Robotics and 5G to drive SoC industry growth • The Register

The system-on-chip (SoC) side of the semiconductor industry is poised to grow by 2026, when it’s expected to be worth $6.85 billion, according to an analyst’s report.

Chances are there’s a SoC-powered device at hand: the tiny ICs contain everything needed for a basic computer, leading to their proliferation in mobile, IoT, and smart devices.

The report The growth prediction comes from consultancy Technavio, which reviewed a long list of companies in the SoC market. Vendors analyzed include Apple, Broadcom, Intel, Nvidia, TSMC, Toshiba, etc. The company predicts that much of the growth through 2026 will come primarily from robotics and 5G.

Robots are being deployed in increasingly diverse situations, says Technavio, and small purpose-built SoCs are ideal for such applications in automotive, electronics, healthcare and defense industries.

The report also indicates that there is a growing demand for collaborative robots that assist workers as well as fully autonomous robots.

The 5G industry will be the other big growth driver for SoCs, the company predicts. Quoting the Gartner Statistics that 5G infrastructure revenue grew 39% from 2020 to 2021, making it worth $19.1 billion, Technavio said the SoC market would benefit.

Geographically, Technavio predicts that three-quarters of SoC market growth will come from the APAC region, where many semiconductor manufacturers are already established. According to the report, much of APAC’s growth will be driven by increased interest in 4G/LTE deployment and continued commercialization of 5G.

Long-term trends

While the report details the effect that COVID-19 has had on the SoC industry, especially since much of its production occurs in China, it also indicates that large-scale initiatives to vaccinate the people in APAC have allowed life to return to some semblance of normality with a few exceptions. This, the report states, indicates that “the demand for SoC has increased which will drive the regional SoC market growth over the forecast period.”

This period extends to 2026 and does not take into account what is currently happening in China in mid-2022, where continued lockdowns have caused companies like Apple to cut their sales forecasts significantly – 8 billion dollars in the case of Apple.

Some manufacturers have been so affected by the shortages that they have started extracting shavings from old washing machines for reuse in industrial equipment.

We asked Technavio if this meant any complication for its own prediction, although it’s admittedly longer term. The report appears to make little or no mention of the chip shortage, although previously the analyst predicted that “semiconductor chips will be scarce throughout 2022…and that ‘the chip shortage will last 24 months before easing’.”

One SoC industry challenge the report addresses is the challenge presented by IP core vendors, which are companies using third-party foundries to manufacture chips that are their own intellectual property.

The report indicates that large companies increasingly dominate production time. “Technavio expects vendors with high financial resources to grow their footprint, and smaller vendors will struggle to compete with them in terms of quality, technology, and price,” he adds.

Large suppliers outperforming smaller OEMs is already a problem, and one that has been exacerbated by supply chain issues and material shortages. When manufacturers prioritize large orders, OEMs will place larger orders to ensure they get priority. But don’t blame SoC makers for that: “Semiconductor makers are entirely dependent on IP vendors for the development of high-performance SoCs,” the consultancy concludes. ®

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