. This makes for a stronger supply chain in semiconductor elements to serve the rising demand in this segment of the consumer electronics market. Educational initiatives aimed at developing a pool of skilled manpower in semiconductor technology support such ambitions to make the region one of the largest markets in the industry.

The South Africa spearhead leadership in the semiconductor material market is due to Its strategic position on the global supply chain, rich mineral resources, and increasing investment in technological infrastructure have easily paved the way.

The Semiconductor Materials Market has recently drawn attention to the country due to several strategic advantages that will make South Africa one of the key countries in this global landscape. A very important variable strategically positioning South Africa in the global supply chain for critical minerals confers leadership on this country. It has potential reserves of minerals used for semiconductor materials, particularly platinum group metals, rare earth elements, and other specialty metals - this all being very important material for the manufacture of semiconductor wafers, materials used in advanced packaging for parts, and electronic components.

For example, South Africa is the largest supplier of platinum, one of the critical materials applied in a wide range of semiconductor-related applications, including use as catalysts for chemical vapor deposition processes for semiconductors. Having access to such critical minerals means the country can make high-quality semiconductor materials at compliant levels, thereby effectively competing in the global markets. South Africa is a strategic geographical location that creates some logistical advantages in trade and distribution operations within Africa and across borders.

It facilitates the effective export of semiconductor raw materials to international markets with its well-resourced ports and transport infrastructure, proving its place in the global supply chain. The existence of initiatives, such as the South African Nanotechnology Initiative and joint efforts of universities, research institutions, and industry players, creates an enabling environment for research and development in semiconductor materials. These are efforts to build capacities for the manufacture of semiconductors locally, promote technology innovation, and draw in foreign investments. Increasingly, the country is researching ' green' manufacturing techniques for semiconductors while finding more sustainable ways of extracting the dissolved minerals inside them - in step with global trends toward green technology and circular economy values.

Years considered in this report:

• Historic year: 2018
• Base year: 2023
• Estimated year: 2024
• Forecast year: 2029

Aspects covered in the report:

• Semiconductor Materials market outlook with its value and forecast, along with its segments
• Various drivers and challenges
• On-going trends and developments
• Top profiled companies
• Strategic recommendation

By Application:

• Fabrication
• Packaging

By End-User:

• Consumer Electronics
• Telecommunication
• Manufacturing
• Automotive
• Energy and Utility
• Others

The approach of the report:

This report consists of a combined approach of primary and secondary research. Initially, secondary research was used to get an understanding of the market and list the companies that are present in it. The secondary research consists of third-party sources such as press releases, annual reports of companies, and government-generated reports and databases. After gathering the data from secondary sources, primary research was conducted by conducting telephone interviews with the leading players about how the market is functioning and then conducting trade calls with dealers and distributors of the market. After this, the research team made primary calls to consumers by equally segmenting them in regional aspects, tier aspects, age group, and gender. Once the research team attained the primary data, they verified the details obtained from secondary sources.

Intended Audience

This report can be useful to industry consultants, manufacturers, suppliers, associations, and organizations related to the Semiconductor Materials industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing and presentations, it will also increase competitive knowledge about the industry.