Top 10 semiconductor technology fields with the most development potential in 2023
The semiconductor industry is an indispensable cornerstone of a country’s industrial prosperity. According to the data, the global semiconductor market size were US$598 billion in 2022, a year-on-year increase of 7.6%. It is estimated that the global semiconductor market size will be US$625.5 billion in 2023,a year-on-year increase of 4.6%.
The semiconductor industry involves many fields, but people pay more attention to which fields the semiconductor industry chain companies are more focused on. To this end, this article introduces the top 10 technology fields that have the most application prospects and can generate the most practical value and commercial value.
Micro LED display has the characteristics of self-illumination, high efficiency, low power consumption, and high stability. It is an important choice for the next generation of mainstream display technology and has room for development in many application fields.
At present, with the development and maturity of various mass transfer technologies such as electrostatic force adsorption transfer technology, fluid assembly transfer technology, elastic die transfer technology, selective release transfer technology, and roller transfer transfer technology, the application of Micro LED is expected to be further accelerated in the future.
Mini LED backlight has the characteristics of higher color gamut, ultra-high contrast ratio, higher dynamic range and thinner display screen, which greatly reduces the display gap between LCD and OLED. The future development direction of Mini LED covers large, medium and small size LCD display backlight and LED display.
Micro LED and Mini LED are the development directions of next-generation display technology.With the gradual maturity of related technologies,the application of Micro LED/Mini LED will be further accelerated in the future, creating new growth points for enterprises with business and technology layout in related fields.
In 2022, Xiaopeng, NIO, Cadillac and other brand cars used Mini LED for on-board display, including the instrument panel, large wrap-around screen and central control screen. 2023 will be the first year of the real explosion of Mini LED in the field of smart cockpits.
In the era of electrification, basically all terminals using lithium batteries need to be installed with a BMS (Battery Management System) for battery protection, which has gradually become necessary.
BMS chips can be divided into different categories and application scenarios. Among them, 1-4 lithium battery BMS chip correspond to consumer electronic products such as earphones, mobile phones, and PCs; 4-14 correspond to power small household appliances, power tools and moped products; 14-20 correspond to small energy storage and communication base station products.
While large energy storage and new energy vehicles use dozens to hundreds of batteries connected in series, requiring multiple BMS systems to manage through a certain topology.
Benefiting from the rapid development of industries such as industrial control, energy storage, and new energy vehicles, the BMS market has ushered in rapid growth in recent years. According to the data, the global BMS market size is expected to be US$6.512 billion in 2021, and is expected to reach US$13.1 billion by 2026, with a CAGR of 15%.
In the segments of energy storage, new energy vehicles, and electric two-wheelers, the compound annual growth rates of the BMS battery management chip market are as high as 72.34%, 40.07%, and 36.18%, respectively.
3. AI chip
With the technological breakthroughs in the field of deep learning, artificial intelligence (AI) has achieved rapid development in both scientific research and industrial applications. Deep learning algorithms require a large number of matrix multiplication and addition operations, and have high requirements for large-scale parallel computing capabilities. CPUs and traditional computing architectures cannot meet the requirements for parallel computing capabilities, and special customized chips are required.
At present, the AI chip industry has started and developed rapidly, and has been widely used in scenarios such as mobile terminals, data centers, autonomous driving, smart security, and smart homes.
From the perspective of technical architecture, AI chips are mainly divided into four categories: graphics processing unit (GPU), field programmable gate array (FPGA), application-specific integrated circuits (ASIC), and brain-like chips. Among them, the biggest advantage of FPGA lies in the configuration flexibility brought by programmability.
With the gradual enrichment of the FPGA developer ecosystem and the increase of applicable programming languages, the application of FPGA will be more extensive. Therefore, in the short term, FPGA will remain a hot spot as a hardware choice that takes into account both efficiency and flexibility.
In terms of market size, with the development of big data and the improvement of computing power, the global AI chip market reached approximately US$26.5 billion in 2021. With the maturity of artificial intelligence technology and the continuous improvement of digital infrastructure, the commercial application of AI will be accelerated, which will promote the rapid growth of the AI chip market. It is estimated that the global artificial intelligence chip market will exceed 70 billion US dollars in 2025.
