Chip Resistor Market

Market Overview

The global chip resistor market was valued at USD 1.35 billion in 2023. It is estimated to reach USD 2.13 billion by 2032, growing at a CAGR of 5.25% during the forecast period (2024–2032). In recent years, there has been a surge in the production and consumption of consumer electronics, like smartphones, tablets, laptops, and wearable devices, which is a significant driver for the chip resistor market.

With a surging environmental concern and advancement in the automotive industry, there has been a paradigm shift towards electric vehicles (EVs) and advanced driver-assistance systems (ADAS), which has led to an increased demand for automotive electronics. This is estimated to create market expansion opportunities.

A chip resistor is a type of surface-mount device (SMD) resistor commonly used in electronic circuits. It is designed for automatic placement on printed circuit boards (PCBs) and is characterized by its small, rectangular shape. Chip resistors are made from a resistive film or ceramic and provide a specific resistance value essential for controlling current flow, dividing voltages, and signal conditioning in circuits.

These resistors are crucial in modern electronics due to their compact size, allowing for high-density circuit layouts. They are identified by their standardized sizes and resistance values, often marked in code. Chip resistors offer advantages such as reliability, precision, and the ability to operate in various environmental conditions, making them indispensable in consumer electronics, automotive, telecommunications, and industrial applications.

Highlights

• Thick chip resistor dominates the type segment
• Consumer electronics dominate the application segment
• Asia-Pacific contributed to the largest market share

Market Dynamics

Global Chip Resistor Market Drivers

Rising Demand for Consumer Electronics 

The rising demand for consumer electronics is a significant driver for the market. With the proliferation of tablets, smartphones, wearables, and smart home devices, the need for compact and efficient electronic components has surged. Chip resistors play a critical role in the functionality and miniaturization of these devices. Moreover, the expanding Internet of Things (IoT) ecosystem further amplifies the demand as more devices become interconnected and require robust electronic components.

The global consumer electronics market, expected to grow substantially, propels the market as manufacturers strive to meet high performance, reliability, and miniaturization demands in their products. Also, according to IDC, global smartphone shipments climbed by 7.8% year-over-year to reach 289.4 million devices in the first quarter of 2024. According to Counterpoint Research, it is predicted that there will be a small increase of 3% in worldwide smartphone shipments in 2024 compared to the previous year, resulting in a total of 1.2 billion mobile devices. This trend underscores the critical role of chip resistors in modern electronic innovations.

Global Chip Resistor Market Restraint

Price Volatility of Raw Materials

The chip resistor market faces significant challenges due to the price volatility of essential raw materials like nickel, palladium, and copper. These metals are crucial for manufacturing resistors, and their fluctuating prices directly impact production costs. For instance, palladium prices have seen substantial swings, reaching record highs due to supply shortages and increased demand from the automotive sector for catalytic converters. This volatility makes it difficult for manufacturers to maintain stable pricing and profit margins, leading to increased uncertainty in the market. Moreover, geopolitical tensions, trade policies, and fluctuating demand exacerbate price instability. As a result, manufacturers must adopt long-term supply agreements and diversified sourcing strategies to mitigate these risks. However, the persistent unpredictability of raw material costs remains a significant restraint, potentially hindering the growth and profitability of the market.

Global Chip Resistor Market Opportunities

Growing Demand in Automotive Electronics 

The expansion of automotive electronics creates significant growth opportunities for the chip resistor market. The rising adoption of electric vehicles (EVs) and advanced driver-assistance systems (ADAS) has increased the demand for electronic components, including chip resistors. These resistors are essential for automotive applications such as battery management systems, infotainment, safety features, and power control units.

Based on the latest projections from the IEA, the proportion of the global vehicle market allocated to electric cars has experienced a significant surge, rising from around 4.0% in 2020 to 14% in 2022 and 18% in 2023, reflecting the rising demand for chip resistors. Moreover, ADAS technologies, which enhance vehicle safety and functionality, rely heavily on advanced electronic components. The automotive industry's shift towards more electronic and digital solutions for efficiency, safety, and connectivity ensures a growing market for chip resistors, creating opportunities for the industry's overall growth.

Regional Analysis

Asia-Pacific Dominates the Global Market

Based on region, the global chip resistor market is bifurcated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa. 

Asia-Pacific is the most significant global market shareholder and is expected to expand substantially during the forecast period. This is driven by its robust manufacturing capabilities, high demand for consumer electronics, and significant automotive industry presence. This region is characterized by rapid technological advancements, substantial investments in electronics manufacturing, and a strong focus on innovation. Major economies like China and India play pivotal roles in propelling the chip resistor market growth within this region.

China's chip resistors market is the largest in the Asia-Pacific region. Its dominance is attributed to its vast electronics manufacturing sector, which includes consumer electronics, telecommunications, and automotive industries. The country's extensive electronics manufacturing infrastructure, coupled with government initiatives like "Made in China 2025," aims to boost technological self-sufficiency and innovation. Additionally, the burgeoning electric vehicle (EV) market, supported by government incentives and rising consumer adoption, further amplifies the need for advanced electronic components. As reported by Harvard Business Review, China is currently leading the EV industry, surpassing traditional automotive leaders like Germany and Japan. In 2022, China witnessed a remarkable 82% surge in electric vehicle sales, accounting for almost 60% of global electric vehicle purchases. Moreover, the International Energy Agency has reported that China possesses nearly 50% of the total number of electric vehicles in use worldwide. This is estimated to boost the chip resistor market growth in China.

