The market for high-reliability semiconductors is projected to expand at a CAGR of 5% during the forecast period of 2024 and 2032. In a variety of industries, such as aerospace, defense, space, and automotive, high-reliability semiconductor components are essential. These components must be subjected to rigorous screening and quality conformance inspections (QCI) to guarantee their dependability, top performance, and operability. As intelligence and functionality increase in the application domains of numerous end-use industries, the cost of failure has become excessively high. Key market participants are emphasizing the design of systems with high-reliability semiconductor components that can operate in harsh environments to address these challenges. In order to provide proprietary silicon isolation technology for the deployment of high-performance noise immunity in components used in military and space applications, companies on the global market are expanding their R&D capacities. In recent years, the widespread adoption of new social infrastructure technologies, such as electric vehicles (EVs) and 5G, has created a strong demand for component safety and reliability in the automotive industry, which has had a positive impact on the expansion of the global market for high-reliability semiconductors.
As a result of global geopolitical concerns, a number of nations are concentrating on strengthening their military bases and increasing their budgets to do so. For example, the US Department of Defense has requested a budget allocation of US$ 718 billion for 2020, a 5% increase over the budget for 2019. In addition, the United States encourages NATO members to increase their military expenditures to 2 percent of their respective GDPs. France has indicated that, in order to meet NATO's goal of spending 2% of GDP on defense, it will increase defense spending by approximately 40% over the next six years. Moreover, in 2019, the Indian government announced a $44.6 billion defense budget for FY 2019-20, a 6.87% increase over the previous year. According to the Stockholm International Peace Research Institute (SIPRI), seven of the ten countries with the highest military spending as a percentage of GDP are located in the Middle East. Jordan, Saudi Arabia, Lebanon, Kuwait, Bahrain, Oman, and Israel are among them. A significant portion of a country's defense budget must be allocated to systems capable of operating in hostile environments. Increased defense spending is expected to drive the global aerospace and defense market for high-reliability semiconductors over the forecast period.
Increasing Global Commercial Aircraft Quantity: Due to factors such as the growing number of passengers and the need to replace outdated equipment, the commercial aviation industry is expanding rapidly. Due to the order backlog of commercial aviation companies, a large number of aircraft are expected to be constructed, according to the report. These aircraft are constructed using cutting-edge fuel-efficiency technologies. In addition, urbanization in emerging nations such as India, China, and South Korea is projected to increase the number of air travelers from the middle class by approximately 50 percent to approximately 6 billion by 2030. Asia-Pacific is anticipated to surpass Europe and North America in terms of air traffic. Increased air traffic increases the demand for aircraft parts and components, which drives the expansion of the market for high-reliability semiconductors.
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In order to improve vehicle performance, reliability is gaining importance in the automotive industry. In the automotive industry, components must have a failure rate of zero over the lifetime of the vehicle. Semiconductor components are used to improve a vehicle's safety, speed, and efficiency. As the popularity of autonomous vehicles with advanced features grows, the demand for semiconductors with high reliability is expected to rise in the coming years. The global demand for autonomous vehicles continues to rise. The National Association of Insurance Commissioners estimates that by 2025 there will be 3.5 million autonomous vehicles on U.S. roads, and by 2030 there will be 4.5 million. In the near future, this factor is likely to generate lucrative market opportunities for high-reliability semiconductors. Leading automakers rely on semiconductor manufacturers to incorporate advanced features into vehicles. Among the semiconductor components being developed by manufacturers for autonomous vehicles are high-reliability MOSFETs, ICs, optoelectronic sensors, and amplifiers. In June of 2019, TDK Corporation, for example, launched the HPL, BCL, and TFM-ALVA series of inductors used in electronic control units (ECUs) to meet the reliability requirements of advanced driver assistance systems (ADAS).
