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Industrial semiconductors ride wave of surging economy

Posted: 17 Mar 2015 ?? ?Print Version ?Bookmark and Share

Keywords:IHS? industrial semiconductor?

The industrial semiconductor market will log a 9.7 percent CAGR over the next several years as revenue increases from $34.8 billion in 2013 to $55.2 billion in 2018, according to the latest report from IHS. Rising capital spending by companies and continued economic growth, especially in the U.S. and China, will help drive demand and drive sales growth for industrial semiconductors, added the market research firm.

Based on the latest information from the 4Q14 Industrial Semi Market Report from IHS Semiconductors and Components Service, factory automation, building and home control and commercial aircraft are driving demand for industrial semiconductors. In fact, industrial semiconductor sales posted 4.7 per cent growth in the 3Q14 alone compared to the previous quarter. By the end of 2014 the market grew an estimated 16.8 per cent over the previous year. Demand was especially strong for optical LEDs, which grew 23.4 per cent, rising from $6.3 billion to $7.7 billion. Discrete power transistors and thyristors posted 13.4 per cent growth, rising from $5.5 billion in 2013 to $6.3 billion in 2014.

Global industrial semiconductor market forecast

Industrial OEM factory revenues were expected to grow 8.3 per cent in 2014 on increased sales in the building and home-control market. High-growth categories include LED lighting and IP cameras and other digital video surveillance products.

"Because of strong growth in the industrial segment, semiconductor companies are paying more attention to this market as more chips are being used in applications that did not previously use semiconductors," said Robbie Galoso, principal analyst for IHS. "Growth in the industrial segment has also been buoyed by a gradual acceleration in the global economy, which continues to boost industrial equipment demand, especially from the U.S. and China."

The global economy was strong in 2014 and, led by the U.S., it is expected to flourish through 2018. U.S. economic growth is broad-based than in other regions, with a more stabilised housing market, improved consumer finances and credit, and increased capital spending. U.S. real gross domestic product (GDP) growth is expected to reach 2.4 per cent in 2014, 3.1 percent in 2015 and 2.7 per cent in 2016.

The U.S. accounted for 30.5 per cent of all semiconductors used in industrial applications in 2013. China is the second largest industrial chip buyer, purchasing about 14 per cent of all industrial semiconductors. Its economy will grow 7.3 per cent in 2014, 6.5 per cent in 2015 and 6.7 per cent in 2016.

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