Application-Specific Integrated Circuit in Saudi Arabia Trends and Forecast
The future of the application-specific integrated circuit market in Saudi Arabia looks promising with opportunities in the telecommunication, industrial, automotive, and consumer electronic markets. The global application-specific integrated circuit market is expected to reach an estimated $21.8 billion by 2031 with a CAGR of 5.7% from 2025 to 2031. The application-specific integrated circuit market in Saudi Arabia is also forecasted to witness strong growth over the forecast period. The major drivers for this market are the rising need for specialized and high-capacity chips and the widespread integration of artificial intelligence and machine learning among industries.
• Lucintel forecasts that, within the product type category, semi-custom will remain the largest segment over the forecast period due to its lower complexity and broad range of applications.
• Within the application category, consumer electronics is expected to witness the highest growth due to the increasing use of application-specific integrated circuits in various gadgets, such as smartphones, tablets, and laptops.
Emerging Trends in the Application-Specific Integrated Circuit Market in Saudi Arabia
Industry sources reveal that the ASIC market in Saudi Arabia is still in its infancy but is poised to grow due to advances in technology and the government’s attempts to diversify the economy away from oil. As Saudi Arabia works to build its tech sector, which includes telecommunications, automotive, AI, and industrial automation, there is an uptick in demand for bespoke semiconductor products. These developments signify the growing strategic importance of ASICs, in line with Saudi Arabia’s economic development Vision 2030 framework, which aims to innovate and support a sustainable knowledge-based economy.
• Expansion of Telecom and 5G Networks: The progression of 5G in Saudi Arabia remains a critical driver for ASIC demand within telecommunications, including base stations, smartphones, and other smart devices. Saudi telecom companies require higher levels of integration and functionality in their networks, and specialized semiconductors enhance system performance and lower operating expenses. These factors drive innovation in the telecom industry, enabling Saudi Arabia to spearhead the 5G revolution in the Middle East. This, in turn, increases the need for complex, custom-built 5G chips.
• Progress on Artificial Intelligence (AI) and Machine Learning: While Saudi Arabia deepens its focus on AI and machine learning, there is growing demand for proprietary AI application-specific integrated circuits (ASICs). Considering the vast amounts of information that need to be processed for autonomous driving, facial recognition, and prescriptive analytics, these chips are extremely important. Saudi Arabian companies are focusing on designing AI-specific proprietary chips to foster domestic innovation and reduce reliance on foreign technologies, thus supporting Saudi Arabia’s role as a regional hub for AI development.
• Increase in Electric Vehicles (EVs) Adoption and Self-Driving Cars: The growth of electric vehicles and self-driving technology adoption in Saudi Arabia has generated significant interest in tailored ASIC designs. These chips are imperative for power management, onboard control systems, sensor fusion, and assistive driving capabilities. Saudi Arabia is particularly focused on populating EV infrastructure and building self-driving vehicle systems. More sophisticated, effective, and affordable automotive ASICs are being demanded as the country seeks to establish a new market for these specialized semiconductor components.
• Smart City and IoT Developments: The application of IoT technology and the creation of smart cities in Saudi Arabia has increased the need for specialized ASICs. These chips are utilized for the control of smart home appliances, health systems, and city infrastructure. As Saudi Arabia’s Vision 2030 states, there is a shift from traditional metropolitan areas to interconnected smart cities such as Neom. This provides numerous opportunities for the integration of ASICs into traffic and environmental monitoring systems. The growth of the ASIC market is fueled by this trend, particularly in IoT, where low power consumption and compact form factors are essential.
• Government Investment in the Semiconductor Industry: As per its Vision 2030 plan, the Saudi government is allocating more resources towards the advancement of the semiconductor industry. Saudi Arabia intends to strengthen its local capabilities by placing a strong focus on domestic manufacturing and R&D of specialized chips or ASICs. With the help of government programs, tax breaks, subsidies, and research funds are being made available to the private sector, rapidly increasing investments in semiconductor design and fabrication. These policies are stimulating economic activity in the ASIC industry and enabling competition between domestic and foreign ASIC manufacturers.
