South America Logic Semiconductor Market - Forecasts from 2022 to 2027

The South American logic semiconductor market is projected to grow at a CAGR of 2.79% during the forecast period to reach US$3.917 billion by 2027, from US$3.231 billion in 2020. Logic semiconductors are primarily used to assess, monitor, and control electronic devices' operations by processing digital data. Small microelectronic circuits, also known as logic gates, are generally 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, communication, consumer electronics, and manufacturing industries. The logic semiconductor market's growth depends on such industries. The increase in trend in digitalization, the advent of 5G, AI, and IoTs 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 semiconductors 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. According to a Pew Research Centre survey and analysis conducted in 2019, approximately sixty percent of the Brazilian population owned a smartphone in 2018.  With the rebound in the country's economic growth in 2021, this number is expected to grow even more

Besides, it is indisputable that cyber-physical systems and IoTs 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 worldwide. The emergence of 5G has further resulted in the adoption of smartphones and devices enabled with 5G. 5G has already penetrated into South American countries like Brazil, Uruguay, Colombia, and Chile in 2021. This, in turn, would lead to a rise in the demand for semiconductors in the market. 

Furthermore, the increase in the growth of the automotive sector in the country is also furthering the growth of semiconductors. According to ANFAVEA (Associação Nacional dos Fabricantes de Veículos Automotores), a local automaker's association, the Brazilian automotive sector showed continuous encouraging sales and production in October 2020. Due to the recovery of neighbouring countries, Brazil's exports also saw an increase in the sector. Almost 35,000 vehicles were exported in the month of October, and an increase of 14.3% was seen compared to the previous month. By 2021, the country will be ranked eighth in the world, with 2,248,300 units of heavy and light vehicles sold, representing an 11.6% increase over the previous year. Rapid growth in technological innovation, fierce competition among various competitors, and their respective strategic development measures are bound to propel the market size of logic semiconductors in South America during the forecasted period.

As the semiconductor industry is entering into a new growth cycle, fuelled by automation, in-vehicle electronics,  artificial intelligence and IoT devices, cloud processing, and 5G, making the planet more sustainable and smarter, several companies are moving up a gear by formulating and deploying several strategies. The strategic developments and increasing production capacities by the leading companies to expand the market are expected to increase the market's sales in the forecasted period. For instance, at the end of March 2022, Smart Modular Technologies Brazil, a semiconductor manufacturing company, stated that new manufacturing facilities would be built and upgraded in the country. The country's objective was to increase production to meet the demands of the domestic market and export its product to other countries. To focus on research and development, the company also has a research and development facility in Brazil in partnership with a research organization, Eldorado. With the increase in the market for IoTs, several companies have begun began to expand their products to enter the market. For instance, in 2019, HT Micron, a Brazilian semiconductor company, launched a new product in their portfolio-SiP (System in package) iMCP HTLRBL32L. This novel product offered the integration of advanced multi-component integrated circuit packaging technologies. Similar strategies, research, and developments by several companies are expected to increase the growth of the semiconductor market size in the forecasted period.

COVID-19 Insights

The outbreak of COVID-19 has disrupted the semiconductor market and the country's overall economy. Brazil was also the second country globally to record the most deaths after the US. The decrease in staffing and transport restrictions, such as decreased availability of air transport and strict border controls, impacted several companies' ability to meet the delivery deadlines and saw decreased and canceled 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.

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

• Brazil
• Argentina
• Others