The global analog integrated circuit market is anticipated to grow steadily at a CAGR of above 5% over the forecast period. Increasing usage of the analog integrated circuits (IC’s) in various end-use verticals such as consumer electronic devices, LED lighting, automotive utilities and driver assistance systems, and healthcare devices have contributed to such growth.
Analog integrated circuits (ICs) are a network of interconnected components manufactured over a single wafer of semiconducting material. These components work over a continuous range of input signals compared to their counterpart digital circuits having only two levels of input and output voltages.
The circuit processes receive and generate various levels of energy output during the operation of the device. Electronic gadgets that use components such as oscillators, DC amplifiers, multi-vibrators and audio amplifiers use analog circuits characterized by equal output and input levels. Moreover, such advanced components are increasingly being used in various LED lightings applications such as traffic light indicators, and data communication systems for managing its power efficiency.
Technological proliferation in consumer electronics devices and rising penetration of smartphone devices, tablets and feature phones has augmented the demand for such IC components.
Introduction and advancements of concepts such as the Internet of Things (IoT) are expected to propel the analog integrated circuit market growth owing to the evident benefits of usage analog IC’s across a considerable range of real-time connected devices and applications. Analog ICs have efficient power consumption characteristics and signal processing capabilities required to configure an ecosystem of automated devices.
New product & application development and advanced fabrication techniques that reduce costs per unit of the component while increasing the functionality are expected to impel further the analog IC market growth over the next decade. Highly dynamic nature of the industry has shortened the product life cycles in handheld devices further enhancing the demand. Such components play a significant role in automotive circuitry and electronic medical devices offering advanced device functionality.
Innovations such as integrating multiple applications onto specific modules by embedding dynamic analog functionality on a single chip are expected to gain prominence over the forecast period. Innovators and new market entrants are focusing on the development of application specific linear IC opening up greater avenues for growth in the future.
However, the analog integrated circuit market fragmentation has led to the rise of a robust competitive landscape, restrained revenue and compromised prices for the component. Revenue growth of the vendors is constrained due to lack of innovation and lesser efficiency compared to discrete circuits.
Moreover, such analog ICs pose physical and economic limits of integrating such components in the compact devices which are anticipated to restrain market growth in the coming years and emphasizes the need for increased R&D top overcome such limitations. Additionally, rapid change in end-use preferences owing to radical technological shifts is further expected to inhibit the industry growth.
By type, such devices can be categorized into general purpose components and application specific analog ICs. General purpose ICs are used in electronic devices such as data converters, comparators, and operational amplifiers. While application specific integrated circuits are oriented to specific applications includes display drivers, radio frequency trans-receivers, touch sensors, timing control, LED drivers and serializing and de-serializing component units.
Such analog ICs find application in diverse industry verticals including automotive, information technology, telecommunications, consumer electronics and healthcare devices. Automotive and industrial end-use sectors are anticipated to witness significant growth in demand on account of efficient power management and sensor networks characteristics.
Asia Pacific is expected to dominate the global market driven by the concentration of electronic component manufacturers and increasing tech-savvy consumer base. Energy-yielding capacity, diverse functionality and smaller segment size are expected to serve as key drivers for the industry growth.
Countries such as Germany, Italy and the UK house leading automobile manufacturers are presumed to generate significant demand over the forecast period. Advanced economies including the U.S., China, and Japan, are utilizing such advanced analog integrated circuits in aerospace, infrastructural and industrial applications bolstering demand for such components.
Vendors in the analog IC industry are highly profitable with considerable operating and gross margins but are highly resource intensive with extensive direct sales networks. Key players in the industry are Analog Devices, Global Mixed-Mode Technology, Maxim Integrated Products, Qualcomm, Richtek Technology, Taiwan Semiconductors and Texas Instruments.
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The recent COVID-19 pandemic that has been ravaging numerous countries across the globe has adversely affected the overall sensor, control, and automation industry. While the capital investments in the automation sector have been lethargic before the pandemic, they are expected to be put on hold or postponed for at least a year. However, the recent standstill in industrial manufacturing and production is anticipated to act as a wake-up call for the manufacturing sector on its reliance on human labor. This, in turn, is expected to highlight the advantages of robotics and automation helping a greater adoption in the post-pandemic period. As IoT, industrial automation, and digitalization are expected to become increasingly relevant to post-pandemic Tier 1 manufacturers, it may eventually turn into an opportunity especially in evolving supply chains. The report will account for Covid19 as a key market contributor.