Europe Semi-conductors Market Outlook, 2029

The worldwide competition for technology is intensifying. Furthermore, Europe does not wish to fall behind. The eagerly awaited European Chips Act went into effect in coming years. The goal of this ambitious legislative package is to make Europe more competitive globally in this vital industry by fortifying its semiconductor supply chain. The organization that represents the European semiconductor industry to European institutions is called the European Semiconductor Industry Association, or ESIA.

Improved energy efficiency and performance are made possible by semiconductor products, which are essential for a wide range of commonplace technological applications in society. Through creative solutions in business, transportation, healthcare, and consumer electronics, they help address global issues and bring about constructive social change. Chips are necessary for many electronic and technological items, including electronics, automobiles, and home appliances. Enhancing Europe's semiconductor ecosystem is the goal of the EU Chips Act. The European Chips Act provides a framework for actions aimed at bolstering the semiconductor industry in Europe.

Three pillars support the Chips Act: the 'Chips for Europe Initiative,' which promotes extensive technological innovation and capacity building; a structure that guarantees supply security and resilience by drawing in more capital a crisis response and monitoring system designed to foresee shortages and synchronize operations during emergencies.

According to the research report 'Europe Semiconductor Market Outlook, 2029', the Europe Semiconductor Market was valued more than USD 50 billion in 2023. Europe is proud to be home to top-tier semiconductor producers like Soitec, NXP, X-FAB, Infineon, STMicroelectronics, and Nexperia, to name a few. Consider STMicroelectronics and Infineon, whose silicon carbide (SiC) devices and power modules power electric vehicles (EVs) today, or NXP's position in the automotive industry. In some areas, they are also leading the market.

While Europe excels in discrete and smart power technologies as well as microcontrollers, it falls short in the manufacturing of logic and memory devices for the consumer market, which includes PCs, mobile phones, gaming consoles, and other gadgets. Since the automotive and industrial sectors are actually Europe's primary manufacturing clusters, semiconductors are primarily made to support these sectors' supply chains.

Major Drivers

High demand coming from the auto sector : In Europe, the automobile industry is the one that uses semiconductors the most. This is because cars are getting more and more complicated. They have electric motors, infotainment systems, and driver assistance systems, among other electronic features. These include functions that rely on sophisticated algorithms and semiconductor-powered sensors, such as automated emergency braking, blind spot detection, and lane departure warning. For seamless operation, powerful chips are necessary in touchscreens, navigation systems, and even in-car entertainment systems. Specialized semiconductors are needed to regulate power electronics, electric motors, and battery management in the transition to electric and hybrid vehicles.

Industrial automation is being adopted more widely : Factories and other industrial facilities require more robots, sensors, and semiconductor-based technology as they automate more of their processes. Chips made especially for industrial use are becoming more and more in demand as a result. Industrial automation equipment must be able to perform complicated tasks and function in difficult settings. This means that compared to consumer electronics, the semiconductors utilized in this equipment must be more potent and efficient. A network of interconnected industrial devices that gather and exchange data is known as the IIoT. This information can be utilized to streamline production procedures, forecast maintenance requirements, and increase efficiency. The need for semiconductors is rising as the IIoT expands because each device needs its own chips to process and transmit data

style='color:orange'>Major Challenges

Limited Ability to Produce : Currently, Europe lacks enough fabrication capacity, especially for sophisticated chips. The majority of European chip manufacturing concentrates on more established technologies and simpler parts. Europe is susceptible to supply chain disruptions and geopolitical conflicts due to its reliance on imports for cutting-edge chips. Production capacity in the semiconductor industry refers to the availability of manufacturing facilities (fabs) and their capability to generate chips. Europe's limited capacity refers to the lack of fabs or the lack of advancement in their capacities to meet the demand for different types of chips.

Elevated Production Expenses Europe's production costs are greater than those of Asian nations like China and Taiwan because of things like labour expenses, energy prices, and environmental laws. Because of this, European chip manufacturers find it difficult to compete with Asian producers on pricing. Chip fab operating costs are higher in Europe because to the general higher energy costs compared to Asia. Even if wages in Europe are now more competitive than in several Asian nations, they are still generally higher. Strict environmental laws in Europe may need further expenditures for pollution control technologies, increasing the cost of production. European businesses may find it difficult to land contracts and may even fall behind Asian rivals that sell chips for less money.

Based on the Device type, the market is divided into Memory Device, Logic Semiconductors, Microprocessor Unit, Analog IC, Opto Semiconductor, Discrete Semiconductor, Power Semiconductor, Micro Controller Unit, Digital Signal Processors, and Semiconductor Sensors.

Large datasets and intricate algorithms are frequently needed for AI and ML applications, which raise the need for high-capacity and high-performance memory solutions. The need for cutting-edge memory technologies is generated by European research and development in these areas. The risk associated with obtaining critical semiconductors only from Asian vendors was brought to light by the recent worldwide chip shortage.

