Asia Pacific Logic Semiconductor Market - Forecasts from 2022 to 2027

The Asia-Pacific logic semiconductor market is projected to grow at a CAGR of 4.85% during the forecast period to reach US$105.582 billion by 2027, from US$75.781 billion in 2020. Logic semiconductors are used to assess and control electronic devices' operations by processing digital data. Small microelectronic circuits, also known as logic gates, are commonly used to construct digital circuits to produce combinational logic. Such logic chips could be found in almost all digital products, like mobiles and arithmetic logic units. Logic semiconductors are heavily used in the automotive and electronic industries. Moreover, the logic semiconductor market's growth depends on the industries mentioned above. With the presence of major economies in the region, Asia Pacific is expected to dominate the market. The increase in the trend of digitalization is anticipated to further augment the industry's growth in the forecasted period.



Changing Trends - Increasing use of electronic devices with ALUs is expected to propel the logic semiconductor market.

In recent years, the consumer electronics industry has been steadily expanding and evolving in the last few years. Rising income, advancing technologies, and better Internet connectivity are responsible for increasing the penetration of electronic devices in the industry. This increasing demand is bound to impact the market size positively. Consumer electronics are being extensively used in several fields, from laptops, mobiles, ear pods, smartwatches, and smartphones to smart household devices such as washing machines, air conditioners, and many more.

Besides, it is irrefutable that cyber-physical systems and the IoT blur the boundaries between the digital and physical worlds. The advent of autonomous vehicles, medical systems, robotics, and smart grids has drastically changed the lifestyles of many across the globe. According to Oracle, there are currently about ten billion IoT sensors, which is expected to increase to 22 billion by 2025. For instance, in July 2021, the Seoul Metropolitan Government announced that its city-wide IoT public network is estimated to be finished by 2023. The aim of this IoT network is to provide and support public services like shared parking, smart street lights, and so on through IoT sensors. Furthermore, recently, a  low-range-based trunk network spanning 421 km has been deployed. A total of 1000 low-range IoT base stations have been installed in various public buildings, transforming the city into a smart city.  The emergence of 5G has further resulted in the adoption of smartphones and devices enabled with 5G. In Asia Pacific, some countries have already adopted the new network, while a few others are still in testing phases. South Korea was the first to employ 5G in their networks in the region, with China and Japan closely following. As for the Southern-eastern countries in the region, Indonesia, Singapore, and Malaysia have either begun their trial phases or are at the end of them.

The emergence of major economies in the Asia Pacific is anticipated to steadily propel the logic semiconductor market in the forecasted period.

 An increase in government support, wide market availability, and increasing investments in research and development are contributing factors to the emergence of South Korea, Japan, China, and Taiwan as the 'Big four' in the Asia-Pacific region. And the four countries house different semiconductor giants. According to the European Semiconductor Association, in December 2021, of the US$ 50.095 billion, Asia-Pacific alone generated about US$ 30.326 billion of sales. Among the four countries, South Korea is in a dominant position, with Samsung, a South-Korean-based semiconductor powerhouse, at the market's core. While Japan's strength lies in its raw materials and equipment. Japan is capable of creating highly-demanded pure semiconductors. Taiwan is a manufacturing powerhouse for semiconductors. It had the world's most advanced manufacturing process technology in the semiconductor industry. As semiconductors are entering into a new growth cycle, boosted by in-vehicle electronics,  artificial intelligence, IoT devices, automation, cloud processing, and 5G, making the planet more sustainable and more innovative, several companies are moving up a gear by formulating and deploying several strategies. The strategic acquisition by the leading companies to expand the market is expected to increase the market's sales in the projected period. For instance, in February 2022, Foxconn, a Taiwanese electronic manufacturing company, announced its plans to collaborate with Vedanta Limited to build a chip company in India, where Foxconn will be investing about US$ 118.7 million. Amid a chip shortage globally, Samsung publicized its plans to triple its foundry production capacity by 2026 in October 2021. As reported by the company, with the surge in demand for semiconductors, Samsung managed to increase its net profits by  31% in the third quarter of 2021.

Furthermore, in March 2022, the three semiconductor powerhouses, Intel, Samsung, TMSC, and other stakeholders such as Qualcomm, ARM, and Microsoft, decided to form a consortium, where they work on packaging and stacking next-generation advanced chips according to the industrial standard. The countries are steadily gearing up to expand the semiconductor industries in their respective countries. For instance, at the end of 2021, the Indian government and Taiwan negotiated plans to set up a semiconductor facility in India worth US$ 7.5 billion, and the plant is expected to supply various products, from 5G devices to electric cars.        

Covid-19 Insights

The outbreak of COVID-19 and the subsequent containment measures caused economic and financial disruption in the semiconductor industry. During the first half of 2020, many manufacturing companies and facilities were closed due to mandated lockdowns across the globe. The decrease in staffing and transport restrictions, such as decreased availability of air transport, strict border controls, and port closures, impacted several companies' ability to meet the delivery deadlines and saw decreased or cancelled orders. The lack of human resources further slowed down several companies' strategic plans. At the same time, social distancing and several other factors slowed down the companies' efficiency. Nonetheless, the semiconductor market saw an increase in demand post-pandemic due to the surging demand for automation and several other factors. 

Market Segmentation:

By Type

• Special Purpose Logic
• Display Drivers
• General Purpose Logic
• Application Specific Integrated Circuit
• Programmable Logic Device

By Industry Vertical

• Communication
• Consumer Electronics
• Automotive
• Manufacturing

By Countries

• China
• South Korea
• Japan
• Taiwan
• Others