KSA Semiconductor Market Outlook to 2030

KSA Semiconductor Market Overview

• In recent years, the KSA semiconductor market has experienced substantial growth, this is reflected by the global semiconductor market reaching a valuation of USD 540 billion in 2023 growing at a CAGR of 7.20% between 2023-2028 driven by the increasing demand for electronic devices, advancements in technology, and the rising adoption of IoT devices.
• The KSA semiconductor market is fragmented. The key players in the KSA semiconductor market include Intel Corporation, Samsung Electronics, Texas Instruments, Broadcom Inc., and Qualcomm Technologies.
• In 2023, Saudi Arabia announced a strategic partnership with Intel Corporation to establish a semiconductor fabrication plant in the country. This development is part of the government's effort to enhance local manufacturing capabilities and reduce dependence on imports.
• Riyadh, the capital city of Saudi Arabia, dominates the semiconductor market due to its advanced infrastructure, availability of skilled labour, and supportive government policies.

KSA Semiconductor Market Segmentation

The KSA Semiconductor market is segmented by various factors like product, application, and region.

By Product Type: The KSA semiconductor market is segmented by product type into integrated circuits, discrete semiconductors, and optoelectronics. In 2023, integrated circuits dominated the market driven by their widespread application in consumer electronics, automotive, and telecommunications. The increasing demand for high-performance computing and advanced communication systems has fueled the growth of the IC segment.

By Application: The KSA semiconductor market is segmented by application into consumer electronics, automotive, and telecommunications. In 2023, consumer electronics dominated the market. The increasing penetration of smartphones, tablets, and wearable devices has driven the demand for advanced semiconductor components.

By Region: The KSA semiconductor market is segmented by region into North, South, East, and West. The northern region dominated the market in 2023. This region is known for its industrial hubs and tech parks that attract substantial investments in semiconductor manufacturing and R&D activities.

KSA Semiconductor Market Competitive Landscape

• Intel Corporation: KSA Intel Corporation announced a strategic investment of SAR 500 million in Saudi Arabia's semiconductor industry in 2023. This investment includes the establishment of a semiconductor fabrication plant and a research and development center.
• Qualcomm Technologies: Qualcomm Technologies announced a strategic partnership with Saudi Aramco in 2023 to develop advanced semiconductor solutions for energy management systems. This partnership aims to enhance the efficiency and sustainability of Saudi Arabia's energy sector, with a projected investment of SAR 200 million over the next five years.

KSA Semiconductor Market Analysis

KSA Semiconductor Market Growth Drivers

• Expansion of the Telecommunications Sector: The KSA telecommunications sector is expanding rapidly, with over 42.5 million active cellular mobile connections in 2023. This surge in connectivity is driving demand for advanced semiconductor components required for 5G infrastructure. The government's investment of SAR 3 billion in 5G technology is further accelerating this growth.
• Automotive Industry Shift to Electric Vehicles: The automotive industry's transition towards electric vehicles (EVs) is a important growth driver. Saudi Arabia's EV imports rose to 779 units in 2023, up from only 210 units in 2022. This shift is creating a robust demand for semiconductor chips used in EV powertrains, battery management systems, and in-car entertainment systems.
• Growing IoT Ecosystem: The Internet of Things (IoT) ecosystem is expanding rapidly in Saudi Arabia, with over 10 million connected devices reported in 2023. This growth is driving the demand for semiconductors that enable connectivity, data processing, and security in IoT applications. The Saudi IoT market is projected to attract investments worth SAR 2 billion by 2025, as per the Ministry of Communications and Information Technology.

KSA Semiconductor Market Challenges

• Shortage of Skilled Labor The semiconductor industry in KSA faces a noteworthy challenge due to the shortage of skilled labour. This hampers the industry's growth and innovation capabilities. The lack of specialized training programs and higher education courses tailored to semiconductor technology exacerbates this issue. The government's efforts to bridge this gap through scholarships and international collaborations have yet to yield substantial results.
• Supply Chain Disruptions Global supply chain disruptions have impacted the semiconductor market in Saudi Arabia. In 2023, delays in the import of essential semiconductor materials and components led to production slowdowns and increased costs. The COVID-19 pandemic and geopolitical tensions have further strained the supply chain. These disruptions are challenging the market's ability to meet the growing domestic and international demand.

KSA Semiconductor Market Government Initiatives

• Semiconductor Development Initiative: In 2023, the Saudi government launched the "Semiconductor Development Initiative," with a budget allocation of SAR 500 million. This initiative aims to support research and development in the semiconductor sector, fostering innovation and attracting foreign investments.
• National Industrial Development and Logistics Program (NIDLP): The NIDLP, part of Vision 2030, includes a focus on developing the semiconductor industry. In 2023, the program allocated SAR 200 million to establish new semiconductor manufacturing facilities and enhance existing ones.

KSA Semiconductor Future Market Outlook

The KSA semiconductor market is poised for remarkable growth, driven by integration of ai and machine learning in semiconductor design, development of advanced semiconductor materials, and growth of the semiconductor manufacturing equipment market.

Future Market Trends

• Integration of AI and Machine Learning in Semiconductor Design Over the next five years, the integration of artificial intelligence (AI) and machine learning (ML) in semiconductor design will become a important trend. AI and ML technologies will enhance the efficiency and accuracy of semiconductor manufacturing processes, leading to the development of more advanced and reliable components.
• Development of Advanced Semiconductor Materials The development of advanced semiconductor materials, such as gallium nitride (GaN) and silicon carbide (SiC), is expected to drive innovation in the KSA semiconductor market. These materials offer superior performance and energy efficiency compared to traditional silicon-based semiconductors.