Report

Global microprocessor market size was valued at USD 102.88 billion in 2022, expected to reach USD 169.25 billion in 2030, with a CAGR of 6.4% for the forecast period between 2023 and 2030. The microprocessor market is thriving due to a surge in demand for high-performance computing and increased use of IoT, 5G, and AI applications, propelling the market growth. Ongoing advancements in energy efficiency and semiconductor technology play a significant role. Market competition and continuous innovation are pushing the market forward. Consequently, the microprocessor market is steadily growing, providing the essential processing power for modern computing and emerging technologies.
The increasing popularity of electric vehicles and the integration of autonomous driving features in the automotive industry have a substantial impact on driving the growth of the microprocessor market. EVs and self-driving vehicles heavily rely on advanced microprocessors for tasks like processing sensor data, enabling artificial intelligence capabilities, and managing connectivity. As these technologies become more widespread, the demand for high-performance microprocessors, including central and graphics processing units, continues to soar. These microprocessors enhance vehicle safety, efficiency, and user experience. The expanding EV and autonomous vehicle market underscores the significance of robust and efficient computing solutions in the automotive sector, thereby propelling the growth of the microprocessor market.
For instance, in May 2023, MIPS partnered with Siemens Digital Industries Software to expedite time-to-market and enhance software development for the MIPS eVocore P8700 RISC-V multiprocessor. This collaboration empowers system-on-chip developers to validate their systems using MIPS CPUs on Siemens' Veloce proFPGA platform, promoting early hardware-software codesign. The eVocore P8700, known for its scalability and high performance, is particularly relevant in applications like autonomous driving and ADAS.
Growing Demand for Computing Power Promote the Market's Growth
The surge in the demand for enhanced computing capabilities drives the microprocessor market's growth. This heightened need for computing power is evident in various sectors, including data centers, artificial intelligence, gaming, and edge computing. The demand for efficient processing of vast amounts of data in data centers necessitates advanced microprocessors. AI and machine learning applications depend on powerful processors for complex algorithm processing. Gaming requires increasingly sophisticated CPUs and GPUs to deliver realistic experiences. Additionally, edge computing relies on microprocessors for rapid and real-time decision-making. The expanding requirement for computational power in diverse fields propels the demand for advanced microprocessors, which in turn, is fueling the market growth.
For example, in October 2023, Intel introduced its 14th-generation desktop processors, led by the Intel Core i9-14900K, which boasts up to 24 cores, 32 threads, and clock speeds reaching 6 GHz. These CPUs cater to enthusiasts and offer remarkable overclocking potential.
Enhanced Connectivity Driving Demand for Microprocessor Market
The microprocessor market experiences growth due to the expanding connectivity facilitated by the internet, social media, and interconnected devices. The increasing prevalence of online interactions, social networking, and the Internet of Things necessitates advanced microprocessors for efficient data processing, instantaneous communication, and network administration. These microprocessors are vital in enabling smooth connectivity and data exchange across diverse devices. As the world becomes more intertwined, the demand for microprocessors in networking and communications remains upward, making them a critical element in supporting the ever-evolving digital environment and driving market growth.
For example, in October 2023, AMD introduced the Ryzen Threadripper PRO 7000 WX-Series processors, targeting professionals, with a maximum of 96 cores, and the Ryzen Threadripper 7000 Series processors, created for enthusiasts with a maximum of 64 cores.
Environmental Concerns Contributing to the Microprocessor Market
Environmental concerns are propelling the microprocessor market. There is a strong inclination towards energy-efficient microprocessors that minimize power usage and heat production, aligning with the global sustainability objectives. As the world focuses on reducing carbon emissions and energy consumption, manufacturers prioritize microprocessor technologies that offer better performance with less power. These energy-efficient processors are essential for eco-friendly computing practices and are in high demand across various sectors, including data centers, IoT devices, and mobile computing. With both businesses and consumers seeking environmentally responsible solutions, the market for energy-efficient microprocessors is on the rise, playing a pivotal role in sustainable technology and market expansion.
For instance, in June 2023, AMD announced an extension of its collaboration with Amazon Web Services to introduce Amazon EC2 M7a instances featuring 4th Gen AMD EPYC processors. The partnership enhances cloud performance for a wide range of applications.