The ASIC market in Saudi Arabia is poised for significant growth, driven by advancements in technology and the government’s efforts to diversify the economy away from oil dependence. Key sectors such as telecommunications, AI, electric vehicles, smart cities, and industrial automation are propelling the demand for specialized ASIC designs. With increased government investment in the semiconductor industry, Saudi Arabia is working towards fostering local innovation and reducing reliance on foreign technologies. These developments are closely aligned with the objectives of Vision 2030, positioning the Kingdom to become a self-sufficient, competitive player in the global semiconductor market.
Recent Developments in the Application-Specific Integrated Circuit Market in Saudi Arabia
This Saudi Arabian ASIC market is developing rapidly as new technologies become available and the government strives to diversify the economy. The development of the telecom, AI, smart city, and electric vehicle industries is fueling the demand for custom-made ASIC designs. Additionally, it aligns with the Vision 2030 objectives of improving the domestic technological infrastructure and reducing dependence on foreign tech, which will create a more self-sufficient and competitive semiconductor industry.
• Growth of Telecom and 5G Infrastructure: Saudi Arabia reports broad adoption of mobile technology and expansion of networks, which has increased the demand for Application-Specific Integrated Circuits, or ASICs. Mobile telecom operators in Saudi Arabia are actively working to increase the coverage and quality of mobile communication services, which increases the demand for 5G infrastructure. For Saudi Arabia, this development is a victory as it becomes one of the leaders in 5G deployment in the region, as well as ensuring that mobile telecom operators’ infrastructure is built with the latest semiconductive materials.
• Progress of AI and Machine Learning: Saudi Arabia has a fast-growing demand for these ASICs and the market will continue expanding for years to come. The government and the AI market encourage private investment for R&D in AI, which requires semiconductor components. The unique architecture of these ASICs will enable the utilization of developed AI models in medicine, self-driving cars, and security systems. With AI being one of the major initiatives of Vision 2030, Saudi Arabia aims to increase local fabrication of AI-specific chips, thus increasing local dependency and encouraging innovations in the tech industry.
• Investments in Electric Vehicles and Autonomous Driving Technologies: Saudi Arabia is focusing more on the innovation of electric vehicles and autonomous driving technology, which increases the demand for ASICs in the automotive industry. Specialized chips for the vehicle’s Power Management Integrated Circuits, Vehicle Control Unit, and Sensor Data Processing Unit are essential in autonomous vehicles. With the government pushing for EVs and autonomous technologies, the localized automotive ASIC market is expected to grow, creating new opportunities for onshore semiconductor firms.
• ASIC for Smart City and IoT Technologies: Particularly under the Vision 2030 initiative, the creation of smart cities is increasing the demand for IoT and smart infrastructure-driven ASICs. The chips are crucial to the operation of smart homes and cities due to the increasing number of connected devices. As Saudi Arabia invests in smart city projects such as Neom, there is a growing need for efficient, low-power ASICs to support large-scale IoT networks. This phenomenon is transforming the semiconductor industry and increasing the creativity of chip design and integration.
• Initiatives to Support Semiconductors Abroad with Government Funding: To aid in achieving its Vision 2030 goals, Saudi Arabia has put in place programs designed to increase local semiconductor production. As a result, the government offers rewards for research and development expenditures, finances local semiconductor businesses, and establishes joint ventures with foreign technology firms. These policies are improving the domestic environment for the development of the semiconductor industry, which in turn fosters greater innovation and efficiency. The combination of these policies is allowing the country to keep up with the increasing needs of various industries for bespoke semiconductors.
The recent changes in the Saudi Arabian market for application-specific integrated circuit (ASIC) semiconductors reflect Saudi Arabia’s efforts toward new technological changes, increased self-reliance, and effective participation in the world economy. Echoing these comments, it can be stated that, with the support of these emerging government policies, the telecom, AI, automotive, and IoT industries are proactively energizing the demand for specific application ASICs. These changes are intended to prepare the infrastructure for the development of advanced semiconductor technologies to meet internal requirements and make the Kingdom of Saudi Arabia a dominant player in the global market for ASIC semiconductors.
