For various reasons, the semiconductor and electronics domain has been in flux for the past few years. The supply chain disruptions caused by the COVID-19 pandemic led to a huge fall in the supply of semiconductor devices, thus causing a decline in the growth rate of the consumer electronics industry. Furthermore, the ongoing geopolitical tensions between China-Taiwan, Russia-Ukraine, and Israel-Palestine have also contributed to the slump in the semiconductor and electronics domain. However, in the past few months, things have started to change for the semiconductor and electronics domain; in the second quarter of 2024, several trends are expected to help it overcome the slowdown and embark upon a fast-paced growth journey.
Traditionally, the semiconductor and electronics domain has been highly polluting and extractive. It has been one of the biggest users of metallic and non-metallic minerals and thus contributed to the rapid depletion of these natural resources. Also, the air and water pollution caused by the consumer electronics and semiconductor manufacturing industries has increased yearly. To tackle these challenges, consumer electronics companies are gradually shifting to developing sustainable power devices that ultimately reduce the global carbon footprint. Semiconductor manufacturing companies are consciously developing power management integrated circuits that promote energy efficiency and bring down the overall power consumption, thereby promoting sustainability.
Digital twin technology refers to the development of a digital model of an actual physical product, system, or process for various operations like simulation, integration, monitoring, testing, and maintenance. The growing adoption of digital twin technology by the semiconductor and electronics domain is expected to offer numerous growth opportunities in Q2 2024. Digital twin technology essentially helps in enhancing the pace of semiconductor chip production and thus facilitates rapid scalability. This technology has helped consumer electronics companies to efficiently replicate and expand production without the need for physical expansion, thus improving their profitability in a short period of time.
Some of the most prominent trends in the semiconductor and electronics domain include the launch of 5G services and the miniaturization of electronic devices and circuits. To facilitate a smooth transition to these trends, many companies operating in this sector are investing in R&D activities for designing new types of wires and cables that will be compatible with the demands of advanced electronic devices. The wire and cable market, which was valued at $213.6 billion in 2022, is anticipated to garner a revenue of $323.8 billion by 2032, thereby registering a growth rate of 4.6% in the 2023-2032 period. The growing demand for higher bandwidth networks from different end-use industries is estimated to boost not just this market, but the entire domain, in general.
To make the domain resilient to the challenges posed by indiscriminate power consumption and exploitation of fossil-fuel-based energy, several businesses have focused their manufacturing capabilities on developing eco-friendly semiconductor devices. This trend is expected to dominate the semiconductor and electronics sector in the second quarter of 2024 due to various reasons. The growing awareness regarding the importance of renewable energy has transformed various sectors of the global economy. This behavioral change has led to the manufacturing of low-power components, efficient cooling solutions, and the use of sustainable materials for semiconductor manufacturing. The development of innovative products like eco-friendly RFID tags and organic electronic devices is one such example of the changing dynamics of this sector.
Sensors are electronic devices that can detect changes in the environment and provide a corresponding output signal. The sensor market is one of the biggest components of the semiconductor and electronics domain; the market accounted for $166.69 billion in 2019 and is anticipated to reach $345.77 billion by 2028, thus registering a CAGR of 8.9% in the 2021-2028 timeframe. The widespread applicability of sensing devices in flood & water monitoring systems, precision agriculture & animal tracking, remote system monitoring, etc., has played a huge role in augmenting the growth rate of this industry. Technological advancements and innovations like the Internet of Things, smart electronics, and automation are predicted to open up new avenues of growth in the domain in Q2 2024.
The semiconductor and electronics domain has been quite successful in overcoming challenges posed by the COVID-19 pandemic and global geopolitical conflicts. However, as per certain experts, the sector has been unable to get back to its pre-pandemic dominant position. These experts have commented that certain trends like sustainable electronics, digital twin technology, wire and cable optimization, and innovations in sensing devices are projected to bring in new investment opportunities, thereby enabling the domain to increase its revenue share in Q2 2024.
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