Audio IC Market

Market Overview

The global audio IC market size had a revenue share of USD 29,883 million in 2021, which is anticipated to increase to USD 52,900 million with a CAGR of 7.4% during the forecast period. 

Audio IC (integrated circuit) is an electrical component that functions as an audio processor, MEMS (microelectromechanical systems), microphone, audio amplifier, and subsystems. Audio amplifiers, audio converters, etc., are the different types of audio ICs. Audio amplifiers are utilized in various sound systems, including home audio systems, musical instrument systems, loudspeakers, and sound reinforcement. The objective of an amplifier is to enhance the system's performance by amplifying signal vibrations to their utmost extent without changing frequency or wavelength.

A digital sound processor (DSP) is a specialized microprocessor chip widely used in audio signal processing, telecommunications, digital image processing, and radar, sonar, and speech recognition systems. It is also used in consumer electronic devices such as mobile phones, disc drives, and high-definition television (HDTV) products.

Over the forecast period, the global audio IC market is projected to expand rapidly. The expansion of the audio IC market is driven by factors such as the rising usage of consumer electronics devices and the development of new energy-efficient audio devices with improved user experience. In addition, the increasing penetration of wireless and intelligent infrastructure and the spike in demand for HiFi audio at commercial events will fuel market expansion throughout the projection period. However, the increased demand for Audio SoC and the technical flaws and challenges connected with audio device integration are significant limitations for the global market.

Market Dynamics

Increased Adoption of Consumer Electronics Devices to Favor Market Growth

There is an increase in demand for power-efficient and innovative electronic items, such as high-quality speakers with audio ICs to enhance sound quality. In 2019, according to the American trade publication Music Trades, the sales volume value of instrument amplifiers was USD 153.93 million. In addition, the consumer electronics market in developing nations is expanding quickly as disposable incomes rise. This has led to the growth of global audio system suppliers who present unique goods in these nations. HARMAN, a division of Samsung Electronics, released Infinity by HARMAN, a new lifestyle audio brand, in India in August 2019. Consequently, much higher spending is anticipated to stimulate the market throughout the projection period.

In addition, the demand for electronic components in Internet of Things (IoT) devices is increasing globally. According to studies conducted by the United Nations Conference on Trade and Development (UNCTAD), the demand for electronic components used in Internet of Things devices increased the value of international trade in information and communications technology (ICT) goods to USD 2.1 trillion in 2017. Consequently, the rise in demand for consumer electronics is one of the main reasons driving the global audio IC market.

Advancement of New Energy-Efficient Audio Devices to Enhance Use Experience to Aid Growth

A massive increase in the music and film industries has led to the development of a technologically advanced audio system. In this industry, wireless technology reliability and reductions in connectivity and cabling are noted. In addition, there is an increase in demand for smaller, lighter, and more powerful components to reduce the shipping, storage, and installation expenses associated with large audio systems. In November 2020, for instance, Noveto Systems, an Israel-based technology company, invented a futuristic audio technology that enables wireless music listening without headphones. The technology used a speaker's 3D sensor module to track and pinpoint the ear's position to transmit audio via ultrasonic waves. These developments are anticipated to expand the global audio IC market significantly.

Market Restraining Factors

Technological Issues Concerning Integration in Audio Devices to Hinder Market Growth

Numerous technical difficulties are experienced while integrating audio devices, resulting in the release of no or distorted sounds and buzzing sounds from speakers, a lack of treble or bass in music, and excessive audio volume. Typically, these issues are brought on by a faulty or inappropriate audio IC or improperly connected wires. Additionally, audio systems might be difficult to comprehend due to their settings and cables. Such difficulties in audio systems might result in negative user experiences, hindering the expansion of the audio IC market.

Key Market Opportunities

Development of VR Technology to Boost Market Opportunities

The technology of augmented reality (AR) enables real-time interaction, the integration of real and virtual worlds, and precise 3D registration of virtual and real items. Virtual reality (VR) involves using computer technology to replicate an environment. The global market is driven by the development and proliferation of AR/VR devices and the necessity for audio ICs to offer ideal sound quality in an AR/VR headset for an immersive experience. For example, Class-D amplifiers are increasingly employed in AR/VR headsets to provide surround sound. Moreover, there is an increase in AR/VR technology investments, which presents an attractive potential for adopting audio ICs. According to Digi-AR/VR Capital's Analytics Platform, around USD 4.1 billion was spent globally on AR/VR technologies in 2019.

Regional Analysis

The regional segmentation of the global audio IC market includes North America, Europe, Asia-Pacific, and LAMEA.

North America And Asia-Pacific Will Dominate The Regional Market

Asia-Pacific will command the regional market with the highest revenue share growing with a CAGR of 8.3% during the forecast period. Countries including China, Japan, India, and South Korea are experiencing significant expansion in the market for speaker amplifiers. This is due to an increase in the adoption of consumer electronics devices, an increase in the disposable income of customers in these nations, and considerable technological innovation.

