We study the state of the modern global microelectronics market, key drivers and development prospects, as well as the impact of the main trends in the industry using the example of the development plans of the largest microelectronics manufacturers
Microelectronics is one of the fundamental industries for the technological development of the economy. The most significant areas of use of microelectronic components are telecommunications, computing, transport, industry, and consumer devices.
The wide applicability of the industry’s products determines its long-term growth. From 2020 to 2024, the microelectronics market grew at an average annual rate of 9% . At the same time, while demonstrating sustainable expansion in the long term, it is subject to local declines. In 2023, there was a decrease in the volume of microelectronics consumption against the backdrop of a decrease in demand in a number of industries, primarily from consumer devices.
Dynamics and structure of the global microelectronics market, billion US dollars (Photo: SIA, WSTS, SEMI, analysis by Strategy Partners)
In 2024, the market recovered and reached $627 billion , with the key growth driver being the increased consumption of video cards and processors for artificial intelligence (AI) used to create data centers (DPCs). The main sectors consuming microelectronics products are computing equipment and telecommunications: they account for 58% of the market .
Demand-side trends and forecast of microelectronics consumption volume
In the long term, demand for the industry’s products will grow as digitalization develops and new technologies are applied. As part of our analytical special project for the upcoming Microelectronics forum, it was established that the main factor stimulating the growth of demand for microelectronic components is the active development of a number of key technologies:
AI;
cloud computing: a high proportion of computing is moving to the cloud, with the number of servers and data centers growing;
development of telecommunications: growth in the number of devices and network speeds, modernization of communications infrastructure;
new technologies in the transport industry: growth of the electric and hybrid vehicle segment, introduction of driverless driving systems and advanced driver assistance systems (ADAS);
Edge computing: the growth of small data centers located at the edge of the network;
growing demand for power electronics due to rising energy consumption: general digitalization, increasing number of electric vehicles and data centers;
Cybersecurity: Complex security methods require more microelectronics for encryption;
Industry 4.0: automation of production through the introduction of digital equipment and the Industrial Internet of Things (IIoT).
As a result of the development of these areas , it is predicted that the volume of demand for microelectronics products will grow at a rate of 8% to $1 trillion in 2030. The largest share of the growth of the global microelectronics market will be provided by two industries: computing equipment and telecommunications equipment. The total share of these industries in the consumption structure will grow from 58% in 2024 to 65% in 2030 .
Supply-side trends
The microelectronics market is global in nature, with distinct regional specialization in individual production processes. The emergence and deepening of specialization at individual stages of chip creation is due to the capital intensity and complexity of the production process. The microelectronics market is characterized by high consolidation: 56% of its volume is controlled by ten leading companies from the United States, the Republic of Korea, and Germany. According to the results of 2024, the top three leaders in terms of revenue from sales of microelectronics products were Samsung Electronics, Intel, and Nvidia. Nvidia’s capitalization reached $4 trillion in July 2025 , overtaking Apple and Microsoft and becoming the most expensive company in the world.
The bulk of the supply is provided by a pool of six countries/regions: the United States, the European Union, South Korea, Japan, Taiwan, and China. The United States is a leader in both chip development and production. The development and implementation of new technologies in the field of microelectronics is carried out in the above countries/regions under the auspices of state implementation centers with large-scale state funding.
Structure of the global microelectronics market by production processes, % of revenue of companies in the segment, % of added value (Photo: BCG, SIA)
The key trend in the development of the production base in the field of microelectronics is sovereignty. Against the background of a high level of geographical concentration – geopolitical tension (which is expressed in the strengthening of trade restrictions and the intensification of armed conflicts), the possibility of pandemics or natural disasters – there are significant risks of failure of logistics chains. This dictates the need to develop full-cycle production within individual countries/regions. The effect of this trend is manifested in all leading manufacturing countries: they are implementing development programs and introducing market protection mechanisms.
Currently, the leaders in terms of production capacity are China, Taiwan and South Korea, the total share of these countries in the global capacity is more than 60%. The largest construction of new factories on the horizon of 2024-2032 is planned in Taiwan, the USA and South Korea, which should ensure an increase in production capacity in these countries within the specified period by 97, 203 and 129%, respectively.
All development programs implemented by leading countries in the industry cover priority areas of technological development: the transition to smaller topologies and new packaging methods, the use of new materials, the use of photonic components, research in the field of quantum computing, and the creation of new transistor architectures.
In addition to the leading countries, development programs are being implemented in a number of other countries. The largest investments among them are being made in India. A number of projects are being implemented here to create production facilities in partnership with world industry leaders: Micron, AMD, etc. Against the backdrop of the growing confrontation between the US and China, India may become the “second China” in the field of microelectronics production.
Microelectronics production facilities
The market for equipment and technologies in the field of microelectronics remains highly concentrated, with the key players being the US, EU and Japan. These countries account for 96% of global equipment production. The highest concentration is observed in the lithography and photoresist production segments, with individual countries accounting for approximately 90% of production (the leader in lithograph production is Holland, and in photoresist production, Japan).
As for the relatively small segments in terms of share in the value chain – EDA, IP cores – here the three countries mentioned hold almost 100% of production with a significant predominance of US companies.
The trend towards sovereignty that is characteristic of the microelectronics industry also covers the equipment and technology market. The most striking example illustrating this trend is China. As of 2022 , mainland China accounted for 20% of global equipment spending and 18% of global equipment imports. Due to export restrictions by the United States, Japan and the Netherlands, there is a need to develop domestically produced alternatives. To ensure technological independence in this area, China invested $25 billion in microelectronics equipment in the first half of 2024, with the total volume estimated for last year at about $50 billion . However, despite the implementation of an ambitious development program in 2012-2024, China is still behind in the technological development race in microelectronics.
Cases of leading companies
Key trends in the industry’s development directly affect the plans of manufacturing companies. At the same time, the largest suppliers of microelectronics not only respond to emerging trends, but also set the direction of the industry’s development.
Samsung, one of the leading manufacturers of microelectronics, focuses on development in the following areas:
increasing production of DRAM memory intended for AI accelerators;
expansion of the product line for the automotive industry (the company is implementing a roadmap for the period up to 2027 for the release of eMRAM for use in vehicles);
Together with another South Korean microelectronics maker, SK Hynix, the company plans to spend more than $470 billion to create a chip manufacturing cluster to achieve technological sovereignty.
The development directions of another participant in the top 3 microelectronics manufacturers, Intel, are also based on key industry trends:
focusing on AI in the development of new processors (most of the company’s developments presented at the Consumer Electronics Show (CES) 2025 are aimed at working with advanced language models and increasing the speed of AI-related operations);
Intel is aggressively building factories in the US under a strategy known as IDM 2.0 , which helps protect against supply chain disruptions.
NVidia, also one of the top 3 microelectronics manufacturers, presented the company’s plans for the future up to 2028 at the Computex 2025 and CES 2025 exhibitions. The key development areas for the coming years will be:
The company is building its own data centers. NVidia is moving from supplying equipment to data center operators to designing and building new computing facilities. This is being implemented through partnerships with TSMC, Foxconn, Gigabyte, Asus, and others.
Industry 4.0 developments: development of robotics and digital twins. An example of a project in this area is the creation of a digital twin of a new car manufacturing plant created by NVidia in partnership with BMW. The digital twin allows for modeling, testing and optimizing production processes before the plant itself is launched. The project aims to reduce the time it takes to create real production, as well as to increase the efficiency of production processes.
Developments in the field of autonomous transport and ADAS. NVidia is developing a number of projects in partnership with industry leaders: Toyota, General Motors and others.
Leave a Reply