Strategic Growth Opportunities for Application-Specific Integrated Circuit Market in Saudi Arabia
The Saudi Arabian application-specific integrated circuit (ASIC) market is experiencing robust growth potential due to several technological innovations and developments in the Saudi Arabian Vision 2030 strategy. The telecommunications, AI, electric vehicles (EVs), smart cities, and industrial automation sectors are fueling the need for custom semiconductor products. Below are five key application areas presenting growth potential that are contributing to the rapid growth of Saudi Arabia’s ASIC market.
• Telecommunications and 5G Infrastructure: Saudi Arabia’s aggressive deployment of 5G technology represents a significant opportunity for the ASIC market due to the increasing need for network optimization and overall performance. Growth in base station capacity and connectivity investment by telecom operators is elevating the demand for specialized ASIC solutions. Using ASICs allows operators to optimize energy usage while significantly cutting down costs and improving the quality of signals transmitted. In addition, this advanced technology will fuel the tailoring of chips for Saudi Arabia, enabling the market to meet the distinct needs of the expanding 5G-enabled infrastructure.
• Artificial Intelligence (AI) and Machine Learning: Saudi Arabia’s technology agenda heavily relies on AI and machine learning, especially in autonomous vehicles, facial recognition, and predictive analytics. As businesses shift their focus onto high-performing, energy-efficient solutions for complex AI workloads, the demand for AI-specific ASICs is rising. Saudi companies are beginning to design proprietary chips to fuel innovation, which would help establish the country as a Middle Eastern leader in AI technology. This trend provides local ASIC providers, who supply the ever-growing AI industry, with great prospects for unbounded growth.
• Electric Vehicles (EVs) and Autonomous Driving: The adoption of electric vehicles (EVs) and self-driving cars in Saudi Arabia presents a unique opportunity to assist the ASIC market. The implementation of EVs needs to be supplemented with high-performance chips suitable for power management, vehicle systems, and throttle data. As the government shifts its focus to building infrastructure for advanced EVs and self-driving technologies, Saudi Arabia will need a myriad of low-cost and high-performance automotive ASICs. This will open up new markets for local semiconductor manufacturers, further expanding the country’s semiconductor capabilities.
• Smart Cities and Internet of Things (IoT): Integrated IoT solutions are key to efficient urban management and the development of smart cities, as mentioned in Saudi Arabia’s Vision 2030. The exhaustive plans brought forth in this initiative will greatly increase the premier demand for ASIC-supported IoT infrastructure, smart homes, healthcare systems, and urban infrastructure. Smart cities like Neom will drive the demand for customized ASICs, ensuring low power consumption and high performance in tightly integrated systems. Expanding markets present substantial growth opportunities for the ASIC industry, particularly in providing large-scope, energy-efficient IoT applications.
• Industrial Automation and Robotics: To modernize the economy, Saudi Arabia is investing in industrial automation and robotics to improve the overall productivity of its manufacturing base. The use of ASICs facilitates the performance of robotic systems, industrial control units, and control automation processes. There will be an increasing need for custom chips with greater levels of integration and functionality as industries become more automated. The Kingdom is looking to cultivate more industrial self-sufficiency as part of its Vision 2030, which presents a bonanza for the market that aims to implement specialized ASICs for automated systems.
Saudi Arabia’s ASIC market has significant strategic growth possibilities, which align with the country’s Vision 2030 goals. The strong demand in telecommunications, AI, EVs, smart cities, and industrial automation is steadily increasing the need for customized ASIC solutions. With growth in these sectors, the expansion of the local ASIC market will occur, presenting immense opportunities for private sector investment, innovation, and economic diversification. These efforts also contribute to the desired goal of making Saudi Arabia a leading country in the global semiconductor industry.
Application-Specific Integrated Circuit Market in Saudi Arabia Driver and Challenges
The market for application-specific integrated circuits (ASIC) in Saudi Arabia is influenced by several drivers and constraints, such as technological, economic, environmental, and geopolitical factors. The realization of the Vision 2030 goal is already prompting a surge in demand from strategically defined industries such as telecommunications, AI, electric vehicles, and smart cities. On the other hand, some issues, such as insufficient capital allocation, lack of skilled labor, and global competition, are affecting the market. Below are the major factors influencing the ASIC market in Saudi Arabia.
