Computer Microchips Market Size

Computer Microchips Market Size

Computer Microchips Market was valued at USD 24.97 billion in 2023, and it is anticipated to register a CAGR of over 10.7% between 2024 and 2032. The surge in consumer electronics demand is a primary driver of the market.

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With advancements in technology, consumer electronics such as smartphones, tablets, and laptops are becoming more sophisticated and integrated with advanced features. This has created a consistent need for high-performance microchips that can handle complex tasks efficiently. The global shift towards smart homes and wearable devices further accelerates this demand. For instance, according to data published by IDC in July 2024, global smartphone shipments increased 6.5% year over year to 285.4 million units in the second quarter of 2024 (2Q24). This marks the fourth consecutive quarter of shipment growth.

Governments are investing heavily in semiconductor manufacturing facilities, research and development, and infrastructure to bolster domestic production capabilities. These initiatives often include financial incentives such as subsidies, tax breaks, and grants to encourage both new investments and the expansion of existing facilities. By providing such support, governments aim to address supply chain vulnerabilities and ensure a stable supply of critical components.

Governments also play a key role in funding research and development efforts in semiconductor technology. Public funding for R&D helps drive advancements in chip design, materials science, and manufacturing processes. For instance, in February 2024, The Biden administration has announced a significant commitment of USD 5 billion aimed at enhancing research and development in the semiconductor industry through the establishment of the National Semiconductor Technology Center (NSTC). This initiative is part of the broader CHIPS and Science Act, which was enacted to revitalize the U.S. semiconductor sector

Supply chain disruptions have been a significant challenge for the microchip market, particularly evident during global crises such as the COVID-19 pandemic. The semiconductor industry is highly complex, involving multiple stages from raw material sourcing to manufacturing, assembly, and distribution. Any disruption at any stage can lead to delays and shortages. For instance, the pandemic caused factory shutdowns, labor shortages, and logistical bottlenecks, severely impacting production capabilities and leading to a global chip shortage. This shortage affected various industries, from automotive to consumer electronics, highlighting the vulnerability of the microchip supply chain. Addressing these disruptions requires improving supply chain resilience, diversifying sources, and investing in local manufacturing capabilities.