Semiconductor Market in Military and Aerospace to Grow by USD 3.02 Billion (2024-2028) as Aircraft Modernization Increases; AI-Redefined Market Landscape Report - Technavio

NEW YORK, Oct. 30, 2024 /PRNewswire/ -- Report with market evolution powered by AI - The global semiconductor market in military and aerospace industry size is estimated to grow by USD 3.02 billion from 2024-2028, according to Technavio. The market is estimated to grow at a CAGR of 5.56% 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., AMS Technologies AG, Broadcom Inc., Digitron Semiconductors, Foundaries Inc., Infineon Technologies AG, Intel Corp., Microchip Technology Inc., Micron Technology Inc., Micross Inc., Northrop Grumman Corp., ON Semiconductor Corp., Qualcomm Inc., Raytheon Technologies Corp., Samsung Electronics Co. Ltd., SEMICOA, Semtech Corp., Skyworks Solutions Inc., Taiwan Semiconductor Manufacturing Co. Ltd., Teledyne Technologies Inc., Texas Instruments Inc., Toshiba Corp., and Vishay Intertechnology Inc..

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Key Market Trends Fueling Growth

The global semiconductor market in the military and aerospace industry is experiencing significant growth due to the increasing use of Unmanned Aerial Vehicles (UAVs) in various sectors. Countries like India and China are investing heavily in hi-tech drones for military border security and logistics applications. In turn, this is driving the demand for semiconductors in these industries. For instance, India ordered 31 MQ-9B drones from the US in September 2023, while China showcased 300 UAVs with advanced technological attributes for military purposes in October 2023. These developments are expected to continue fueling the growth of the semiconductor market in the military and aerospace industry. 

The semiconductor market plays a significant role in the military and aerospace industry. Microchips and circuits are essential components in defense systems and avionics. ICS and Space technology require advanced semiconductors for communication, navigation, and control systems. The trend towards miniaturization and increased functionality drives the demand for new semiconductor technologies. Defenses and militaries worldwide invest in semiconductors for radar systems, drones, and other advanced technologies. The semiconductor industry continues to innovate, with companies developing new materials and manufacturing processes to meet the unique demands of military and aerospace applications. The use of semiconductors in these sectors is expected to grow, driven by the need for more efficient, reliable, and secure technology solutions. 

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Market Challenges

• In the semiconductor market for military and aerospace applications, high manufacturing costs pose a significant challenge. Capital-intensive facilities and equipment, including buildings and manufacturing equipment, are necessary but depreciate quickly due to industry advancements. Raw materials, particularly silicon wafers, are expensive based on chip complexity. Defects also add to costs, with more complex designs yielding a greater number of non-functioning chips. These factors may limit growth in the military and aerospace semiconductor industry during the forecast period.
• The semiconductor market plays a crucial role in the military and aerospace industry. CAES and Space technologies require advanced microelectronics for radar systems, communication, and navigation. However, challenges exist in the supply chain, such as the availability of specific components and the need for high reliability and performance. Rad-hard semiconductors are essential for space applications, but their production is costly and complex. Additionally, the increasing use of artificial intelligence and machine learning in defense applications demands more powerful and energy-efficient semiconductors. The US avails of domestic production through programs like the CHIPS Act to mitigate these challenges. The logistics of procuring and integrating these components into complex systems is also a significant hurdle. Overall, the semiconductor market in military and aerospace faces unique challenges, necessitating continuous innovation and collaboration between industry and academia.

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Segment Overview

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

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

1.1 Memory- The semiconductor market in the military and aerospace industry is experiencing significant growth due to the increasing use of processors in high-reliability applications. Two primary types of memory, Random Access Memory (RAM) and Read-Only Memory (ROM), are essential for these systems. Global semiconductor manufacturers are introducing new technologies, such as GaN/SiC RF power technology, to cater to this demand. The integration of technology in military weapons and the growing use of IoT in aviation and military sectors are further driving this market's expansion.

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Research Analysis

The semiconductor market in the military and aerospace industry is a significant sector, driven by the demand for advanced electronic systems in various applications. Microchips and integrated circuits (ICs), primarily made from pure elements such as silicon and germanium, are essential components in this industry. Compounds like gallium arsenide are also used in the production of N-type and P-type semiconductors for specialized applications. Government sector expenditures on military modernization and defense budgets have fueled the growth of this market. The communications sector, consumer automotive sector, and electronic devices sector also contribute to the demand for semiconductors in this industry. In the military sector, semiconductors are used in space-hardened microprocessors for border security systems, UAV solutions, and drones. The space environment poses unique challenges, including radiation effects from particle radiation, which require semiconductors with high radiation tolerance. The Rafale fleet and F4 standard fighter jets are examples of military platforms that utilize advanced semiconductor technology.

Market Research Overview

The Semiconductor Market plays a significant role in the Military and Aerospace Industry, providing essential components for advanced technology systems. These microchips are integral to various applications, including radar systems, communication networks, navigation technology, and defense electronics. The market's growth is driven by increasing demand for miniaturization, higher performance, and energy efficiency in military and aerospace applications. Additionally, the integration of artificial intelligence and machine learning in defense systems is expected to fuel market expansion. The semiconductor industry's innovation in technologies like Gallium Nitride (GaN) and Silicon Carbide (SiC) is crucial for developing high-power and high-frequency electronic systems in military and aerospace sectors. Furthermore, the market's competitiveness is characterized by continuous research and development efforts to meet the stringent requirements of these industries.

Table of Contents:

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

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

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

About Technavio

Technavio is a leading global technology research and advisory company. Their research and analysis focuses on emerging market trends and provides actionable insights to help businesses identify market opportunities and develop effective strategies to optimize their market positions.

With over 500 specialized analysts, Technavio's report library consists of more than 17,000 reports and counting, covering 800 technologies, spanning across 50 countries. Their client base consists of enterprises of all sizes, including more than 100 Fortune 500 companies. This growing client base relies on Technavio's comprehensive coverage, extensive research, and actionable market insights to identify opportunities in existing and potential markets and assess their competitive positions within changing market scenarios.

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SOURCE Technavio