IBISWorld: Semiconductor firms concentrate on acquisitions & JVs
According to IBISWorld, in the coming years, demand for semiconductors and electronic components will be driven by increasing sales of new computer and consumer electronics products.
This will be due to the growing use of electronics in home appliances, communications and automobile products and the increasing application of electronics in industrial production, such as in automation and control.
For these reasons, industry research firm IBISWorld has updated its report on the "Global Semiconductor & Electronic Parts Manufacturing industry".
In 2013, the Global Semiconductor and Electronic Parts Manufacturing industry is expected to generate $713.1 billion in revenue, up 3.7 percent from the previous year.
Although this will mark the fourth consecutive year of growth, industry revenue is expected to remain flat overall from 2008 to 2013, averaging annual gains of a miniscule 0.02 percent over the period, says IBISWorld industry analyst Nima Samadi.
The demand for consumer electronics, computers and industrial machinery was hampered by a slow global economy in 2008 and 2009, which ultimately hindered demand for semiconductor and other electronic components.
Demand for electronic products did begin to recover in late 2009 (prompted by restocking), and this wave of recovery continued through 2010 and into early 2011. However, global economic growth weakened in 2011 and is expected to remain relatively weak in 2013, softening demand for electronic components.
Over the five years to 2013, the production of final electronic products has continued to shift from developed countries, such as the United States, Japan and countries in Western Europe, to countries where labour costs are relatively low (mainly in Asia) "“ a factor that has pulled component manufacturers in the same direction, continues Samadi. The Asia-Pacific's share of the worldwide semiconductor market is expected to continue rising at a rapid rate, as is China's share of worldwide semiconductor consumption.
Not surprisingly, IBIS says the top companies in the Global Semiconductor and Electronic Parts Manufacturing industry are Intel Corporation and Samsung Electronics Co. Ltd.
Concentration in the semiconductor segment is increasing due to a trend for larger participants to acquire smaller companies that have fewer resources. There is also a trend among semiconductor companies toward joint ventures and strategic alliances in manufacturing and research and development.
Over the next five years, industry growth will be promoted by a strong global economy and buoyant demand for final electronic products and related components. Demand for semiconductors and electronic components will be driven by increasing sales volumes of new computer and consumer electronics products, the growing use of electronics in home appliances, communications and automobile products and the increasing application of electronics in industrial production (such as in automation and control).
