Semiconductor in Aerospace Market - Forecast(2024 - 2030)

The semiconductor in aerospace market size is forecast to reach USD 78.21 billion by 2029, after growing at a CAGR of 6.34% during 2024-2029. The expansion is ascribed to the advancements in aviation technology, increasing demand for more advanced and efficient aircraft, and the growth of the space industry. Factors such as the rising number of commercial aircraft, the modernization of defense aircraft, and the growing space exploration and satellite market contribute to the market's expansion. For instance, Boeing projects that by 2038, the airline sector will require over 44,000 new commercial aircraft valued at $6.8 trillion.

The increased use of UAVs is the key opportunity in the market for aerospace sector growth. improvements in weaponry and assaulting capabilities around the world have created a requirement for governments to modernize and install sophisticated military infrastructure to prepare for any unprecedented threats and offensive strikes from foreign countries. As a result, militaries throughout the world are investing in UAV solutions such as drones to ensure the successful operation of advanced security systems, creating a demand for upgraded semiconductor components.

The report “Semiconductor in Aerospace Market– Forecast (2024-2029)”, by IndustryARC, covers an in-depth analysis of the following segments of the semiconductor in aerospace market.

By Component: Sensors & actuators, Optical, Memory, Microcontroller, Analog ICs, Logic and Discrete Power Devices, Others

By Packaging Type: Plastics, Ceramic

By Technology: Surface mount technology, Through-hole technology

By Application: Ruggedized communications, Imaging and Radar, Smart munitions, Space, Others

By End-User: Power payload, Power management, RF Systems, Avionics, Aircraft, Others

By Geography:  North America, South America, Europe, Asia-Pacific

• Increased aircraft modernization and upgrade programs is driving the semiconductor sector in aerospace. For example, in October 2023, the Air Force Reserve Command's C-130H Hercules fleet began testing a substantial upgrade to its avionics system, marking the shift from analog to digital. The update, known as Avionics Modernization Program Increment 2 significantly improves the avionics and navigation systems of the nearly 60-year-old aircraft.

• Miniaturized technology is increasingly being used in aerospace applications. Complex miniaturized parts and micro/nanotechnologies, such as specialized ICs, MEMS (micro-electromechanical systems), and RF sub-systems, are the amazing building blocks underlying these ground-breaking advances. AI-powered visual and sensory control systems, futuristic wearable technologies, multi-operational UAVs, and micro-satellites that resemble science fiction, to mention a few.

• The US is the dominant Country in the semiconductor in aerospace market due to its strong commitment to defense investment. The Federal Aviation Administration (FAA) projects that between 2023 and 2043, system traffic in revenue passenger miles (RPMs) will rise by 3.2% annually. Given the variety of electronic systems found in aircraft, these developments help to sustain the nation's need for semiconductor devices.

Logic and discrete power devices dominated the semiconductor in aerospace market in 2023. Aerospace systems use logic and discrete power devices to control the power supply and maintain the attitude, altitude, speed, and trajectory of the aircraft. Aerospace applications are demanding reliable, radiation-hardened, and power-efficient logic devices. In July 2022, a 50W silicon radio-frequency (RF) high-power metal-oxide-semiconductor field-effect transistor (MOSFET) module was disclosed by Mitsubishi Electric Corporation. This module is intended to be used in commercial two-way radio high-frequency power amplifiers. In April 2022, Magnachip developed a new 40V MOSFET with low RDS (on) to reduce conduction loss in automobile BLDC motors. All AEC-Q101 criteria are met by the new 40V MOSFET.

Ceramic packaging dominated the semiconductor in aerospace market in 2023. Ceramic offers excellent thermal conductivity and high electrical insulation, which are crucial for protecting sensitive semiconductor components in aerospace applications. Surface mount technology (SMT) is indeed a widely used technology in aerospace semiconductor manufacturing. SMT involves mounting electronic components directly onto the surface of printed circuit boards, eliminating the need for conventional through-hole mounting.

As per the World Semiconductor Trade Statistics (WSTS), the semiconductor industry revenue in Japan experienced a 14.2% growth in 2022 and is anticipated to continue growing in the upcoming years. The main reason for the country's rising packaging need is its notable achievements in the integrated chip and semiconductor industries.

Surface mount technology dominated the semiconductor in aerospace market in 2023. Weight and size considerations, among other important criteria, have contributed to the expansion of Surface Mount Technology (SMT) in the semiconductor industry, especially in the aerospace market. Due to size and weight restrictions, electronic components used in aerospace applications must frequently be small and light. SMT components help save weight in aircraft since they are typically lighter and smaller than their through-hole counterparts, making better use of available space. Improved high-frequency performance is the result of shorter signal pathways, lower parasitic capacitance, and reduced inductance made possible by SMT technology. This is especially crucial in aerospace applications where signal integrity and high-speed communication are essential.

Ruggedized communications dominated the semiconductor in aerospace market in 2023. Applications in aerospace are subject to harsh environmental factors, such as temperature fluctuations, intense vibration, shock, and electromagnetic interference. Ruggedized communication systems are built with parts and technology that are resistant to these extreme circumstances, guaranteeing consistent and dependable performance. As a result, ruggedized communications are growing in semiconductors in aerospace market.

For instance, in September 2023, Concurrent Technologies, an embedded computing company, announced that it had acquired Phillips Aerospace, a rugged computing company, for approximately $3.38 million. Concurrent Technologies said in a statement that the acquisition improves the business's capacity to develop and produce rugged systems that make use of its current plug-in cards.

