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Global Electronic and Semiconductor Industry Analysis: Sensors/MEMS to Create Strong Growth Prospects

 Published Date: 2019-06-04   |   Views: 50   |  Electronics & Semiconductor  

The global electronic and semiconductor industry is anticipated to create growth opportunities with high demand for consumer electronics and need for smarter and more connected devices in today’s technologically advanced world. Emergence of advanced technologies, recovering economy of some countries, and need to replace traditional electronic products with technologically sophisticated ones are predicted to strengthen the global electronic industry. On the other hand, strong investment in research and development, innovations, and increase in semiconductor initiatives and events are foreseen to boost the growth of the global semiconductor industry.

Increasing Penetration of Smartphones to Help Global Consumer Electronics Market to Grow

Research analysts are of the opinion that wearable devices, consumer electronics, display, semiconductor equipment, and wireless communications are some of the leading sectors of the electronic and semiconductor industry. Demand for consumer electronics is foreseen to increase due to the rising penetration of smartphones. Growing popularity of smartwatches, fitness trackers, and healthcare wearables is prophesied to bode well for the wearable devices market. Need for wireless communication is foretold to increase with the rapid growth of globalization. Other factors such as high use of smartphones, e-commerce, and social media could support the growth of the global wireless communications market.

Sensors are also forecast to show considerable growth in the near future owing to their high requirement in the development of smart cities. Rising IoT trends, important applications in the automotive industry, and advancement of consumer electronics could be other powerful factors augmenting the demand for sensors.

Leading Companies to Use New Product Launch to Increase Market Share

Intel, a leading US-based semiconductor manufacturing company, announced in May 2019 that its technology was used by DownUnder GeoSolutions for building a new high-performance computing system tailored for oil and gas exploration. Top semiconductor companies are expected to build their business on technological advancement. Qualcomm is another top semiconductor company. According to its press release in May 2019, it has built the world’s first 5G PC in collaboration with Lenovo. This PC is powered by the company’s Snapdragon 8cx 5G compute platform.

US semiconductor manufacturing company, Broadcom launched a frictionless value-based software licensing model in May 2019. The model is developed to offer high flexibility, predictability, and clarity of software consumption on z/OS mainframe systems.

In the electronics industry, Samsung and Foxconn are considered to be key players.

Top 5 Consumer Electronics Trends in 2019

Rise of Automotive Industry: Regulatory changes and fast innovation in the automotive industry are anticipated to push the demand in the electronic as well as semiconductor industry. Flying taxis, telematics powered vehicles, large-screen infotainment systems, EVs, and autonomous cars are some of the crucial innovations driving the growth of the electronic and semiconductor industry.

Popularity of Smart Homes: The need for improved connectivity and the rising trend of smart homes are foreseen to augur well for the electronic industry. The smart homes market is foretold to exhibit substantial growth in the future with the introduction of more number of connected appliances, including smart entertainment, lighting, and basic security monitoring systems.

Demand for Voice Assistance: According to market observers, voice-assisted personal entertainment systems are forecast to become extremely popular in the near future. Products such as 8K television offering multiple times higher picture resolution, clarity, and quality along with high-end features such as voice assistance are good examples of latest innovations highlighting the electronics industry.

High Adoption of AI: The demand for AI is predicted to improve tremendously in the consumer electronics industry as innovations in big data analytics, predictive technology, and speech recognition increase.

Deployment of 5G Cellular Networks: The many advantages of 5G over other networks are expected to increase its adoption in the coming years. High demand for speed, extensive connectivity, and stronger security is anticipated to increase the need for 5G technology.

Sensors/MEMS to Offer High-growth Opportunities in Semiconductor Industry

According to KPMG’s Global Semiconductor Industry Outlook 2019 report prepared in collaboration with the Global Semiconductor Alliance, sensors/microelectromechanical systems (MEMS) is the top growth opportunity sector for 2019. The report shows that 72% of all respondents in the survey selected high/extremely high on a scale of 1 to 5 when ranking sensors/MEMS as the top growth opportunity sector, followed by analog/RF/mixed signal and GPUs with 57% and 52% of the respondents in their favor. Taking fourth and fifth positions, system on a chip (SoC) and optoelectronics were ranked by 46% and 40% of the respondents.

 

Sensors/MEMS may be the top semiconductor sector in terms of growth opportunity in 2019. However, a large percentage of global semiconductor companies anticipate IoT to become the most important application driving revenue over the year. The IoT sector considered here includes personal wearables, industrial IoT, smart cities, and connected homes.

     In 2019, global technology spending on IoT is projected to touch $745 billion, according to the International Data Corporation (IDC)

    In 2022, global technology spending on IoT is expected to touch $1.2 trillion, according to the IDC

     In 2019, over 26 billion IoT connected devices could be in use globally, according to Statista

     By 2025, the number of IoT connected devices installed is expected to increase to more than 75 billion globally,   according to Statista

Expanded Research and Development and Innovation as Key Strategies

Research and development is prognosticated to become the highlight of the semiconductor industry with the increasing pressure to innovate and come up with new products and services. For instance, chipmakers are expected to feel the pressure to launch improved solutions and products with the advent of emerging technologies. Research and development could not only be used to introduce new offerings but also diversify into new business domains with the aggressive evolution of the semiconductor industry and high level of competition.

US and China to Continue to Remain Semiconductor Powerhouses

Yes, it is true that the trade face-offs between the US and China have had their share of negative impact on the global semiconductor industry. Despite of this, a decent number of global semiconductor companies still believe the two economies could be highly important markets in the coming years. Some semiconductor companies expect these two markets to become points of high focus in their three-year revenue growth strategy.

During the past few years, China was looking to form joint ventures and purchase intellectual properties to reduce its dependency on semiconductor imports. However, the US cited national security concerns and used tariffs to correct its trade imbalance with China. This is expected to see a continuation of chip imports from China, at least for the next few years.

 

Wireless Communications to Provide Most of Company Revenue

Wireless communications, which includes smartphones and other mobile devices, is expected to provide the highest average percentage of revenue to semiconductor companies in fiscal 2019, according to KPMG’s Global Semiconductor Industry Outlook 2019 report. According to the respondents in the survey, this application will account for an average 30% of their company revenue over the year, followed by consumer electronics and data centers/storage projected to comprise 25% and 23% of the revenue of semiconductor companies. On the other hand, industrial and automotive are predicted to account for 23% and 22% of company revenue in the semiconductor industry in fiscal 2019.

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