The Asia-Pacific audio IC market is expanding due to rising investments in automotive and consumer electronics. In addition, providers of vehicle audio speakers and car amplifiers in Asia-Pacific are continuously increasing their production facilities, contributing to the market's growth. In 2018, Harman Kardon, for instance, finished the Suzhou plant II building. It is a 14,000-square-meter building with multiple production equipment that will enable Harman to double its current production capacity. In addition, the region is headquartered by Samsung, Toshiba, Panasonic, and LG Electronics. This component dramatically increases audio IC demand.

North America will have the second-largest market share of USD 16,736 million with a CAGR of 6.5% during the forecast period. In the U.S. and Canada, audio IC expenditures continue to increase rapidly. North America held the most significant market share for audio ICs, as this region supports substantial investments in consumer electronics and is home to market leaders. High levels of competition in the U.S. audio IC market have prompted market-related company activities like research and development, mergers and acquisitions, and product launches. This factor has primarily fueled the audio IC industry in North America. In September 2020, for instance, Technics, a sub-brand of Panasonic Consumer Electronics Company, a branch of Panasonic Corporation of North America, introduced the Reference Class integrated amplifier SU-R1000.

Segmental Analysis

The global audio IC market is segmented based on type, application, and region.

On the Basis of Type

Based on type, the global market is fragmented into audio amplifiers, DSP, CODEC, and MEMS microphones.

Audio CODEC is anticipated to generate the largest revenue share in the market with a CAGR of 9% during the forecast period. Audio CODEC (coder/decoder) is a sort of audio IC that converts analog audio to digital signals and digital signals back to analog. These are audio data converters with both an ADC and a DAC (DAC). Audio CODEC transmit digital data via buses, such as linear pulse-code modulation (linear PCM), inter-IC sound (I2S), AC-Link, inter-integrated circuit (I2C), and serial peripheral interface (SPI). Audio CODEC is utilized in numerous industries, including entertainment, gaming, consumer electronics, and automobiles.

Due to an increase in demand for energy-efficient audio systems, it is anticipated that the audio CODEC market will develop throughout the forecast period. In addition, the growing popularity of smartphones drives the expansion of the audio IC market. Moreover, it is anticipated that the rise of IoT-enabled gadgets incorporating artificial intelligence would alter the audio CODEC market perspective.

Audio DSP is expected to hold the second-largest market share. A digital sound processor (DSP) is a microprocessor chip with specialized functions. DSPs are manufactured on metal oxide semiconductor (MOS) integrated circuit chips. Widespread applications include audio signal processing, telecommunications, digital image processing, radar, sonar, voice recognition systems, and consumer electronic devices such as mobile phones, disc drives, and high-definition television (HDTV) products.

Increased use of DSP chips in consumer electronics and increased usage of wireless connection and infrastructure are significant growth drivers for the global industry. However, the usage of audio DSP in devices incurs more cost and raises product prices, which is anticipated to provide significant challenges to the audio IC market's expansion. In addition, an increase in the usage of audio DSP in autos, an increase in the need for audio DSP in printers, and an increase in the use of IP cameras in video surveillance are anticipated to present attractive potential possibilities for the audio DSP market.

On the Basis of Application

Based on application, the global market is fragmented into computers & tablets, phones, headphones, home entertainment systems, automotive, commercial, smart home & IoT devices, and wearables.

Phones are expected to hold the largest share in revenue with a CAGR of 7.7% during the forecast period. In cell phones, output sound is pre-amplified; hence, it can be delivered straight to the audio IC input via a stereo connection. Using headphones or speakers, audio ICs boost the audio quality of mobile devices, hence improving listening clarity. Additionally, audio ICs can amplify crucial sounds, such as conversations, without excessively amplifying distracting sounds. Increased smartphone penetration and an increase in the amount of content utilized on smartphones fuel the growth of the audio IC market. In addition, the increased deployment of enhanced audio ICs for mobile phones drives the expansion of this market segment. Micro speakers augmented by a smart-enhanced audio amplifier enable loudspeakers to provide maximum loudness while preventing damage.

Smart homes & IoT devices are expected to hold the second-largest share in the market. A smart home or home automation consists of internet-connected gadgets installed in the residence to permit remote control and oversight of systems and appliances. It comprises doorbells, intercom systems, and intelligent speakers. Moreover, the Internet of Things (IoT) extends internet connectivity beyond ordinary devices such as PCs, laptops, smartphones, and tablets to various traditionally non-internet-enabled physical gadgets and commonplace objects. 

Increased use of smart speakers in smart homes due to their increased capabilities and usability is a significant factor driving the audio IC industry. In smart homes, smart speakers control gadgets using the user's voice, making daily tasks easier. In addition, the introduction of audio ICs by market participants to integrate audio services into their designs for smart homes supports the expansion of this industry.

Recent Developments

• In 2022, Analog Devices, Inc. announced its collaboration with Synopsys to provide model libraries for DC/DC ICs and micro module regulators.
• In 2022, Analog Devices, Inc introduced a new portfolio of new-generation 16-to-24 bit, ultra-high precision successive approximation register (SAR) analog-to-digital converters (ADC) that simplify the often complex process of designing of ADCs into instrumentation, industrial and healthcare applications. 
• In 2022, NXP Semiconductors announced the IW612, the industry's first secure tri-radio device to support the Wi-Fi 6, Bluetooth 5.2, and 802.15.4 protocols.