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 2009 Forecast Trends In Electronics
Financial uncertainty has caused many forecasters to take another look at their predictions for 2009 and beyond. The first signs came towards the end of this year as sales in a normally strong quarter began to slip. If PC shipment growth is any indication of how the electronic component market is doing, then a cut in forecasted growth of PC shipments by nearly two-thirds, according to EETimes in November, doesn't sound good. What used to be a "ray of hope" for the semiconductor industry is now being challenged by the credit crisis. Consumer spending on electronics heavily affects the semiconductor and IC market. China, India, and Eastern Europe are all going to play a big role in this depending on how the economy plays out.

According to EETimes, Dale Ford, an analyst with iSuppli said that in discussions with semiconductor suppliers, equipment OEMs and contract manufacturers, a story of fear and great uncertainty has emerged. As dramatic declines in consumer and industrial confidence began developing in late summer, order cancellations began to grow and in many cases, slowing orders degenerated into a complete stop in orders as players across the supply chain moved to extremely cautious positions in the face of increasingly negative economic news.

SIA projects that IC sales will decline by 5.6 percent to $246.7 billion in 2009 before resuming growth in 2010. Sales will grow by 7.4 percent in 2010 to $264.9 billion and by 7.5 percent in 2011 to $284.7 billion.

National Semiconductor’s CEO, Brian Halla, believes that we may be at the bottom of a downtrend that usually follows a period of large growth. He suggests that one new trend may be the movement of processing to analog rather than digital circuits. "The intense pressure for low-power circuits and energy-efficient operation can be addressed very effectively in the analog realm." The example Brian gave was their LMV1089 audio chip which uses analog far-field noise suppression in real time to perform the same noise reduction as a digital circuit but with only 10% of the power consumption.

Another trend we will see as soon as 2011 is commercial OLED lighting applications. Examples of potential applications include illuminating room switches, desk drawers, staircases etc, illuminating accessories (e.g. toothbrushes, bags), underwater lighting, and interior lighting for vehicles. This follows along with the trend of lower power, better efficiency.

We may also see a shift in manufacturing and design services. According to EMSNOW, Vietnam is becoming a "semiconductor manufacturing services destination". The government's emphasis on making electronics a key export earner is pushing Vietnam to migrate to the path of high-tech industry. The country is also experiencing rapid increase in semiconductor consumption. Many investors feel that it is easier to do business in Vietnam than in China due to lesser regulatory hassles and government business-friendly policies. The country has been witnessing double-digit growth rate. In recent years, electronics and IT industries have recorded the average growth rate of 25-35% a year.

One thing we may see soon because of the declining demand is a corresponding decline in price. In the past month the price of raw materials like silver, lead, nickel, copper, even gold, has all dropped considerably. Some manufacturers are cutting production in order to clear inventory. This will further reduce demand for raw materials and therefore the price of electronic components across the board.


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