4. Smart cockpit
The smart cockpit focuses on human-computer interaction. The core is to make the car understand people better. It is relatively less difficult to realize and easier to implement. In recent years, driven by many OEMs and ecological partners, the commercialization of smart cockpits has accelerated.
The intelligentization of automobiles takes chips as the core. Among them, the SoC chip, as the computing power core of the smart cockpit, can organically integrate LCD instrumentation, HUD, vehicle infotainment system, DMS&OMS, voice recognition and ADAS functions, so as to achieve a more active, comprehensive and personalized “human-computer interaction”.
In the future, with the transformation of the automotive electronic and electrical architecture to a domain-centralized one, the demand for SoC chips with higher computing power will increase rapidly. According to the data, the current value of a single SoC chip is about 1,000 RMB. It is estimated that the market size of SoC chips in China is expected to reach 26 billion RMB by 2026, and the CAGR will reach 25% from 2021 to 2026.
With the advantages of wide detection range, strong anti-interference ability, and high-precision ranging, lidar is regarded as an indispensable sensor for high-level automatic driving solutions, which can greatly improve the perception ability of intelligent driving systems in different scenarios such as high-speed and urban areas , and then improve the safety and experience of intelligent driving.It has been widely used in ADAS, automatic driving and other fields.
After the design introduction of lidar in 2021, it were launched in batches for the first time in 2022. According to statistics, there are currently more than 10 automakers on the market that are equipped with lidar. In terms of models, each manufacturer has launched at least one model equipped with lidar, and some even launched more than 2-3 models. For example, car companies such as Xiaopeng,NIO, and SAIC have already equipped lidar on a variety of models.
6. Power semiconductor
IGBT is a composite fully-controlled voltage-driven power semiconductor device composed of MOSFET and BJT, which has been widely used in rail transit, consumer electronics, smart grid, aerospace and other fields.
At present, the demand for car-grade IGBTs has entered a stage of high growth, and the value of bicycles continues to increase. In the cost structure of new energy vehicles, IGBT and IGBT modules account for 50% of the drive system and 8-10% of the total vehicle cost. They are the most expensive single components in new energy vehicles.
From the perspective of the supply chain, since 2021, due to the continuous increase in the new demand for IGBTs in various downstream applications,the delivery cycle of IGBTs has been extended, and the contradiction between supply and demand of IGBTs is obvious. At the beginning of 2022, semiconductor suppliers such as Infineon and STMicroelectronics successively issued price increase notices, and ON Semiconductor stopped some supplies.
According to Yole’s data, the total market demand for IGBTs in China from 2019 to 2021 is 95 million, 110 million, and 132 million. However, the output of China’s IGBT industry is only 15.5 million, 20.2 million, and 25.8 million. The self-sufficiency rate is less than 20%.
(2) Third-generation semiconductors
The third-generation semiconductors represented by gallium nitride GaN and silicon carbide SiC have excellent characteristics such as wide bandgap, high breakdown electric field strength, and high thermal conductivity, and can withstand voltages of hundreds of volts, even thousands of volts. They are suitable for high voltage, high frequency, high power fields.
Among them, GaN is more suitable for radio frequency devices, such as the PA power amplifier chip of the radio frequency front end. SiC is more suitable for high-voltage and high-power devices, such as photovoltaic inverters and 800V fast charging of new energy electric vehicles.
In recent years, due to the continuous growth of downstream demand such as new energy vehicles, the global silicon carbide market has continued to expand. According to Yole statistics, the market size of silicon carbide power devices were approximately US$710 million in 2020, and is expected to grow to US$4.5 billion in 2026, with a CAGR of nearly 36% from 2020 to 2026.
Among them, China is the largest application market for new energy vehicles in the world, and its silicon carbide market is expected to grow from 1.46 billion RMB in 2020 to 16.47 billion RMB in 2024, with an average annual compound growth rate of 83.2%.
In 2022, the AR/VR market received higher attention than before. Coupled with the news that Apple is about to launch MR products in 2023, manufacturers in the industry chain seem to usher in a stimulant.