Due to the fact that memory devices are essential to a vast array of electronic applications, this has led the European Union to invest in domestic chip production. Large volumes of memory are needed for data processing and storage due to the proliferation of linked devices in the Internet of Things ecosystem, from industrial sensors and connected cars to smart homes and wearables. This significantly increases the need for DRAM, NAND Flash, and embedded memory, among other types of memory devices.

Based on the Application, the market is divided Networking & Communications, Data Centre/ Data Processing, Consumer Electronics, Industrial, Automotive, Government, Healthcare, Aerospace and Defence, Others.

The automotive industry is a major source of demand for semiconductors in Europe. The automotive sector is undergoing a change with the shift towards electric and hybrid vehicles, leading to a significant demand for specialist semiconductors. Electric motors, battery management systems, and power electronics are all powered by these chips, which are essential for reliable and secure operation. The adoption rate of EVs is being further accelerated by the lucrative incentives that many European governments are providing for EV sales. This results in a rise in the market demand for automobiles and the semiconductors that power them.

The European semiconductor industry depends heavily on German semiconductor production, which is among the best in the world. In terms of equipment, materials, and components across the whole value chain, the country boasts an unparalleled concentration of leading international device manufacturers and suppliers. The 'oil of the twenty-first century,' as it were, is semiconductors, or electronic chips, which are required for everything from wind turbines and missiles to electric cars and cell phones. The semiconductor industry is a subsector of the electrical industry that deals with semiconductor manufacturing. Electronic devices use these solid, electrically conducting materials.

An increasing number of large-scale investment ventures are being attracted by Germany's ambitions to become the world leader in chip manufacturing. The UK is a global leader in the domains of intellectual property, compound semiconductors, advanced packaging, and semiconductor chip design. The country is in a good position to shape the direction of semiconductor technology going forward because of its experience. A national strategy outlining a goal to enhance UK expertise and strengthen the UK's position in global semiconductor supply chains is entirely appropriate.

The UK Strategy stands out in part because it favours alternative opportunities over large-scale silicon manufacturing, instead choosing to leverage the nation's strong foundations and innovative heritage in the semiconductor industry. The French semiconductor market is in a difficult situation. It has many qualities and possibilities, but it also has issues that keep it from expanding as quickly as other big businesses. Many innovative semiconductor technology companies, including Melexis and Soitec, are based in France.

French businesses are particularly successful in a few specialized industries, such as power electronics, analog chips, and MEMS (microelectromechanical systems). Plan 'France 2030' aims to strengthen France's scientific independence and industrial sovereignty, particularly in important sectors as semiconductors. France is mostly dependent on Asian suppliers since it lacks large-scale wafer production facilities. As a result, there is less competition and more reliance. Semiconductors are the tiny, ubiquitous electronics that power our modern world, and demand for them is rising globally.

In the middle of this surge, Spain, which was formerly a quiet corner of the silicon landscape, is swiftly emerging as a rising star. With the global shortage of chips, government initiatives, and industry innovation, the Spanish semiconductor market is set up for a remarkable increase. A number of Spanish companies are starting to gain recognition in the semiconductor industry. Wiyo, often known as Yocto Technologies, is a prominent competitor that specializes in creating high-performance microcontrollers for usage in industrial environments.

The Europe semiconductor market is extremely competitive, with significant industry players driving innovation, technological improvements, and market expansion. Leading semiconductor manufacturers, like Intel Corporation, Samsung Electronics Co., Ltd., and Taiwan Semiconductor Manufacturing Company (TSMC), play important roles by using their considerable production capabilities and expertise in developing innovative semiconductor components. Furthermore, Qualcomm, NVIDIA, and AMD are major players in specific categories, such as mobile processors, graphics processing units (GPUs), and other specialized devices.

The business also sees collaboration and partnerships, with companies forging strategic alliances to boost R&D efforts and meet changing market demands. As the market continues to evolve with the rise of upcoming technologies such as 5G, artificial intelligence, and the Internet of Things, competition intensifies, prompting companies to invest in talent, research, and cutting-edge manufacturing processes to maintain a competitive edge in this dynamic and rapidly evolving landscape.

Considered in this report

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

Aspects covered in this report

• Semiconductor 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 Device type

• Memory Device
• Logic Semiconductors
• Microprocessor Unit
• Analog IC
• Op to Semiconductor
• Discrete Semiconductor
• Power Semiconductor
• Micro Controller Unit
• Digital Signal Processors
• Semiconductor Sensors

By Application

• Networking & Communications
• Data Centre/ Data Processing
• Consumer Electronics
• Industrial
• Automotive
• Government
• Healthcare
• Aerospace and Defence
• 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. Post this; we have started making primary calls to consumers by equally segmenting them in regional aspects, tier aspects, age group, and gender. Once we have primary data with us, we can start verifying 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 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.


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