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Industrial semiconductor market to grow 3% in 2012

Posted: 19 Nov 2012     Print Version  Bookmark and Share

Keywords:industrial semiconductors  outlook  LED 

Growth of the industrial electronics semiconductor market is set to fall short of previous expectations in 2012, said IHS. Revenue for industrial semiconductors—used in a wide array of application markets from home automation to aeronautics and military purposes—is projected to finish the year at Rs.1.66 lakh crore ($31.4 billion), up 3 per cent from Rs.1.61 lakh crore ($30.5 billion) in 2011.

"This year's meager expansion contrasts with the solid 9 per cent increase of last year and the exuberant surge of 35 per cent in 2010 immediately after the recession. It also represents a significant downgrade from the previous forecast of 7.7 per cent growth issued in July," according to IHS.

This year will bring the slowest growth for the next four years, with revenue set to rise in a range from 7 to 12 per cent during each of the next four years. Revenue is forecast to reach Rs.2.37 lakh crore ($44.8 billion) by 2016.

"The chip revenue forecast was dialed back after economic headwinds got stronger in the second quarter, affecting several top semiconductor suppliers and original equipment manufacturers of industrial electronics," said Jacobo Carrasco-Heres, industrial electronics analyst, IHS. "And when hoped-for growth did not pan out as expected and sales eventually came out lower, the market was downgraded to reflect the changed circumstances."

Among the companies affected by the downturn in industrial semiconductors are Texas Instruments, Analog Devices Inc., Infineon Technologies, Atmel, Fuji Electric and Linear Technology.

Manufacturers that have lowered their 2012 outlook because of weaker orders include Danaher, Siemens, Bombardier, Agilent, Vestas and Johnson Controls.

Industrial semiconductors are used in many markets and applications.

"The one segment that seemed to have remained untouched this year was the robust light-emitting diode (LED) market, thanks to the LED lighting boom that has taken hold in many parts of the world," said Robbie Galoso, principal analyst for electronics, IHS.

Second-quarter LED sales for Philips climbed 37 per cent from year-ago levels, and other LED lamp suppliers like Cree, LG Innotek and Samsung LED also enjoyed solid second-quarter results.

Still, global economic concerns continue to trouble the industrial electronics industry as a whole. The financial worries of the euro zone, along with slower expansion in China and the ongoing high unemployment rate in the United States, threaten to derail any growth anticipated in the future, especially if markets take a turn for the worse.

As a result, manufacturers in the space have issued a cautionary warning for the short term amid the generally lowered outlook for the year, even though industry players remain hopeful that improved conditions could be on their way.

For more statistics and forecasts, click here.

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