Semiconductor End-Use: Market Diversity is a Good Thing
The semiconductor industry has been experiencing relatively balanced growth over the past few years, and we expect that this will continue throughout the forecast period. There will, of course, be some variation in growth rates among the end-use segments in terms of semiconductor consumption, but they all will track close enough to the average that none can be said to be the driver in the sense that the computer and communications segments have been drivers in the not too distant past.
In-Stat expects worldwide semiconductor revenue to grow by 2.4% in 2008 to $261.9 billion. The consumer segment will lead 2008 growth at 5.9% and the consumer and communications segments will gain share while the computer segment share declines over the forecast period. The computer segment, whose share has been trending downward since 2000, is expected to remain the largest segment by a wide margin, although, by 2012, its share is forecast to be 41.8%, well below the 50% + levels of the 1990s. Declining MPU prices have joined DRAM price gyrations as a significant factor in computer segment annual growth.
The communications segment has stabilized at slightly over 20% of all semiconductor revenue and we expect that the trend toward wireless, in everything from computer networking to telephony, will allow the communications segment to maintain this level. The third ranked consumer segment has experienced the strongest growth over the past 5 years and we expect that this growth will slow slightly, but will remain above the average, and that the consumer segment share will break through the 20% level in 2008. However, it is not expected to surpass the communications segment before 2013.
The traditional industrial markets are increasingly seeing standard computer and communications hardware replace custom hardware, but any losses here are balanced by growth in medical products. Accordingly, the industrial segment share is expected to be more or less flat over the forecast period.
The automotive segment’s share is also forecasted to remain essentially flat. There are many opportunities for semiconductors in high-end vehicles, but these are relatively low volume. The much-hyped impending growth of the automobile markets in China and India will be concentrated in low-priced vehicles with little semiconductor content. Overall, the innate caution and cost consciousness of the automobile industry will keep this growth in check.
Be sure and check out “Semiconductor End-Use Forecast—Market Diversity, it’s a Good Thing,” report #IN0804278SSF, due out very soon. This report will be available online at: http://www.instat.com/descriptions/semiconductor.asp
- Jim McGregor - Principal Analyst
, E-mail:mcgregorj@reedbusiness.com
Chinese Mobile Users are Ready for the Apple iPhone
The shock wave caused by the Apple iPhone has been spreading from the US to China at an unbelievable rate. Savvy entrepreneurs have been purchasing hundreds of thousands of iPhones in the US and Europe, then “cracking” the operating system to allow the device to be used on any GSM network. According to China Mobile, the biggest wireless carrierin China, there were about 400,000 cracked iPhones using its cellular network service at the end of 2007, representing one out of every 10 iPhone shipments announced officially by Apple. The figure surprised us as it is fourfold of that we estimated before.
We have never doubted that the iPhone will achieve greater success than iPod in China if Apple teams with China Mobile to launch its Chinese version. There are two reasons. Firstly, different from the US where the smartphone market is fairly limited, appealing primarily to business users, The smartphone market in China, though, is an entertainment-oriented individual consumer market. The main reasons that Chinese mobile users purchase smartphones include entertainment (such as music players, cameras and video) and to access mobile Internet applications (such as IM, e-book, and games). We believe the iPhone will be favored by these consumers as it can better meet such demand. Secondly, high-end handset buyers significantly outnumber high-end mp3 player buyers. We estimate that 20% of handsets sold in China in 2007 cost more than 4,000 RMB (US$533). In another words, there are an estimated 28 million potential users for the iPhone in China.
Further, the iPhone is not just a successful product. In-Stat feels that the iPhone is leading the way to a new generation of smartphones that are very different from their older counterparts. One important trend is that revolutionary UI and UE, enabled by touchscreens and 3D sensor technologies, will be widely used in the next generation of smartphones in China and around the world.
Also, the trend toward the mobile Internet will drive handset makers to deliver more smartphone models. More Internet applications, such as social networking, maps, search, and e-mail, will be developed for smartphones, and these will make the iPhone and other smartphones more attractive to mobile users who like to use their handsets to pass the time. In turn, the mobile Internet will become a new selling point for smartphones, and drive up sales. Taking the long view, In-Stat believes that the smartphone is evolving into a increasingly wide range of mobile devices, where cellular voice communications are just one function of the converged appliance.
For more information about Chinese smartphone market, check out In-Stat’s recently published report titled " Mobile Internet and GPS Change the Future of Smartphones in China," (IN0703655CWW), available online at:
