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System-on-Chip Market: Consumer Electronics to Remain Dominant Application Segment, says TMR

Posted on Sep 27, 2016

The global system-on-chip (SoC) market is dominated by companies such as Samsung Electronics, Apple Inc., Infineon Technologies AG, Qualcomm Inc., Toshiba Corporation, MediaTek Inc., and Intel Corporation. Maintaining a consistent focus on product innovation is likely to be vital for companies in the SoC market in the coming years, as price-based competition is not viable in the long run in the SoC market and the consumer demand for progressive technological innovations has made the introduction of new products crucial for SoC manufacturers.

According to Transparency Market Research, the revenue of the global SoC market totaled US$35.9 bn by the end of 2014. Exhibiting a robust 10.5% CAGR from 2014 to 2021, the market’s total revenue is expected to rise to close to US$72 bn.

Consumer Electronics to Remain Leading Contributor to System-on-chip Market

Among the leading applications of systems-on-chip, consumer electronics remain the key revenue generator for the global SoC market. The booming consumer electronics industry, which has benefitted handsomely from the rising disposable income of consumers across the world, has led to a rising demand for smart devices such as smartphones, tablets, and various smart appliances. The need to reduce the overall power consumption in consumer electronics has also led to the growing use of systems-on-chip, whose compact design makes them more power-efficient than conventional alternatives.

Geographically, Asia Pacific is the leading contributor to the global system-on-chip market due to the booming consumer electronics industry in countries such as China, Japan, Taiwan, India, and South Korea. Apart from smartphones and tablets, the demand for smart household appliances is also growing in Asia Pacific and is likely to remain a key driver for the regional SoC market in the coming years. The rising penetration of the Internet is also likely to remain a key factor in the Asia Pacific SoC market in the coming years.

Rising Demand for Embedded Graphics Processors Crucial for System-on-chip Market

The increasing use of systems-on-chip for applications that involve displays has led to the rapid development of SoCs with embedded graphics processors (GPUs). This is a key driver for the global SoC market, as the automotive industry makes use of SoCs with embedded GPUs in advanced models. The consistent demand for automotive electronics has necessitated the need for sophisticated display technologies, which has all but ensured steady demand from the SoC market.

“The development of multi-core systems-on-chip has also been beneficial for the global SoC market, as the higher performance capacities of multi-core systems have led to widespread adoption in various industries,” said TMR’s lead analyst. Thus, steady commercialization of 64-core systems-on-chip is likely to have a lasting impact on the future development of the global SoC market.

Cyclical Nature of SoC Industry a Threat to Current Generation of Products

The system-on-chip industry has an inherent cyclical pattern, as progressive technological advances often make the previous market leader obsolete. While this isn’t a key restraint on leading manufacturers of SoCs, smaller players focusing on the current generation of SoC products could suffer from the development of the next generation of systems.

The cyclical nature of the SoC industry could also force SoC manufacturers to eventually rely on original software development and upgrades to differentiate their products in an increasingly competitive market, as the availability of the latest hardware will be taken for granted. This has the potential to hamper the operations of several smaller players, which could lead to significant consolidation in the market in the coming years.

The information in this preview comes from a Transparency Market Research report titled ‘System-on-Chip (SoC) Market: Global Industry Analysis, Size, Share, Growth, Trends and Forecast 2015 – 2021.’

The global system-on-chip market is segmented as follows:

System-on-Chip (SoC) market, by Types:

  • Digital
  • Analog
  • Mixed Signal
  • Others

System-on-Chip (SoC) market, by Applications:

  • Telecommunication
  • Consumer electronics
  • Automotive
  • Others

System-on-Chip (SoC) market, by Geography:

  • North America
  • Europe
  • Asia Pacific
  • Rest of the World (Latin America, Middle East and Africa)

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