To protect satellites, launchers, military vehicles, and submarine operations, components and systems must be reliable. For mission success, the aerospace industry requires long-term system dependability. Satellites, avionics systems, and combat vehicles are examples of applications that rely on semiconductor components with high reliability. Several factors fuel the demand for high-performance semiconductors, including an increase in government spending on the military and defense sector and a rise in aircraft modernization and upgrades. This contributes to the market's expansion. Components of high-reliability semiconductors used in the aerospace and defense industries, such as data converters, R/F microwaves, amplifiers, and MEMS products, are capable of operating for years without degrading in performance. Therefore, they are favored over generic semiconductor components, which can compromise long-term system reliability and result in premature system failure.
On the basis of technology, the High-Reliability Semiconductor Market is divided into Surface mount technology and Through Hole technology. Surface mount technology held the largest market share in 2023, at 65%. SMT enables the creation of circuit boards with a greater number of extremely small and specialized components than conventional PCB manufacturing techniques. In addition, components can be stacked on both sides of the circuit board, resulting in a higher functionality density per square inch. Due to equipment such as fully automated pick and place systems, high-volume reflow ovens, conveyors, and stencil printing machines, SMT is ideal for the mass assembly of these complex and delicate PCBs that will be used in a variety of electronic devices.
This technology allows electrical components to be mounted directly on the surface of a printed circuit board. It is more efficient than conventional through-hole technology. The semiconductor manufacturing industry is experiencing a rapid increase in demand for this technology as a result of the miniaturization of electronic components. Additionally, surface mount technology is very cost-effective. This technology is anticipated to increase the market share of high-reliability semiconductors over the forecast period. Numerous manufacturers are focusing on the creation of compact devices. ControlTek, for example, invested in the Juki FX-3 high-speed surface mount system to expand its product offering. This technology was utilized by ControlTek to gain precision, dependability, flexibility, asset utilization, and process time improvements.
According to the semiconductor industry research report, the global packaging market is divided into plastic and ceramic segments. In 2023, the ceramic segment held a 55% share of the global market. It is anticipated to maintain its dominance throughout the forecast period.
Ceramics are the preferred material for non-hermetic and hermetic packages requiring stability at high temperatures, thermal conductivity, smoothness, and good planarity. Additionally, it is an outstanding insulator. This material is used in semiconductor components as a dielectric to create inductors and capacitors within the package. Ceramic semiconductor packaging is suitable for defense applications. As a result, it is anticipated that the increase in demand for ceramic semiconductor packaging will drive market statistics throughout the forecast period.
In 2023, Asia-Pacific dominated the global market with a 55% share. As manufacturers invest in R&D in the field of high-reliability semiconductors, it is anticipated that the Asia-Pacific high-reliability semiconductor market will expand during the forecast period. In addition, an increase in demand for highly reliable semiconductors from the aerospace and defensesectors is driving market expansion in the region. Asia-Pacific developing nations are increasingly employing highly reliable semiconductor components to ensure the robust performance of military systems such as avionics, satellites, and combat vehicles. This is likely to boost the growth of the high-reliability semiconductor industry over the projected time frame. During the forecast period, North America is expected to experience a significant growth rate of 5.6% CAGR. The market for high-reliability semiconductors in North America is projected to expand during the period of the forecast due to the presence of major industry players, technological advancements, and the increasing use of these semiconductors in a variety of applications. Europe's market for high-reliability semiconductors is anticipated to expand at a healthy rate over the duration of the forecast period, as regional manufacturers increase their capital expenditures. Europe held a 20% share of the global market in 2023. In the near future, it is anticipated that the presence of profitable manufacturers in the region will stimulate the expansion of the European market.
Numerous dominant players control the majority of the market share in the fragmented global business. Following high-reliability semiconductor market trends, key players are developing innovative products for their customers. Additionally, high-reliability semiconductor companies pursue revenue growth through mergers and acquisitions. Digitron Semiconductors, Infineon Technologies AG, KCB Solutions, LLC, Microsemi Corporation, SEMICOA, Semtech Corporation, Skyworks Solutions Inc, Teledyne Technologies Incorporated, Texas Instruments Inc, Vishay Intertechnology Inc, and Testime Technology Ltd are market leaders in the industry of high-reliability semiconductors.
Among the most significant market developments are the following:
