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 significant growth owing to the excessive usage of digital signal processor chips in consumer electronics. Several consumer electronics, such as mobile phones, have become a major requirement worldwide and have observed a considerable user surge. According to the BankMyCell, mobile phone users worldwide have increased significantly from 4.30 billion in 2016 to 7.10 billion in 2021.

Within the mobile phone industry, a major portion of customers uses smartphones. The number of smartphone 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, smartphone users are expected to increase to 7.33billion 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, due to its cost benefits, digital signal processing has grown as the leading technology for developing high-performance communication systems.

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. Through the rapid migration of digital signal processors from military applications to low-cost applications in portable devices such as laptops, smartphones, and CD players, power consumption and cost have become crucial parameters when selecting a digital signal processor.

Further, the effect of COVID-19 on the mobile devices market has been moderate. Moreover, the pandemic changed the perception of the current global supply chain in manufacturing, potentially leading to more localized value chains and further regionalization to minimize similar risks shortly.

The decline in consumer spending owing to the pandemic has led to a decline in 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.