RF Systems dominated the semiconductor in aerospace market in 2023. RF Systems enable wireless communication, radar systems, satellite navigation, and various other applications. In aerospace applications, RF technologies are essential for wireless communication. This covers air-to-air communication, communication with other airborne platforms, and communication between aircraft and ground stations. Radar systems, which are essential for military applications, weather monitoring, and navigation, are built on radiofrequency technology.

Radar systems for aircraft and ground-based installations are developed using semiconductor devices such as integrated circuits and radio frequency transistors. For instance, in October 2023, Researchers from the United States military requested that the semiconductor industry provide novel integrated circuit substrates, device layers, junctions, and low-resistance electrical connections for a forthcoming generation of ultrawide-bandgap semiconductors. For future uses in quantum electronics, deep-ultraviolet electro-optics, RF and high-power electronics, and systems that must function in hostile conditions, ultrawide-bandgap technology offers a new class of semiconductors.

Asia-Pacific dominated the dominated the semiconductor in aerospace market in 2023. The aerospace industry heavily relies on semiconductors for various applications such as navigation systems, communication systems, avionics, and more. APAC's dominance in the semiconductor sector, combined with its strong aerospace manufacturing capabilities, has led to its high market share in this specific field. 

China has walked a difficult path to progress from importing and copying to developing and producing in its scientific and technology fields, including aeronautical research. These innovations will raise market demand even more. For example, in January 2024, Chinese business Betavolt developed an atomic power battery for consumers with a claimed 50-year lifespan. The design makes use of the country's first diamond semiconductor material. In November 2023, the government announced a new ¥1 trillion ($6.6 billion) fund for the Japan Aerospace Exploration Agency (JAXA) to expand the country's space industry over 10 years. Therefore, with the growing government support, the semiconductors industry is expected to see a further flood sought after as a result of the growing consumption of advanced electronic devices.

The demand for lightweight and energy-efficient solutions in the aerospace industry is anticipated to drive the semiconductor market within this sector. The aerospace industry has always emphasized weight reduction and fuel efficiency to improve aircraft performance and reduce operational costs. Semiconductors play a crucial role in achieving these goals by enabling advanced electronics and systems on aircraft.

The integration of advanced semiconductor technologies also leads to enhanced functionality, reliability, and safety in aerospace systems. They enable features such as advanced sensor capabilities, increased automation, improved connectivity, and data processing, thereby enhancing overall aircraft performance and passenger experience. Lightweight semiconductors, such as advanced microprocessors and power electronics, enable significant weight savings in aircraft, resulting in reduced fuel consumption and lower emissions. Moreover, energy-efficient semiconductor technologies contribute to minimizing power losses and improving overall system performance.

The aerospace industry has witnessed a rapid transition towards advanced avionics and communication systems, driven by the need for enhanced safety, efficiency, and connectivity. Modern aircraft demand sophisticated navigation systems, satellite communication, weather sensors, surveillance systems, and more, all of which are enabled by semiconductors.

The aerospace industry's growing reliance on avionics and communication systems is driving the need for more advanced and specialized semiconductor solutions. For instance, according to the Federal Aviation Administration, in 2021, Aviation Research Grants of $7,346,411.10 have been awarded for a total of 20 projects. This has led to increased investments in research and development for aerospace-specific semiconductors, such as radiation-hardened processors, high-speed data converters, RF transceivers, and power management devices.

The aerospace industry has unique requirements for semiconductor components, including strict safety regulations, reliability, and performance under extreme conditions. Meeting these demands necessitates the utilization of advanced technologies and materials, resulting in higher production costs.

Moreover, the low volume and specialized nature of aerospace semiconductor applications limit economies of scale in production. Unlike the consumer electronics industry, where large quantities can be manufactured to reduce costs, the aerospace sector often requires unique, customized solutions for specific applications. This further increases the price of semiconductor production, as there is limited mass production and a need for specialized expertise.

The semiconductor industry in the aerospace market operates under long development cycles, which can be considered as a constraint. This industry involves the design, manufacturing, and integration of semiconductors for aerospace applications, including avionics, communication systems, navigation systems, and more.

Due to the critical nature of aerospace applications, there is a need for high reliability, durability, and performance in semiconductor components. These requirements further extend the development cycles as extensive testing under different conditions and environments is necessary to ensure the utmost quality and safety.

Technology launches, acquisitions, and R&D activities are key strategies adopted by players in the semiconductor in aerospace market. In 2023, the classic semiconductor in aerospace market share has been consolidated by the major players accounting for 50.61% of the share. Major players in the classic semiconductor in aerospace market are Raytheon Technologies Corporation, Honeywell International Inc., Analog Devices, Inc., NEC Corporation, Microchip Technology Inc., ON Semiconductor Corporation, STMicroelectronics, Texas Instruments, Teledyne Technologies Inc. among others.

 In October 2023, Infineon Technologies AG acquired GaN Systems Inc. The acquisition of GaN Systems greatly accelerates the GaN roadmap and reinforces Infineon's leadership in power systems via mastery of all important power semiconductor technologies.

 In February 2023, Microchip Technology Inc. invested $880 million to expand silicon carbide (SiC) and silicon (Si) production capacity at its Colorado Springs, Colo. manufacturing facility over the next five years. One important aspect of the expansion is the development and restoration of its 50-acre, 580,000-square-foot Colorado Springs facility to increase SiC production for automotive/e-mobility, grid infrastructure, renewable energy, and aerospace and defense applications.

 In June 2023, Airbus and STMicroelectronics partnered on power electronics R&D to support more efficient and lighter power electronics, which are critical for future hybrid-powered aircraft and full-electric urban air vehicles.