India's chip resistor market is emerging as a significant contributor, driven by its expanding electronics manufacturing sector and increasing consumer demand for electronic gadgets. The Indian government's "Make in India" initiative aims to transform the nation into a global manufacturing hub, attracting substantial foreign investments in the electronics industry. India's smartphone market, one of the fastest-growing globally, fuels the demand for chip resistors, with shipments reaching over 34 million units in the first quarter of 2024. Moreover, government policies promoting electric mobility and infrastructure development are set to drive the demand for electronic components, including chip resistors. For instance, the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme provides incentives to boost EV adoption, thereby increasing the need for reliable and efficient electronic components. India's focus on boosting domestic manufacturing capabilities and technological advancements underscores its growing importance in the Asia-Pacific market.

Consequently, all these factors together are estimated to expedite the Asia-Pacific chip resistor market growth.

The North American chip resistor market is a significant segment within the global landscape, driven by technological advancements and the presence of leading electronics manufacturers. The region's emphasis on innovation and substantial investments in research and development fuels the demand for chip resistors across various applications such as consumer electronics, automotive, telecommunications, and industrial sectors.

The United States is a major contributor to the North American market. The U.S. is home to several leading technology companies and startups that are at the forefront of innovations in IoT, AI, and 5G technologies. This technological ecosystem requires reliable and efficient electronic components, including chip resistors. Similarly, the automotive sector's push towards electric vehicles and autonomous driving technologies further boosts the demand for chip resistors. MarketWatch states electric vehicle sales in the United States have grown significantly since 2020. In 2023, around 1.6 million electric vehicles (EVs) were sold in the United States, marking a 60% surge compared to the 1 million sold across the country in 2022. In 2022, the United States accounted for 9.7% of the total global registrations of new EVs.

The Canadian chip resistor market is also experiencing growth, albeit at a slightly different pace compared to the U.S. The Canadian market benefits from a strong focus on industrial automation, telecommunications, and renewable energy systems. Canada's push towards sustainable technologies and green energy solutions requires advanced electronic components for efficient power management and control, driving the demand for chip resistors. Moreover, the country's automotive industry, particularly in Ontario, increasingly integrates advanced electronics into vehicle systems, supporting market growth. With a supportive regulatory environment and growing investments in high-tech industries, Canada is emerging as a significant player in the North American market.

Thus, the factors above are estimated to boost the North American chip resistor market growth.

Segmental Analysis

The global chip resistor market is bifurcated into types and applications.

Based on type, the global market is segmented into thin and thick chip resistors. 

The thick chip resistor segment dominates the global market. A thick film chip resistor is a type of surface-mount resistor characterized by a resistive film applied to an insulating ceramic substrate. The resistive film is typically a mixture of metal oxides and glass, which is screen-printed onto the substrate and then fired at high temperatures to achieve the desired resistance. Thick film resistors are known for their durability, high resistance range, and cost-effectiveness, making them suitable for an extensive range of applications in consumer electronics, automotive, and industrial equipment. Their ability to operate at high temperatures and withstand environmental stress enhances their reliability in various electronic circuits, contributing to their widespread use in the chip resistor market.

Based on the application, the global market is bifurcated into industrial, consumer electronics, automotive and transportation, telecommunication, aerospace and defense, and others. 

The consumer electronics segment is estimated to own the highest market share. The consumer electronics segment is a significant driver of the market, encompassing products like smartphones, tablets, laptops, and wearable devices. These devices' continuous innovation and miniaturization necessitate high-performance, reliable chip resistors. The proliferation of smart home devices, gaming consoles, and 5G-enabled gadgets further boosts demand. As per Statista, the global consumer electronics market is projected to reach USD 1.21 trillion by 2028, with Asia-Pacific leading due to its robust manufacturing base. As consumers seek more advanced and compact electronic products, the need for efficient chip resistors grows, ensuring stable circuit performance and longevity of devices, thereby fueling market expansion.

Recent Developments

• June 2023- Stackpole currently provides surface-mount resistors with a precision of 0.01% and a temperature coefficient of 2ppm/°C. These resistors are available in various sizes ranging from 0402 to 2512, which correspond to dimensions of 1 x 0.5mm to 6.3 x 3.1mm.
• December 2023- KOA CORPORATION spearheaded the publication of IEC60115-8 Edition 3, an internationally recognized standard for surface mount chip resistors. KOA has undertaken this step to ensure the safety and security of its consumers by amending international standards, as stated in the previously published business introduction.

Analyst’s Perspective

According to our research analyst, chip resistors are indispensable in the electronics industry, underpinning the functionality and reliability of various electronic devices and systems. Chip resistors are vital to the functionality and advancement of modern electronics. With the ongoing miniaturization trends, technological innovation, and increased adoption across diverse sectors, the market for chip resistors is poised for substantial growth. Investing in sustainable practices and cutting-edge innovation will put companies in the driver's seat of the electronics industry, which is seeing rising demand and new prospects. With their potential to make major contributions to the development of the worldwide electronics industry, chip resistors have a bright future.