Miniaturization, Digitalization Key to Semiconductor Industry Performance, According to a New Report by Global Industry Analysts

San Jose, CA (PRWEB) September 8, 2008

Demand for semiconductor products is shaped by continuously evolving technologies and industry needs. Ability to develop highly sophisticated products in a timely manner at reduced costs will drive growth. Increasing demand from existing and niche market applications in areas such as consumer electronics, high-speed networking and wireless communications infrastructure will further stimulate the semiconductor device market. Growth of demand in end markets fluctuate extensively based on various factors, such as spending patterns of automotive and/or telecommunications equipment providers, introduction of new consumer products entailing high semiconductor content, favorable economic outlook and encouraging industry standards.


In recent years, the semiconductor industry has witnessed strong trend towards offshore manufacturing. This significant evolutionary phase has the potential to change industry’s future course with over two-thirds of the most up-to-date chip manufacturing facilities being constructed in Asia. Cheaper capital needs supported by government incentives transitioned the semiconductor industry from Americas to Europe, Japan and now Taiwan and Korea. China is likely to be the future semiconductor powerhouse, following the trend towards substantial inducement packages that led the roar in Taiwan, Japan and Korea.


Computers represent the largest end-user market for semiconductors. Microcomputers, the largest user of semiconductors generates around half of the income for this industry. MOS Micro Devices including microprocessors, microcontrollers and digital signal processors represent the largest market for semiconductors. Proliferation of wired and wireless information appliances and Internet infrastructure products has a positive impact on the global microprocessor market.


The semiconductor industry is highly cyclical. The boom-and-bust cycle of the semiconductor industry is characterized by the uncertainty over the development of end-markets, inventory levels, semiconductor pricing, general economic outlook and the amount of semiconductor content in end product. Increasing device sophistication and scaling semiconductor applications make the cycles more product-specific. As a result, demand for semiconductors in different end-user markets may experience dissimilar cycles. A primary factor intensifying the industry cycle, and resulting in surplus inventory is the rapid pace of technological obsolescence.


Capacity utilization is a key factor directing the semiconductor market pricing. Low levels of capacity utilization cause surplus semiconductor capacity thus weakening the price and demand for semiconductors. Semiconductor devices usually carry high fixed costs and therefore cannot adjust the average selling prices in line with market declines. Furthermore, increased competition in core products market could lead to price erosion and reduce the overall revenue growth. Besides, semiconductor manufacturing is overwhelmed by issues related to air and water pollution, ozone layer protection, global warming and increasing wastes.


The report titled ‚ÄúSemiconductors: A Global Outlook‚ÄĚ, published by Global Industry Analysts Inc, provides a collection of statistical anecdotes, market briefs, and concise summaries of research findings. Dotted with brief discussions on key product/technology areas, the report offers a firm grasp on the industry‚Äôs changing dynamics. The discussions on the global, and the US markets are richly illustrated with 11 data rich tables, in addition to short commentaries on the industry‚Äôs outlook. Regional markets discussed include the US, Canada, Japan, Germany, and China, among others. Also included is an indexed, easy-to-refer, fact-finder directory listing the addresses, and contact details of 846 companies worldwide.

About The Author

Ibrar Ayyub

I am an experienced technical writer holding a Master's degree in computer science from BZU Multan, Pakistan University. With a background spanning various industries, particularly in home automation and engineering, I have honed my skills in crafting clear and concise content. Proficient in leveraging infographics and diagrams, I strive to simplify complex concepts for readers. My strength lies in thorough research and presenting information in a structured and logical format.

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