The factors responsible for driving the application-specific integrated circuits market in Saudi Arabia include:
• Growth of AI and 5G Technological Developments: The main contributor to the growth of the ASIC market lies in the development of 5G networks and AI, which have been evolving at unprecedented rates. While many countries work on the development of 5G infrastructure and related AI applications, there is an increasing need for specialized chips that can maximize performance and integrate new technologies. Specifically, the demand for telecommunications, AI, and machine learning ASICs that are high-performing and low-power-consuming is anticipated to rise significantly. These emerging industries present local semiconductor fabricators with immense design and production opportunities, which require vast amounts of resources to be fully capitalized on.
• Vision 2030 and Saudi Arabia Government Programs: For Saudi Arabia’s Vision 2030 plan, the government spending program is an important pillar. The government’s initiatives align with the Vision 2030 plan as it seeks to broaden the economy beyond oil revenue dependency. This is going to be a key driver for the ASIC market. Government programs that focus on strengthening the domestic semiconductor industry, such as investing in R&D and subsidizing manufacturing activities, are spurring the growth of the ASIC market. The increasing need for self-reliance in key technologies, such as semiconductors, is creating favorable conditions for foreign investment in ASIC firms.
• Electric Vehicles (EVs) and Self-Driving Cars: A global transition to electric vehicles and self-driving technologies is another reason for the increase of ASICs in Saudi Arabia. The custom chips required for EVs’ power management systems, control systems, and sensor fusion need to be bespoke, as the government invests in EV infrastructure and promotes autonomous driving technologies. Saudi Arabia offers local ASIC manufacturers a fantastic opportunity to serve the automotive sector with powerful chips tailored for devices in EVs and self-driving cars. Saudi Arabia is starting to increase investments to strengthen infrastructure for smart cities.
• Development of Smart Cities: Along with the increase in the use of IoT in smart cities, this is yet another driving factor that increases the demand for ASICs in the country. The thousands of interconnected urban centers, such as Neom, need a wide range of IoT devices, and all require increasingly sophisticated ASICs. Saudi Arabia’s smart city initiatives bring the government the need for a broad range of low-power, custom-designed ASICs for IoT, which presents a significant opportunity for local chip designers and manufacturers.
• Developing Internally-Embedded Manufacturing Capabilities: Saudi Arabia is focusing on developing its semiconductor manufacturing capabilities, which is growing the local ASIC market. With further investments into domestic chip fabrication and assembly, the country is increasing self-reliance in high-quality semiconductor manufacturing. The domestic fabrication of ASICs not only fulfills the needs of the country’s industries but also creates new avenues for foreign exchange, augmenting the national economy and the semiconductor industry.
Challenges in the application-specific integrated circuits market in Saudi Arabia are:
• Severe Restricted Access to Funding: One of the most prominent issues blocking the development of the Saudi ASIC market is the severely restricted access to funding. The highly capital-intensive nature of constructing semiconductor fabrication plants and R&D centers strains many businesses. The sophisticated process of semiconductor fabrication requires investment in modern infrastructure, advanced equipment, and qualified labor. This is a significant burden for potential new entrants and may inhibit the establishment of a robust indigenous ASIC industry.
• Talent Shortages in Semiconductor Design: Another major issue is the lack of skilled professionals in the field of semiconductor design and fabrication. Designing proprietary ASICs requires knowledge of chip design, testing, and integration. While the government has been spending on educational and training programs, there is still a shortage of talent pipelines in heterogeneous advanced ASIC skills. The industry will struggle to scale rapidly without a skilled workforce.
• International Competition and Market Dynamics: A threat to the Saudi ASIC market comes from international competition, particularly from the United States, Taiwan, and South Korea, which have established semiconductor manufacturers. These countries have decades of experience in semiconductor production and design, giving them a competitive advantage. To compete globally, Saudi companies will need to invest in research and development to ensure their products meet the standards required for the global market.
