Opportunities for the global semiconductor market

Growing market share by embracing Artificial Intelligence (AI)

Semiconductor sales totaled US$481bn in 2018.


We expect the market for AI-related semiconductors to grow from a
current US$6bn in revenues to more than US$30bn by 2022.


Of the US$67.9bn global automotive electronic-component market, AI’s impact will be most felt in infotainment at US$8.5bn.


Strong semiconductor industry growth set to continue as artificial intelligence adds to demand

Given today’s rapid technological innovation, the semiconductor industry can look forward to growth. After what is expected to be a relatively weak 2019, we anticipate that the semiconductor market will recover in 2020 and continue to prosper. Semiconductor sales totaled US$481bn in 2018.
Demand for chips related to the rapidly growing use of AI will contribute significantly to the industry’s overall growth.

Of the seven component types analysed in this report, memory chips are expected to continue to maintain the largest market share through 2022. Every application market is likely to grow through 2022, led by the automotive and data processing markets. Lifting these segments will likely be the demand for chips related to AI.

With competition from new startups and entrants from other corners of the tech world, the race to capture the market is only intensifying.

Rise of the learning machines

Demand in the semiconductor industry is typically fueled by a disruptive new technology. Between 1997 and 2007, rapid increases in the popularity of PCs boosted demand for central processing units (CPUs) and memory chips, while the broad penetration of the Internet drove volume for Ethernet equipment, network processors and ASICs. The era of the smartphone began with the introduction of the iPhone in 2007, driving demand for mobile processors, while the adoption of cloud computing has pushed growth for server CPUs and storage.

Now, artificial intelligence will likely be the catalyst that will drive another decade-long growth cycle for the semiconductor sector.

We expect the market for AI-related semiconductors to grow from a current US$6bn in revenues to more than US$30bn by 2022, a compound annual growth rate (CAGR) of almost 50%.Although AI-driven use cases are expected to find their way across every industry segment over time, their adoption will likely be determined by the size of investment in the technology, the pace of its development and the speed at which its benefits are realized.

Digitisation in the semiconductor industry

The semiconductor industry has been a pioneer in digitisation since its inception, offering digital services and pursuing new digital business models.

Today, other industries, notably automotive, have clearly outpaced the semiconductor industry in terms of digitisation. That’s ironic, given that automakers’ own success in digitisation has been largely supported by the products made by the semiconductor industry.

It is now more critical than ever for semiconductor companies to consider how best to leverage digitisation, and which of the possibilities make the most sense for their organisations.

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Werner Ballhaus

Global Entertainment & Media Leader, PwC Germany

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Wilson Chow

Wilson Chow

Global Technology, Media and Telecommunications Industry Leader and China Artificial Intelligence Leader, PwC China

Tel: + [86] (755) 8261 8886