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IC content in electronic systems set to rise

Posted: 27 Jan 2011     Print Version  Bookmark and Share

Keywords:IC content in electronic systems  semiconductor average selling prices 

IC Insights Inc. reports that semiconductor content in electronic systems hit a record high of 25.4 per cent in 2010, which could further rise in view of the projected increase in IC average selling prices in 2011 and 2012. The semiconductor industry posted a record high dollar content in electronic systems of 25.4 per cent in 2010, says IC Insights.

The market research firm further predicts that the percentage of semiconductor content in electronic systems sales will continue to rise as a result of the projected increase in semiconductor average selling prices (ASPs) in 2011 and 2012.

The 2010 mark was 2.3 percentage points higher than the previous high of 23.1 per cent first reached in 1995 and again in 2006, according to IC Insights.

Bill McClean, president of IC Insights, said the record is significant. "With semiconductor content increasing in electronic system sales, it indicates that the semiconductor market is growing faster than the electronic systems industry," McClean said.

McClean added that the electronic systems market is increasing 6 per cent per year, which suggests that the semiconductor industry is on pace to grow 8-9 per cent this year. This is consistent with IC Insights' forecast for 2011 semiconductor sales growth, which is higher than several rival market research firms.

According to IC Insights, 2009 was the first year on record that showed an increase in semiconductor content in electronic systems in a year when the semiconductor market declined.

In the 22-year period from 1989 through 2010, the percentage of semiconductor content in electronic system sales increased by 13.3 points, an average of 0.6 points per year, according to IC Insights. Historically, much of the volatility with regard to the percentage of semiconductor content in electronic systems has been due to IC price changes, the firm said.

But in 2009, the IC ASP dropped 2 per cent, a record fifth year in a row of an IC ASP decline, IC Insights said. In 2010 IC ASPs increased by 1 per cent, the firm said.

IC Insights said it expects IC ASPs to continue to show improvement in 2011 and 2012. The trend towards increasing IC ASPs is forecast to cause the average semiconductor content in electronic systems to rise just over two percentage points over the next five years, from 25.4 per cent in 2010 to 27.8 per cent in 2015, according to the firm.

IC Insights believes the "ceiling"—maximum percentage of electronic systems sales that can go to semiconductors—is at least 30 per cent.

Dylan McGrath
EE Times

For more statistics and forecasts, click here.

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