Unlike other markets, the ASIC market in Saudi Arabia has its own set of challenges. These obstacles present interesting problems alongside important opportunities. Government interest, spending, and advances in technology, together with increased demand from strategic sectors such as EVs, AI, and smart cities, can greatly enhance the market’s prospects. However, the industry continues to face several challenges, including a significant lack of investment capital, insufficient qualified personnel, and intense foreign competition. If managed properly, these issues can be addressed, and Saudi Arabia’s market can achieve long-term success. By implementing the right policies and investment initiatives, Saudi Arabia can position itself as a major competitor in the global semiconductor industry.
List of Application-Specific Integrated Circuit Market in Saudi Arabia Companies
Companies in the market compete on the basis of product quality offered. Major players in this market focus on expanding their manufacturing facilities, R&D investments, infrastructural development, and leverage integration opportunities across the value chain. Through these strategies, application-specific integrated circuit companies cater to increasing demand, ensure competitive effectiveness, develop innovative products & technologies, reduce production costs, and expand their customer base. Some of the application-specific integrated circuit companies profiled in this report include:
• Company 1
• Company 2
• Company 3
• Company 4
• Company 5
• Company 6
• Company 7
• Company 8
• Company 9
• Company 10
Application-Specific Integrated Circuit Market in Saudi Arabia by Segment
The study includes a forecast for the application-specific integrated circuit market in Saudi Arabia by product type and application.
Application-Specific Integrated Circuit Market in Saudi Arabia by Product Type [Analysis by Value from 2019 to 2031]:
• Full Custom ASIC
• Semi-Custom ASIC
• Programmable ASIC
Application-Specific Integrated Circuit Market in Saudi Arabia by Application [Analysis by Value from 2019 to 2031]:
• Telecommunication
• Industrial
• Automotive
• Consumer Electronics
• Others
Features of the Application-Specific Integrated Circuit Market in Saudi Arabia
Market Size Estimates: Application-specific integrated circuit in Saudi Arabia market size estimation in terms of value ($B).
Trend and Forecast Analysis: Market trends and forecasts by various segments.
Segmentation Analysis: Application-specific integrated circuit in Saudi Arabia market size by product type and application in terms of value ($B).
Growth Opportunities: Analysis of growth opportunities in different product type and application for the application-specific integrated circuit in Saudi Arabia.
Strategic Analysis: This includes M&A, new product development, and competitive landscape of the application-specific integrated circuit in Saudi Arabia.
Analysis of competitive intensity of the industry based on Porter’s Five Forces model.
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FAQ
Q1. What are the major drivers influencing the growth of the application-specific integrated circuit market in Saudi Arabia?
Answer: The major drivers for this market are the rising need for specialized and high-capacity chips and the widespread integration of artificial intelligence and machine learning among industries.
Q2. What are the major segments for application-specific integrated circuit market in Saudi Arabia?
Answer: The future of the application-specific integrated circuit market in Saudi Arabia looks promising with opportunities in the telecommunication, industrial, automotive, and consumer electronic markets.
Q3. Which application-specific integrated circuit market segment in Saudi Arabia will be the largest in future?
Answer: Lucintel forecasts that, within the product type category, semi-custom will remain the largest segment over the forecast period due to it’s lower complexity and broad range of applications.
Q4. Do we receive customization in this report?
Answer: Yes, Lucintel provides 10% customization without any additional cost.
This report answers following 10 key questions:
Q.1. What are some of the most promising, high-growth opportunities for the application-specific integrated circuit market in Saudi Arabia by product type (full custom ASIC, semi-custom ASIC, and programmable ASIC), and application (telecommunication, industrial, automotive, consumer electronics, and others)?
Q.2. Which segments will grow at a faster pace and why?
Q.3. What are the key factors affecting market dynamics? What are the key challenges and business risks in this market?
Q.4. What are the business risks and competitive threats in this market?
Q.5. What are the emerging trends in this market and the reasons behind them?
Q.6. What are some of the changing demands of customers in the market?
Q.7. What are the new developments in the market? Which companies are leading these developments?
Q.8. Who are the major players in this market? What strategic initiatives are key players pursuing for business growth?
Q.9. What are some of the competing products in this market and how big of a threat do they pose for loss of market share by material or product substitution?
Q.10. What M&A activity has occurred in the last 5 years and what has its impact been on the industry?
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