KSA System on Chip Market Report: Size, Share, Growth Drivers, Trends, Opportunities & Forecast 2025-2030

Saudi Arabia System on Chip Market valued at USD 430 million, driven by 5G adoption, smart cities, and digital transformation, with growth in consumer electronics and automotive sectors.

The Saudi Arabia System on Chip Market is valued at USD 430 million, based on a five-year historical analysis and the proportional share of the broader semiconductor market. This growth is primarily driven by the increasing demand for advanced electronics in consumer devices, automotive applications, and industrial automation. The rise in digital transformation initiatives, rapid 5G adoption, and the push for smart technologies - especially in major projects like NEOM and the expansion of smart cities - have further fueled the market's expansion.

Key cities such as Riyadh, Jeddah, and Dammam dominate the market due to their robust infrastructure, technological advancements, and the presence of major electronics manufacturers. Riyadh, as the capital, serves as a hub for innovation and investment, while Jeddah and Dammam benefit from their strategic locations and access to international markets. These cities are also central to government-backed initiatives and public-private partnerships that foster semiconductor and SoC ecosystem development.

The National Industrial Development and Logistics Program (NIDLP), launched by the Ministry of Energy, Industry and Mineral Resources in 2019, continues to be a cornerstone for enhancing the local semiconductor industry. The NIDLP includes targeted investments of USD 1 billion to support research and development, promote local manufacturing, and attract foreign investments, thereby strengthening the domestic System on Chip ecosystem. The program mandates compliance with localization targets, R&D collaboration with Saudi universities, and incentives for establishing local design and fabrication facilities.

Saudi Arabia System on Chip Market Segmentation

By Type:

The market is segmented into various types of System on Chips (SoCs), including Digital SoCs, Analog SoCs, Mixed-signal SoCs, RF SoCs, Power Management SoCs, Application-Specific SoCs (ASICs), AI/ML SoCs, and Others. Among these, Digital SoCs are leading the market due to their extensive use in consumer electronics and mobile devices, driven by the increasing demand for high-performance computing, connectivity, and integration of AI and IoT functionalities in smart devices.

By End-User:

The end-user segmentation includes Consumer Electronics, Automotive, Telecommunications, Industrial Automation, Healthcare Devices, Government & Defense, Energy & Utilities, and Others. The

Consumer Electronics segment is the most significant contributor, driven by the rising adoption of smart devices, increased penetration of 5G smartphones, and the demand for enhanced user experiences in smartphones, tablets, and wearables. The automotive segment is also expanding rapidly due to the integration of advanced driver-assistance systems (ADAS) and connected vehicle technologies.

Saudi Arabia System on Chip Market Competitive Landscape

The Saudi Arabia System on Chip Market is characterized by a dynamic mix of regional and international players. Leading participants such as STMicroelectronics, Qualcomm Technologies, Inc., Texas Instruments Incorporated, NXP Semiconductors N.V., Broadcom Inc., MediaTek Inc., Infineon Technologies AG, Analog Devices, Inc., Renesas Electronics Corporation, onsemi (ON Semiconductor Corporation), Cypress Semiconductor Corporation (now part of Infineon Technologies AG), Microchip Technology Inc., AMD (Advanced Micro Devices, Inc.), ARM Holdings plc, Intel Corporation, Groq Inc., Aramco Digital, Saudi Technology Development and Investment Company (TAQNIA) contribute to innovation, geographic expansion, and service delivery in this space.

Saudi Arabia System on Chip Market Industry Analysis

Growth Drivers

Increasing Demand for IoT Devices:

The Internet of Things (IoT) market in Saudi Arabia is projected to reach $8 billion by the future, driven by the increasing adoption of smart home technologies and industrial automation. The government’s Vision 2030 initiative emphasizes digital transformation, which is expected to boost the demand for System on Chip (SoC) solutions. With over 60 million connected devices anticipated by the future, the need for efficient SoCs will significantly rise, enhancing market growth.

Growth in Automotive Electronics:

The automotive electronics market in Saudi Arabia is expected to grow to $3.5 billion by the future, fueled by the rising demand for advanced driver-assistance systems (ADAS) and electric vehicles (EVs). The integration of SoCs in vehicles enhances functionalities such as navigation, safety, and infotainment. As the country aims to increase EV adoption to 35% of total vehicle sales by the future, the demand for sophisticated SoCs will continue to expand, driving market growth.

Expansion of Telecommunications Infrastructure:

Saudi Arabia's telecommunications sector is projected to invest $25 billion in infrastructure by the future, focusing on enhancing connectivity and expanding 5G networks. This investment will create a robust environment for SoC applications, particularly in mobile devices and smart city projects. The anticipated increase in mobile data traffic, expected to reach 12 exabytes per month by the future, will further drive the demand for efficient SoCs, supporting market growth.

Market Challenges

High Initial Development Costs:

The development of advanced SoCs requires significant capital investment, often exceeding $1.2 billion for research and development. This high barrier to entry can deter local startups and limit competition in the market. Additionally, the lengthy development cycles, which can take up to four years, further exacerbate the financial strain on companies, hindering innovation and market entry for new players.

Limited Local Manufacturing Capabilities:

Saudi Arabia currently has limited semiconductor manufacturing facilities, with only one major fab operational, producing around 12,000 wafers per month. This lack of local production capacity leads to reliance on imports, which can be disrupted by global supply chain issues. The country’s ambition to establish a more self-sufficient semiconductor industry faces challenges, including the need for skilled labor and advanced technology transfer.

Saudi Arabia System on Chip Market Future Outlook

The Saudi Arabia System on Chip market is poised for significant advancements, driven by the increasing integration of AI and machine learning in various applications. As the government continues to invest in smart city initiatives and 5G infrastructure, the demand for innovative SoC solutions will rise. Furthermore, collaborations with global technology firms are expected to enhance local capabilities, fostering a more competitive landscape. This dynamic environment will likely lead to the emergence of new players and innovative products in the future.

Market Opportunities

Growth in AI and Machine Learning Applications:

The AI market in Saudi Arabia is projected to reach $150 billion by the future, creating substantial opportunities for SoC developers. The integration of AI capabilities into SoCs will enhance performance in various sectors, including healthcare and finance, driving demand for advanced semiconductor solutions.

Increasing Adoption of 5G Technology:

With 5G technology expected to cover 95% of the population by the future, there is a significant opportunity for SoC manufacturers to develop specialized chips that support high-speed connectivity. This adoption will facilitate advancements in IoT, smart cities, and autonomous vehicles, further expanding the market potential for SoCs.