The global Active Components market is expected to reach USD 698 Billion by 2025 growing at a CAGR of 8-9% from 2022-2025. The market is expected to be driven by cloud computing to support remote work environment, data center devices to support remote working, and learning and automotive demand driven by electric vehicles. There has been a sudden spike in demand in late 2020 that led to sever supply shortage situation throughout 2021 and 2022 for most of the active components
Active Components Market Outlook
There has been several wafer fabs being built at 300 mm across the world to meet up the demand, but 200 mm fabs are witnessing continuous shortage with the existing demand from various end-use from MEMS and power semiconductor chips. Additionally, the 200 mm wafers would have challenges to expand, as the equipment for the same has become limited in the market
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In order to overcome this shortage situation, the automotive manufacturers have started tying up with foundries to ensure chip supplies.
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Companies like Ford and General Motors have tied up with wafer foundries like Global foundries, TSMC, Qualcomm, NXP to setup their own chip plants.
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Across the world, there are more than 29 fab expansion plans initiated last year in 2022 and are focused on existing and latest node technologies. However, mature nodes, like 28nm and above, plays a significant role in various functional devices starting from MCU, Power Management IC, Analog IC, Power Discretes, etc. TSMC announced its investment plans in Japan, Taiwan, and China with focus on N12, N16, N22, and N28 nodes.
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The electronic component pricing has been stabilizing for commodity-based components, while application-specific components continue to increase for automotive, industrial and communication components.
COVID-19, and Economic Headwinds Impact on Active Components market.
The market has been witnessing moderate lead-times, where only 1 or 2 large manufacturers alone have tight supplies and stopped taking new orders. This situation is expected to further improve in mid-2023, as the expansion plans expected to come live in H2 2022, while few are coming further down in 2023. Buyers across industries are currently more focused on ensuring supply over price and on providing better visibility to chip OEMs in their near future procurement plans.
Active Components Pricing Insights
MCU and Analog lead-times have extended even up to 52 weeks for many manufacturers, and some are still in allocation. Memory lead-times are slowly stabilizing or improving with DRAM lead-times coming down to even 10 to 20 weeks while other flash memory have become around 40 to 45 weeks. The electronic component pricing has been stabilizing for commodity-based components while application specific components continue to increase for automotive, industrial and communication components. Memory IC alone has been witnessing a dip in the price movement due to increased inventory for DRAM and NAND and additionally companies could not procure other IC components due to shortage and hence demand for memory came down.
Active Components Supply Outlook
The chip shortage scenario is expected to extend even up to 2023 for some end-markets as per market experts due to combination of issues such as production constraints, verification of real demand versus panic, reshoring efforts and the inflationary impact on consumer spending on products. Additionally, socio-political risks between China and Taiwan which is linked to Apple’s chipmaker TSMC has also become a significant issue for smartphones, ICT and 5G.
Active Components Value Chain
Regional Market Insights
South Korea is one of the strongest countries in the electronics production, holding a share of around 30 percent of the overall semiconductor market. Taiwan holds the second position with 26 percent of the overall semiconductor manufacturing with all the semiconductor value chain starting from fabrication, packaging, testing. In addition to this, 90 percent of the most advanced chips below 10nm are being produced in Taiwan.
Japan holds 9 percent of the overall semi-conductor market, with the market size of $47.97billion in 2021. Rest of Asia (Malaysia, Thailand, Singapore, Indonesia, India) are the key regions for the semiconductor manufacturing holding around 10% of the overall semiconductor manufacturing.
The US and Canada together hold the major share in the semiconductor market space, with 22 percent. Many electronics OEMs are adopting a regional strategy for manufacturing, especially in US, instead of procuring from Southeast Asian regions, especially because of trade disputes with China. The US and Canada are developing their manufacturing capabilities to quench the needs of the OEMs with their latest policies like US Chips Act
Among other EMEA regions, Europe registered a growth of around 2–3 percent MoM, based on three-months’ moving average. In Europe, semiconductor sales were driven by optoelectronic devices up 8.3 percent; sensors and actuators up 5 percent; discrete, up 3 percent and analog devices up 2 percent.
Supplier Intelligence
The category intelligence covers some of the key global players such as Intel, Samsung, TSMC, SK Hynix and Micron.
Key global players have announced the reduction of carbon footprint as part of their sustainable strategies. For instance, TSMC is adopting United Nations sustainability goals through Sustainable Strategy, Circular Economy, and Zero Waste Management. As part of this, the company adopts lead-free and halogen-free manufacturing processes in their daily operation. Achieve zero waste in 50% of its manufacturing & logistics sites by 2025. Reduce water withdrawn by 5%, focusing on sites located in water scarce areas, by 2025. Require 50% of its preferred suppliers to set greenhouse gas emissions reduction targets by 2025, and 100% by 2030
Segmentation Overview:
