Semiconductor Market Expected to Rise by USD 157.1 Billion by 2029 Due to IoT Expansion
European Union, Thursday, 6 February 2025.
The semiconductor market is set to grow significantly, driven by IoT adoption and sustainable practices, with challenges like energy and water use in production posing obstacles.
Market Growth and Key Drivers
The global semiconductor market is projected to expand by USD 157.1 billion between 2025 and 2029, achieving a CAGR of 4.5% [1][6]. This growth trajectory is primarily fueled by the increasing adoption of Internet of Things (IoT) devices and a strategic shift towards sustainable manufacturing practices [1]. Industry analysts predict an even more substantial milestone, with the market expected to reach USD 1.1 trillion by 2026 [6], highlighting the sector’s robust expansion trajectory.
Regional Dynamics and Market Leadership
The Asia-Pacific region dominates the global semiconductor landscape, contributing an impressive 82% to overall market performance [1]. Key market players including Intel Corporation, Samsung Electronics, and Taiwan Semiconductor Manufacturing Company (TSMC) are driving innovation and growth [1]. Major markets such as China, the United States, and Germany continue to play pivotal roles in shaping industry dynamics [1], with emerging technologies like 5G and AI accelerating demand across these regions.
Sustainability Challenges and Solutions
The industry faces significant sustainability challenges, with individual fabrication plants consuming approximately 1 terawatt-hour of energy annually and requiring 2-4 million gallons of ultra-pure water daily [6]. Industry leaders are actively addressing these environmental concerns, with companies like TSMC and Intel implementing comprehensive sustainability programs focused on water recycling and renewable energy adoption [6]. These initiatives are crucial for long-term industry sustainability while maintaining production capacity.
Innovation and Future Outlook
Recent developments in the sector showcase the industry’s innovative spirit, exemplified by startups like Baya Systems securing USD 36 million in funding for AI and IoT innovations [5]. Strategic acquisitions, such as Sequans Communications’ purchase of ACP Advanced Circuit Pursuit AG [7], demonstrate the industry’s focus on advancing 5G and IoT capabilities. The market’s future looks promising, with AI technologies, IoT expansion, and machine learning continuing to drive demand across various sectors [1].