The invention and evolution of integrated circuits (ICs) has powered the phenomenal success of the semiconductor industry. It produced a period of record growth that lasted more than two decades. However, the implosion of many Internet-based companies, coupled with weaker economies around the globe, reduced consumer demand for products that are the bread and butter of the semiconductor industry. Semiconductor suppliers and the equipment industries that form its infrastructure face many challenges. Confronted with sharply declining sales, they are making choices that inevitably will shape its future. Despite -- and possibly because of -- a variegated business atmosphere, there are still continual technological advances in hardware and software. These advances spur improvements in chip design and technology that foster the emergence of new chips and new applications.
According to a soon-to-be-released study from Business Communications Company, Inc, RGB-262: New Chips for New Applications, semiconductor sales revenues dropped by 32% in 2001. Not since 1985 has there been such a dramatic downturn in the industry. The shrinking share of the personal computer market may signal a saturation point. But it also may foreshadow a sea change in computing styles as computing power and portability options converge with a growing penetration of wireless technologies and products. The semiconductor market is expected to reach $246 billion by 2006, as it grows at an average annual growth rate (AAGR) of 12.1% in the coming five years. The market for ICs, not including discretes, optoelectronics, and sensors, is expected to total $226 billion by the end of the forecast period, as it grows at an AAGR of 16.5% through 2006.
Highlights from the report:
- As the line between work and home environment blurs, both the home and the automobile are becoming hubs of computing and connectivity. Home networking will enable internal entertainment, security, and business appliances to communicate. Networking technologies, such as Bluetooth and 802.11, will sync up external devices. Advances in security, control, and comfort features literally will transform the car into a "home-away-from-home."
- Nanotechnology initiatives are being funded worldwide. While the implications of this research suggest new paradigm choices in practically every economic sector, it is clear that there is a growing commitment to tackling the challenges hindering its implementation.
- The global power structure of the semiconductor supplier industry also is changing. China is emerging as a formidable player and has joined the World Trade Organization, another strategic move reflecting its growing international influence.
- Microcontrollers, programmable logic, and analog components will be the leading chip categories within the next five years. Residing in end products for every major market, they will populate set-top boxes, cellular base stations, web pads, air bags, diagnostic imaging, and a host of military applications.