Semiconductors

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Market analysis

Third quarter global semiconductor industry sales reached a record high of US$87bn a 6% increase over the second quarter global sales totals and comfortably higher than the World Semiconductor Trade Statistics forecast of 4%. Year-over-year growth also advanced to 8%.

As in previous quarters, Q3’14 sales growth were uniformly strong across geographical and product segments. Q3’14 sales in the Americas (10%), Europe (1%), Japan (2%), and Asia Pacific (6%) grew quarter over quarter. From a product segment perspective, third quarter sales growth was also comprehensive, as month-over-month sales of virtually all major product categories grew through the third quarter.

The processing, sensing and communications semiconductor device portion of the Internet of Things (IoT) will be a rapidly growing segment of the total semiconductor market, growing 36% in 2015, compared with projected overall semiconductor market growth of 6%. Processing is expected to be the largest revenue contributor to the semiconductor IoT device forecast, at US$7.6bn in 2015, while sensors are forecast to see the strongest growth, with 48% growth in 2015. The processing semiconductor device segment consists of microcontrollers and embedded processors, while the sensing semiconductor segment includes optical and non-optical sensors.1

The automotive industry is expected to play a growing role in the semiconductor demand from IoT through the end of the decade, with six segments in the top 15. Regulations for safety and a need for convenience and more autonomous vehicles are driving tremendous demand for new semiconductor devices in the car. One example of how the IoT will transform an automobile is the use of predictive maintenance. Using small sensors throughout the engine, predictive maintenance allows for a better experience for the consumer while enabling tremendous cost savings for both the consumer and the automotive dealer.

LED lighting will also be a huge volume play, both in lowering costs and enabling new services through its capability to connect, network and sense the environment. Consumers looking to enhance their lifestyles will also play a central role in growing IoT demand, which in turn will create more demand for semiconductors. Smart TV and set-top box revenue will continue to grow due to the increased need for processing.2

  1. Gartner, Oct 2014
  2. Gartner, Nov 2014

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