Tablet and cell-phone applications remain top drivers in the IC market, but industrial applications are gaining steam, too.
The worldwide semiconductor market is set to grow 7% in 2014 following 5% growth last year, according to industry researcher IC Insights, which released its McClean Report 2014 in January. Although the outlook calls for steady improvement across the market, IC Insights leaders note that such growth is still considered slow in an industry accustomed to double-digit gains.
“This year looks pretty good—not great, but better than last year,” IC Insights president Bill McClean said during a presentation of the report’s findings in Boston in late January. “Really good growth in this industry is double-digit. Anything else is just okay.”
A sluggish worldwide economy is largely to blame. McClean pointed to ongoing problems in the Eurozone in particular as keeping market conditions less than stellar. Positive economic indicators in the United States—including the Purchasing Manager’s Index (PMI), which slowed in January but remained above the 50-point threshold indicating growth—combined with growth in emerging markets will help keep conditions moving in the right direction, however.
“If the world economy cooperates, it should be a good year,” McClean said.
Top-growing markets for integrated circuits (IC), in particular, continue to be tablet microprocessor units (MPUs) and cell-phone app MPUs, followed closely by NAND flash and DRAM markets.
A separate industry report released in early February pointed to growing strength in industrial electronics markets. Researcher IHS said the worldwide market for industrial electronics semiconductors ended 2013 on a positive note, rising 11% to $33.7 billion. IHS says it expects that momentum to continue, predicting 34% growth to $45 billion worldwide over the next five years (see the figure).
“The market’s persuasive bounce-back is due to a strengthening global economy, coupled with higher purchasing confidence across all geographical regions,” said Robbie Galoso, principal analyst for industrial electronics at IHS. “While the field may not sound as sexy or attention-grabbing as some of the more popular markets around, like wireless or consumer, there is no underestimating the power or sheer breadth of its applications, ranging from home automation to the medical field, to energy, to aeronautics and military purposes, and much more.”
Growth in the U.S. housing market fueled expansion of industrial electronics during 2013. Lighting was a strong performer as well, as were security systems used in applications such as video surveillance and fire alarms. Military and civil aerospace and medical electronics helped drive growth, too.
“In [military and civil aerospace], a robust commercial avionics sector drove expansion that compensated for headwinds encountered in the military sphere because of the U.S. federal budget sequestration,” IHS said. “In [medical electronics], the diagnostic-therapy-patient monitor market continued to perform well.”
Other key segments driving industrial growth include energy generation and distribution and manufacturing-process automation, which saw stronger results from an increase in demand from both China and the United States.
The industrial market will have a considerable effect on the industry with 34% growth to $45 billion predicted worldwide over the next five years. (courtesy of IHS Technology)