Asia-Pacific Dominates Microprocessor Market
Asia-Pacific leads the microprocessor market due to several key factors. Asia-Pacific is home to major semiconductor manufacturers like TSMC, Samsung, and SMIC, which produce cutting-edge microprocessors for global consumption. The region benefits from a sizable and expanding consumer electronics sector, encompassing smartphones and IoT devices, which fuels a high demand for microprocessors. Moreover, Asia-Pacific countries, especially China, have made significant investments in areas such as artificial intelligence, data centers, and 5G infrastructure, resulting in a substantial requirement for advanced microprocessors. With its vibrant tech ecosystem, robust manufacturing capabilities, and growing technological investments, Asia-Pacific stands at the forefront of the global microprocessor market.
For instance, in June 2023, with its 10-core CPU processor, Samsung's Exynos Auto V920 chip is intended to power Hyundai's forthcoming in-vehicle entertainment systems, increasing performance and safety in the automotive user experience.
Government Initiatives are Supplementing the Microprocessor Market Growth
Government efforts to support the microprocessor market are of paramount importance globally. In the United States, these initiatives are spearheaded by the Office of Science and Technology Policy (OSTP) and the National Science and Technology Council (NSTC). They offer guidance to the President on scientific and technological matters, facilitate policy coordination among federal agencies, and devise research and development strategies. Specialized committees, including the Select Committee on Artificial Intelligence and the Subcommittee on Machine Learning and Artificial Intelligence, are dedicated to advancing AI and machine learning, both reliant on advanced microprocessors. These governmental endeavors aim to uphold the United States leadership in technology, fostering innovation, and encouraging collaboration between the public and private sectors.
For Instance, in June 2023, Texas allocated USD 1.4 billion for microchip research and manufacturing, establishing the Texas Semiconductor Innovation Fund to drive investment, job creation, and federal support through the CHIPS Act for domestic semiconductor production. The move leverages Texas' strong semiconductor industry ecosystem, thereby driving the demand for microprocessor.
Impact of COVID-19
The COVID-19 pandemic had a significant impact on the microprocessor market. Before the pandemic, the semiconductor industry faced issues such as trade wars, natural disasters, and shifts in demand. However, the pandemic exacerbated these problems, resulting in a global chip shortage. With the rise in remote work and learning, demand for consumer electronics surged, causing supply challenges and price increases. Although, the shortage improved in 2022, macroeconomic factors and market fluctuations affected chip sales. The talent shortage in the semiconductor industry remains a barrier to growth and innovation. Despite efforts to boost research and production, the exact end of the chip shortage remains uncertain, and market dynamics continue to shape chip demand.
Impact of Russia-Ukraine War
The Russia-Ukraine war had a significant impact on the microprocessor market. The United States semiconductor industry is committed to adhering to stringent export control regulations from the United States and its allies to deter Russian aggression. For instance, according to the Semiconductor Industry Association, trade restrictions in Russia have led to a substantial drop of over 90% in the United States semiconductor exports to the country in 2022. However, reports have emerged suggesting that Western semiconductors have still been incorporated into Russian military equipment, including drones provided by Iran. These developments underscore the challenges in preventing the unauthorized acquisition and misapplication of semiconductors, particularly given their dual-use nature and the intricate global supply chains involved.
Key Players Landscape and Outlook
In the highly competitive microprocessor market, industry leaders play a pivotal role. Major players such as Intel Corporation, NVIDIA Corporation, Qualcomm Technologies, Inc., Taiwan Semiconductor Manufacturing Company Limited, and Samsung Electronics Co., Ltd are central to shaping this dynamic landscape. These companies are at the forefront of driving innovation, influencing technological advancements, and setting industry standards. They offer cutting-edge products catering to diverse applications, ranging from personal computing to artificial intelligence and mobile devices. As the market continues to transform, these key players are poised to mold its future by leading in research, development, and meeting the increasing demand for high-performance microprocessors.
In October 2023, NVIDIA and Foxconn joined forces to establish AI factories and systems to advance the AI industrial revolution. Foxconn will integrate NVIDIA technology to create data centers that support manufacturing, AI-driven electric vehicles, robotics, and other applications.
In July 2023, TSMC established a global research and development center in Taiwan, specializing in advanced semiconductor tech, materials, and transistor structures, indirectly influencing the microprocessor market through technological progress.