The System on a Chip (SoC) Market is estimated to be valued at US$ 164.45 Bn or Mn in 2023 and is expected to exhibit a CAGR of 8.0% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Overview:
A system on a chip or SoC refers to integrating all the components of a computer or other electronic system into a single integrated circuit. It incorporates digital, analog, mixed-signal, and radiosystem circuits into a single chip and may include digital signal processors, memory blocks, peripherals, and software. SoCs are commonly used in embedded systems for applications like smartphones, consumer electronic devices, networking routers, set-top boxes, and more due to their low cost, small size and low power consumption.
Market Dynamics:
Increasing penetration of smartphones across the globe is a major factor driving growth of the SoC market. According to research firm IDC, smartphone sales reached 1.57 billion units in 2021, representing an increase of 7.3% compared to 2020. Continued advancements in 5G network infrastructure and deployment of IoT devices also require more powerful and efficient SoC solutions. For instance, 5G smartphones require powerful 5G integrated SoC solutions with integrated modem, application processor and GPU for power efficient operation. Additionally, growing demand for AI-enabled consumer electronic devices, smart homes and smart cities is fueling the need for advanced SoC solutions capable of handling AI workloads. Emergence of technologies such as machine learning, augmented reality and autonomous vehicles further increases computational requirements and reliance on powerful yet low power consuming SoCs.
Segment Analysis
The System on a Chip (SoC) market is dominated by the consumer electronics sub segment. The consumer electronics sub segment accounted for over 35% share of the global SoC market in 2022. This is because SoC chips are now extensively used in smartphones, tablets, smartwatches and other smart consumer devices to integrate multiple components on a single chip to improve performance.
PEST Analysis
Political: The trade policies and tariffs imposed by countries can impact the sourcing and imports of SoC chips. Localization policies by nations can also influence the operations and supply chains of SoC manufacturers.
Economic: A slowdown in the global economy can lower the demand for consumer electronics where SoC sees significant usage, thereby negatively impacting the SoC market. Exchange rate fluctuations also affect the profits of multinational SoC companies.
Social: The rising usage of smartphones, smart home devices and wearables has increased the demand for more powerful and efficient SoC solutions. The digital transformation and growing connectivity needs are driving the adoption of advanced SoCs across applications.
Technological: Continued advancement in process node technologies, 3D packaging, AI/ML techniques etc allow for the integration of higher components on a single chip with better performance and power efficiency. This will increase the acceptance of SoC platforms.
Key Takeaways
The Global System On A Chip (Soc) Market is expected to witness high growth, exhibiting a CAGR of 8.0% over the forecast period of 2023 to 2030, due to increasing digitization and connectivity needs of consumers and industries. The market size for SoC is projected to reach US$ 325 Bn by 2030 from US$ 164.45 Bn in 2023.
The Asia Pacific region currently dominates the SoC market with a share of over 45% in 2022. China, Taiwan, South Korea and other Asia Pacific nations are major manufacturing hubs for consumer electronics and smartphones where SoC finds widespread usage. Several leading foundries are also situated in the region servicing global demand.
Key players operating in the System on a Chip (SoC) market are Apple Inc., Huawei Technologies Co. Ltd., MediaTek Inc., Qualcomm Technologies Inc., Samsung Electronics CO. LTD., Intel Corporation, STMicroelectronics N.V., Toshiba Corporation, NXP Semiconductors N.V., and Broadcom Inc. The listed players are focused on advancing process node technologies and developing application-specific SoC solutions to strengthen their position in automotive, IoT and mobile domains.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it