Semiconductor Market in Military & Aerospace to Grow by USD 3.45 Billion (2025-2029), Aircraft Modernization Boosts Revenue, Report on AI-Driven Market Transformation - Technavio

NEW YORK, Jan. 21, 2025 /PRNewswire/ -- Report with the AI impact on market trends - The global semiconductor in military and aerospace market  size is estimated to grow by USD 3.45 billion from 2025-2029, according to Technavio. The market is estimated to grow at a CAGR of  6%  during the forecast period. Increased upgrading and modernization of aircraft is driving market growth, with a trend towards growing use of UAVS. However, high cost associated with manufacturing  poses a challenge. Key market players include Advanced Micro Devices Inc., AKHAN Semiconductor Inc., Broadcom Inc., Digitron Semiconductors, Infineon Technologies AG, Intel Corp., Microchip Technology Inc., Micron Technology Inc., Micross Inc., Northrop Grumman Corp., ON Semiconductor Corp., Qualcomm Inc., RTX Corp., Samsung Electronics Co. Ltd., SEMICOA, Semtech Corp., Taiwan Semiconductor Manufacturing Co. Ltd., Teledyne Technologies Inc., Texas Instruments Inc., and Toshiba Corp..

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Key Market Trends Fueling Growth

The semiconductor market in Military and Aerospace is experiencing significant growth due to key drivers like IoT, wired communication, AI, and data analytics. Semiconductor products such as logic devices, artificial intelligence chips, and memory devices are in high demand for various application areas like automotive, industrial automation systems, data center applications, and consumer electronics. Silicon carbide and silicon chipsets are gaining popularity in the telecom industry for their efficiency and reliability. AI integration and machine learning are also driving business revenues in this sector. Market research indicates continued growth in areas like data infrastructure, government projects, and consumer behavior. Agreements between semiconductor companies and industry leaders are fueling innovation in memory protection units and microcontroller units. Silicon wafer fabrication manufacturing is a crucial part of this industry's growth strategies. Insulators and memory chips are essential components in the data processing and big data sectors. Overall, the semiconductor market in Military and Aerospace is poised for continued growth in the coming years.

Unmanned Aerial Vehicles (UAVs), or drones, are increasingly utilized in various sectors, including military and border security. India, for example, has recently initiated the procurement process for advanced drones like the MQ-9B from the US, for surveillance purposes. China, on the other hand, displayed 300 UAVs with advanced military technology at a museum in October 2023. These countries are investing heavily in this technology for military applications. UAVs offer remote control capabilities, making them valuable for monitoring borders and potential threats. Their use extends beyond military applications, with logistics and disaster relief being other sectors that benefit from this technology.

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Market Challenges

• The semiconductor market in Military and Aerospace is experiencing significant growth due to key drivers like IoT, wired communication, AI, and data analytics. Semiconductor products, including logic devices, artificial intelligence, and memory devices, play a crucial role in various application areas such as government projects, industrial automation systems, data center applications, and telecom industry. The integration of AI and machine learning in semiconductor chips is a game-changer, leading to increased business revenues. Silicon carbide and silicon chipsets are in high demand for automotive and consumer electronics consumption. Memory chips, microcontroller units, and memory protection units are essential components of data infrastructure. The telecom industry's big data requirements and consumer behavior trends are fueling market growth. Manufacturing agreements and partnerships are essential market research strategies for semiconductor companies. Insulators, logic devices, and analog integrated circuits are also vital components of semiconductor wafer fabrication. The semiconductor industry's success depends on its ability to innovate and meet the evolving needs of various industries.
• The semiconductor industry entails substantial capital investments, akin to the automotive sector. Establishing a new semiconductor factory involves a hefty capital outlay, with the building cost being a significant expense. Additionally, manufacturing equipment is another substantial expenditure for companies. Initially, firms like Motorola would manufacture this equipment themselves while also producing chips. However, the high cost of facilities and equipment necessitates continuous upgrades to maintain competitiveness in the military and aerospace market.

