Industrial Semiconductor Market to Grow 8% in 2008

Despite signs of an economic slowdown in the wake of the global “credit crunch”, the latest edition of Semicast’s “Industrial/Medical Semiconductor Service” suggests that revenues for semiconductors in industrial and medical applications will continue to grow in 2008, at around 8 percent.

Colin Barnden, Semicast’s principal analyst for semiconductor research and author of the study commented, “One of the defining characteristics of the industrial sector is that it does not exhibit the “boom-and-bust” cycle typical of the semiconductor industry as a whole. While in good times this means opportunities are often overlooked, during more uncertain times the sector represents a safe bet for steady and dependable revenues. Accordingly, many semiconductor vendors are now taking a much closer look at the opportunities”.

The market for semiconductors in industrial and medical applications is estimated to have been $20 billion in 2007, a rise from around $17 billion in 2005, or a jump in revenues of 20 percent in just two years. Demand is forecast to rise further, to over $33 billion in 2013, a CAGR approaching 9 percent, and to total $183 billion over the period 2007-2013. By any calculation, that is not an opportunity to dismiss.

In 2007, analog ICs and discretes represented the two largest product categories, followed by MCU/MPU/DSP. Over the medium term, highest revenue growth is forecast for analog ICs, reflecting the “real world” attributes of measurement, control and position that are so common in industrial applications. Next highest growth is forecast for the MCU/MPU/DSP category, as system complexities continue to rise and with it a corresponding need for more complex control.

A summary of the opportunities in each of the main product categories is as follows:

Analog ICs: demand is forecast to continue to be led by standard linear devices, with strong revenue growth also for application specific analog ICs. The need for high precision or high speed products is growing strongly, driving up overall ASPs and supporting continued growth.

Discretes: the vast majority of revenues in this category are for power discretes, which are used widely in applications such as lighting ballast, motor drives and power supplies.

MCU/MPU/DSP: while industrial is often thought of as a sector requiring low processing performance, over two-thirds of growth in this category is forecast for 32-bit devices, to meet the needs of higher performance and increased communications. x86 MPUs had the highest revenues in 2007, but ARM MCUs are forecast to see highest growth.

Logic ICs: revenues for PLDs/FPGAs are forecast to grow strongly in industrial applications, while revenue growth for gate array/standard cell-based devices is forecast to slow.

Optoelectronics: growth is forecast to increase with replacement of incandescent bulbs with LEDs in lighting applications and across the industrial sector as a whole. Strong demand for image sensors is also forecast in machine vision and video surveillance, while optocouplers continue to find strong demand in the automation sector.