Global Digital Signal Processor Market - Growth, Trends, and Forecasts (2022 - 2027)

The digital signal processor market is expected to register a CAGR of 7.28% during the forecast period (2022 - 2027). The digital signal processor market is anticipated to witness a significant growth owing to the excessive usage of digital signal processor chips in the consumer electronics market. Several consumer electronics, such as mobile phones, have become a major requirement worldwide and have observed a considerable surge in the users. According to the BankMyCell, the mobile phone users worldwide has increased significantly from 4.30 billion users in 2016 to 7.10 billion users in 2021.

Key Highlights

• Within the mobile phone industry, a major portion of customers use smartphones. The number of smartphones users increased from 6.02 billion in 2020 to 6.37 billion in 2021. Further, based on forecast figures by Ericsson and The Radicati Group, the smartphone users are expected to increase to 7.33 billion by 2025. Mobile devices are the major adopters of digital signal processors, and their growth is further anticipated to boost the market size for digital signal processors during the forecast period.
• Additionally, an increase in data traffic and the usage of technologies such as Internet Protocol (IP) cameras for video surveillance are expected to boost product demand worldwide. Moreover, the digital signal processing has grown as the leading technology for developing high-performance communication systems attributing to the cost benefits it offers.
• However, due to challenging real-time limitations, although performance has always been the most critical parameter for digital signal processor quality comparison; the past two decades have seen a drift in the same. Through rapid migration of digital signal processor from military applications to low-cost applications in the portable devices such as laptops, smartphones, and CD players, the power consumption and cost has become a crucial parameter while selecting a digital signal processor.
• Further, the effect of COVID-19 on the mobile devices market has been moderate. Moreover, the pandemic changes the perception of the current global supply chain in manufacturing, potentially leading to more localized value chains and further regionalization to minimize similar risks in the near future.
• The decline in consumer spending owing to the pandemic has led to a decline of smartphone sales to a certain level, which has eventually declined the demand for digital signal processors on a short-term basis. The decline in disposable income is mainly due to the negative effect of the pandemic on economic conditions.

Key Market Trends

Growing Applications in Automotive Industry

• Digital signal processors find widespread usage in the automotive sector for manufacturing vehicle surveillance equipment and vehicle parts. These processors are specially used by location-based service vendors, for remote diagnostic systems, alignment systems, and intelligence transportation systems in order to fine-tune engine performance, keep a track on vehicles, and control traffic flow.
• Digital signal processors are often used in in-cabin infotainment systems and in control systems, which have demanding signal-processing performance needs. These processors involve specialized features such as high memory bandwidth, fast multiply-accumulate hardware, and instructions that combine multiple operations.
• Further, an increase in requirement of safety boosts the usage of digital signal processor-controlled braking, collision avoidance systems, and air bags in vehicles. Thus, contributing to the growth of the market.
• Automotive industry has faced the blunt of the pandemic, with exponential decline in demand for passenger vehicles and investments. According to the data published by OICA, in 2020, the number of passenger cars sold across the world stood at 53.9 million which was 64.0 million during the previous year. However, the industry is witnessing a positive growth trend since 2021.

APAC to Register Highest CAGR in Market During Forecast Period

• The digital signal processor market in the Asia-Pacific region is expected to proliferate rapidly during the forecast period. The region is a major market for electronics manufacturing and extensive usage of digital signal processors in the electronics industry, which in turn, is expected to fuel the growth of the digital signal processor market in the region.
• Significant demand for smartphones from countries, such as India, China, Japan, and South Korea, are encouraging many vendors to set up production facilities in the region. The availability of raw materials along with low establishment and labor costs have also motivated companies to establish their production centers in the region. Along with manufacturing benefits the strong demand and rapid growth is also influencing mobile phone companies to set up their production facilities in Asia Pacific region. The expansion of mobile phone companies in the region is further anticipated to drive the demand for digital signal processors and thereby strengthen regional market growth.
• India has large consumer base for the mobile phones hence the production of mobile handsets is further slated to increase in value from USD 30 million in FY 21 to USD 126 million in FY 26 as stated by Invest in India, the National Investment Promotion and Facilitation Agency of the Government of India.
• China is a global leader in automotive production, the growing investments and expansions in the sector in developing the next generation vehicles are contributing to the market growth. In August 2021, Honda motor announced plans to ramp up its capacity to build electric cars and other new-energy vehicles in China. Honda will invest around 3 billion yuan through a joint venture to expand an existing factory in Guangzhou.
• Thus, owing to the above-mentioned factors, the revenue share from Asia-Pacific is anticipated to grow at a faster rate than the other geographical regions during the forecast period.

Competitive Landscape

The Global DSP Market is moderately competitive and consists of several major players such as Texas Instruments Inc., Intel Corporation, Analog Devices Inc., Infineon Technologies AG, NXP Semiconductors NV, etc. In terms of market share, few of the major players currently dominate the market. However, with innovations and technological advancements, many of the companies are increasing their market presence by securing new contracts and by tapping new markets. Some of the recent developments in the market are:

• In January 2022, Infineon Technologies AG introduced new AURIX TC4x family of 28 nm microcontrollers (MCUs) for next-generation eMobility, ADAS, automotive E/E architectures and affordable AI applications. The new AURIX TC4x family features the next-generation TriCore 1.8, along with scalable performance improvements from the AURIX accelerator suite. This comprises the novel parallel processing unit (PPU), a SIMD vector digital signal processor which addresses the demands of several AI topologies.
• In December 2021, Analog Devices, Inc. introduced a breakthrough RadioVerse System-on-Chip (SoC) series, ADRV9040. It offers eight transmit and receive channels of 400MHz bandwidth and incorporates advanced digital signal processing functions, such as carrier digital down-converters (CDDC), carrier digital up-converters (CDUC), digital pre-distortion (DPD), and crest factor reduction (CFR). This expanded signal processing is expected to eliminate the requirement of a field-programmable gate array (FPGA), thus reducing thermal footprint, and total system weight, size, power, and cost.

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