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Segment Overview

This semiconductor in military and aerospace market report extensively covers market segmentation by

1. Application 
• 1.1 Defense
• 1.2 Aerospace
2. Product 
• 2.1 Memory
• 2.2 Logic
• 2.3 MOS microcomponents
• 2.4 Analog
• 2.5 Others
3. Geography 
• 3.1 North America
• 3.2 APAC
• 3.3 Europe
• 3.4 Middle East and Africa
• 3.5 South America
4. Technology

1.1 Defense-  The defense segment of the semiconductor market is projected to experience growth during the forecast period due to the increasing demand for advanced military applications, particularly in electronic warfare and radar systems. Compound semiconductors, such as diodes, transistors, and switches, are widely used in these applications due to their faster processing speeds and radiation hardness. The US Department of Defense and the Defense Advanced Research Projects Agency are investing heavily in research and development of compound semiconductor materials like SiC to enhance the efficiency of their radar applications. Semiconductors are crucial for the development of sophisticated electronic systems and equipment in the defense industry, including electronic warfare systems, radar systems, communication devices, and drone and missile guidance systems. The demand for high-performance semiconductors is further fueled by the need for reliable and secure communication systems and the integration of advanced technologies like machine learning and artificial intelligence in defense applications. Field-Programmable Gate Arrays (FPGAs) are a notable example of semiconductors used in defense, particularly in electronic countermeasure systems due to their ability to reconfigure and adapt to evolving threat situations. The trend towards reducing the size, weight, and power of integrated circuits (ICs) is driving the usage of commercial-off-the-shelf parts for military applications. The availability of more applicable commercial parts for military uses, such as those from the automotive, public-safety radio, radar, and satellite communication industries, is expected to accelerate this trend and contribute to the growth of the semiconductor market in the defense and aerospace sectors during the forecast period.

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Research Analysis

The semiconductor market in military and aerospace is experiencing significant growth due to the increasing integration of technology into defense and space applications. Data storage and management are crucial in this sector for handling large amounts of sensitive data. Smart factories and IoT security are essential for optimizing production processes and securing connected devices. Digital marketing and data visualization help in analyzing customer trends and gaining insights. Predictive analytics and cybersecurity ensure the reliability and security of systems. 5G technology enables faster data transfer and real-time decision making. Digital transformation, business intelligence, and edge computing are key strategies for staying competitive. The semiconductor future holds advancements in areas such as deep learning, autonomous vehicles, and semiconductor sustainability. Regulation, ethics, patents, and the chip shortage are important considerations for the industry. Semiconductor design, services, and innovation continue to drive progress in this dynamic market.

Market Research Overview

The semiconductor market in the military and aerospace sector is witnessing significant growth due to the integration of advanced technologies such as the Internet of Things (IoT), AI, and data analytics. Semiconductor products, including logic devices, memory chips, and microcontroller units, play a crucial role in wired communication, data processing, and AI integration in various application areas. Silicon carbide and silicon chipsets are gaining popularity in the defense industry due to their high power efficiency and reliability. Key drivers for market growth include government projects, data infrastructure development, and the telecom industry's expansion. The automotive and industrial automation systems sectors are also contributing to the market's growth due to the increasing use of semiconductors in electric vehicles and smart factories. The semiconductor industry's focus on manufacturing innovation, such as semiconductor wafer fabrication and insulator technology, is enabling the production of more advanced and efficient chips. The integration of machine learning and AI in semiconductor products is expected to further fuel market growth. Consumer behavior and big data are also influencing the market, with the increasing demand for consumer electronics and data center applications driving up business revenues. Analog integrated circuits and memory protection units are essential components in ensuring data security and reliability in these applications. Overall, the semiconductor market in the military and aerospace sector is poised for significant growth, driven by technological advancements, increasing demand, and strategic partnerships and agreements. Market research and growth strategies are crucial for companies to stay competitive in this dynamic industry.

Table of Contents:

1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation

• Application
• Defense
• Aerospace
• Product
• Memory
• Logic
• MOS Microcomponents
• Analog
• Others
• Geography
• North America
• APAC
• Europe
• Middle East And Africa
• South America
• Technology

7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Trends
10 Company Landscape
11 Company Analysis
12 Appendix

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SOURCE Technavio