The report segments the global system on chip market by type (mixed signal, digital, and analog) and by geography (the Americas, EMEA, and APAC). It provides a detailed illustration of the major factors influencing the market, including drivers, opportunities, trends, and industry-specific challenges.
Here are some key findings of the global system on chip market, according to Technavio hardware and semiconductor researchers:
- Low ASP of SoCs: a major market driver
- Increase in wafer size: emerging market trend
- APAC dominated the global SoC market in 2017, accounting for more than 45% of the market share
- In 2017, mixed signal SoCs held the largest market share, accounting for nearly 41% of the share
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Low ASP of SoCs: a major market driver
The low ASP of SoCs is one of the major factors driving the global system on chip market. SoCs are popular among mobile device manufacturers because they are an important part of the production process of these devices. This is primarily because of their low power consumption that is essential for mobile devices (battery life is vital). Furthermore, the low-cost ASP helps to keep a check on the cost of manufacturing mobile devices, making it more affordable for the consumer segment. The low cost of manufacturing can be credited to simple manufacturing as well as packaging processes involved in the production of SoCs. With further advances in semiconductor manufacturing, the overall production process will get streamlined and efficient, thereby resulting in a decline of the ASP. However, this low cost is only applicable in the case of mass production.
According to a senior analyst at Technavio for research on embedded systems, “Though the developmental cost of SoCs is considerable, there will be continuous investments in the development of SoCs. This is because of the large-scale adoption in the smartphone segment.”
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Increase in wafer size: emerging market trend
Over the last four decades, the global semiconductor industry witnessed an increase in the size of silicon wafers, from 100 mm to 300 mm. The shift to a larger diameter wafer reduces the cost of manufacturing semiconductor ICs by 20%-25%. At present, the industry mostly uses 300-mm wafers to manufacture ICs. This trend is expected to maintain its momentum during the forecast period. This is because the companies are investing a substantial amount in the construction and upgrading of fabs to manufacture 300-mm wafers.
Global market opportunities
In terms of regional dominance, APAC led the global SoC market in 2017, accounting for more than 45% of the market share. This market is projected to grow in terms of revenue, mainly driven by the focus of electronics manufacturing in the region. The increasing number of manufacturing facilities in APAC, along with the outsourcing of manufacturing facilities from the other regions with respect to electronic goods, will help APAC maintain its leading position in the market.
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