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 2006 Electronics Forecasts
Much uncertainty looms over electronics industry forecasts for 2006 after what most analysts would call a relatively "flat" year in 2005. According to Spencer Chin of EE Magazine, "increasing global competition, particularly from China and India, outsourcing concerns, continuing consolidation of manufacturing, and rapidly changing technologies all cast a cloud of uncertainty." Other analysts blame the war in Iraq, high energy prices, and supply issues. Uncertainty isn't necessarily a bad thing, though. After all, no negative growth positions are projected, but there's no abundance of bullish growth positions either.

According to Mark LaPedus of EE Times, Analysts painted a picture of an IC industry with increasing growth, increasing consolidation, and much less volatility than in the past. After achieving 6.6 percent growth in 2005, the worldwide chip market is set to grow 8 percent in 2006 and 10.6 percent in 2007, according to the latest prediction from World Semiconductor Trade Statistics (WSTS). Test and assembly equipment is expected to increase about 5% as well. He also notes that uncertainty about the Federal Reserve's monetary policy, increased credit card payments, tighter consumer credit, and volatile energy prices are all potential show-stoppers.

The Optoelectronics Industry Development Association's (OIDA) says the optoelectronics market is showing vibrant growth and will likely reach 1 trillion by as soon as 2015. During their annual forum, leading venture capitalists discussed promising investment areas including medical eye surgery, next generation fiber optical transceivers, advanced liquid crystal displays and thin film technology, high efficiency silicon solar cells, standardized laser diode fabrication, and high efficiency thermal LED packaging. OIDA's Executive Director, Dr. Michael Lebby, emphasized growth for high-brightness LEDs in automotive applications where he predicted that headlights using white LEDS would appear in consumer vehicles in the 2007/8 timeframe.

An article from December's Business Wire predicted that global consumption of switches would reach US$3.75 billion in 2006, driven by increased spending in consumer electronics, IT, industrial equipment, and automotive applications.

To grow in what is now a global market, electronic manufacturers and distributors must set themselves apart by not only having the latest technology, but also by being more cost-effective and demonstrating more customer intamacy. Companies that develop low-cost products aimed at emerging markets in Asia will be more successful in this global economy in the long run.


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