In terms of market size, due to the influx of industry giants and the addition of capital, the AR/VR industry has developed rapidly. According to the latest report of IDC, the total investment scale of the global AR/VR industry were close to 14.677 billion US dollars in 2021, and it is expected to increase to 74.730 billion US dollars by 2026, with a compound annual growth rate of 38.48%.
In terms of shipments, according to IDC data, global VR/AR headset shipments reached 11.23 million units in 2021, a year-on-year increase of 92.1%. Among them, the shipment of VR headsets reached 10.95 million units, breaking through an important inflection point of the industry with annual shipments of 10 million units.
In addition, according to VR Gyro statistics, the global shipment of VR headsets in the first half of 2022 were about 6.84 million units, a year-on-year increase of 60%. The shipment volume of VR headsets in China was 605,800 units, accounting for about 8.86%.
8. Storage and calculation integrated chip
In the post-Moore era, the existing von Neumann computing system adopts an architecture that separates storage and computing, which severely restricts the improvement of system computing power and energy efficiency.
As a new type of computing power, the integration of storage and computing is expected to solve the problems of “storage wall” and “power consumption wall” under the traditional von Neumann architecture. It is a breakthrough technology in the field of computing power that is of great concern to the industry, and has been identified as one of the key technologies of the computing power network.
Based on its different device characteristics and computing methods, in-memory computing products can provide various AI capabilities such as reasoning and training for cloud, edge, and end applications to improve the computing efficiency of AI chips and reduce system power consumption and equipment costs.
Since the RISC-V instruction set is open source, free, modular, and streamlined, the industry has continued to build an ecosystem around it since it came out in 2010. In recent years, with the rapid development of AIOT, the RISC-V ecosystem has ushered in rapid development.
From the perspective of market development space, according to incomplete statistics , the global RISC-V instruction set market size were about 220 million US dollars in 2020,and is expected to exceed 1 billion US dollars by 2024. From the perspective of shipments, according to data from the market Semico Research Group, it is estimated that by 2025, there will be more than 62.4 billion processor cores using the RISC-V architecture in the market, with a compound annual growth rate of 146% from 2018 to 2025.
10. Chiplet advanced packaging
The advanced packaging of heterogeneous integration has undoubtedly become one of the most important engines for the development of the semiconductor industry in the post-Moore era. Chiplet can divide a large single-chip chip into multiple small chips, and integrate modular chips with different processes or functions through cross-chip packaging and interconnection, thereby finally forming a system chip. This can improve chip yield, reduce the need for advanced manufacturing processes.
In terms of market size, as high-performance servers/data centers, autonomous driving, notebooks/desktop computers, and high-end smartphones become the main application scenarios for Chiplets in the next few years, the Chiplet market will continue to grow. According to Gartner’s prediction, the sales revenue of Chiplet-based semiconductor devices will increase from US$3.3 billion in 2020 to US$50.5 billion in 2024, with a compound annual growth rate of 98%.
By then, more than 30% of SiP packages will use Chiplets to optimize cost, performance and time-to-market. 60% of the Chiplet market opportunities will be smartphone and server applications, and the sales revenue of Chiplet-based computing MPUs for PC and server terminals will also exceed US$22 billion.
In this context, on March 2, 2022, 10 industry giants including Intel, AMD, Arm, Qualcomm, Microsoft, Google, Meta, TSMC, ASE, and Samsung officially established the Universal Chiplet Interconnect Express (UCIe) ) industry alliance to jointly promote the standardization of Chiplet interface specifications and promote the rapid development of Chiplets.
Since the second half of 2022, the capacity utilization rate of semiconductor manufacturing plants has declined, and they have begun to reduce capital expenditures or reduce production capacity, which means that the overall demand for semiconductors in 2023 will not improve much compared to 2022.
However, from the perspective of market segments, the electrification (BMS), intelligence (smart cockpit chip, lidar), data center (AI chip), photovoltaic (IGBT), consumer electronics (VR/AR) of new energy vehicles analyzed in this paper and many other terminal markets are still in high prosperity, which will generate more demand for semiconductor products.
In 2023, in the changing market environment and many uncertainties, we should grasp the development opportunities with strong certainty.The development prospects of the semiconductor industry are still worthy of our expectations.