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O-S-D market still struggling to maintain growth momentum

Posted: 24 Oct 2013 ?? ?Print Version ?Bookmark and Share

Keywords:optoelectronics? sensors? actuators? discrete semiconductor? O-S-D?

According to the latest forecast from IC Insights, sensors/actuators will rebound in 2014 O-S-D market growth with double-digit increase. Several years after a strong recovery from the 2008-2009 downturn, the market for optoelectronics, sensors/actuators and discrete semiconductors (O-S-D) is on its way towards another all-time peak in total sales this year. But just like last year, O-S-D sales growth in 2013 has been anemic and struggling to maintain momentum on a quarterly basis, noted the market research firm.

Due to ongoing uncertainty about the weak global economy, price erosion in key product categories and low inventory levels at cautious system makers, total O-S-D sales are expected to grow slightly less than one per cent in 2013 to $58.6 billion after rising just one per cent in 2012 to the current annual peak of $58.2 billion. These back-to-back annual sales increases of about one per cent are nearly seven percentage points below the O S-D market's CAGR of 7.8 per cent over the past 15 years (1997-2012).

The growth rate for O-S-D sales this year is also substantially below the total IC market, which is expected to rise by about six per cent in 2013 to $268.9 billion. Until now, O-S-D salesdriven by optoelectronics and sensor productshave exceeded annual IC market growth rates in eight of the last 10 years (with 2005 and 2007 being the exceptions). In 2013, price erosion in optoelectronics and sensors, along with falling power transistor sales, have pulled down O-S-D growth for a second year in a row.

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Power transistors, which account for more than half of total discrete sales, are on track to drop nine per cent in 2013 after falling eight per cent in 2012the first back-to-back annual market contraction in more than 25 years, stated IC Insights. The O-S-D market is also taking a hit from slow growth rates in some of its largest and (usually) strongest product categoriesaccelerometers and gyroscope sensors, high-brightness lamp devices (i.e., LEDs for solid-state lighting) and CMOS image sensors, which are being weighed down by sharp declines in average selling prices (ASPs). Optoelectronics sales growth is expected to weaken to just five per cent in 2013 from a solid nine per cent increase in 2012, while sensors/actuators are showing little improvement with a two per cent rise this year, and the total discrete semiconductor market continues to head lower with an expected six per cent decline, primarily due to the sliding revenues for power transistors.

Even after this year's subpar increase of five per cent, optoelectronics sales are expected to reach a record-high level of $29.3 billion in 2013, compared to the current peak of $27.8 billion in 2012, despite significant slowdowns in revenue growth for lamp devices (eight per cent versus 18 per cent in 2012) and CMOS image sensors (five per cent compared to 22 per cent last year). In the sensors/actuators arena, price erosion continues to slow sales growth in the large product category of acceleration and yaw sensors (accelerometers and gyroscopes), which are forecast to increase just five per cent in 2013 compared a CAGR of about 24 per cent over the last five years (2007-2012). The total sensors/actuators market segment is expected to reach a record-high level of $8.9 billion in 2013, which is about two per cent above the current peak of $8.7 billion set in 2012. When the three O-S-D segments are combined with projected IC sales, the total semiconductor market is expected to reach $327.5 billion in 2013, which would be a five per cent increase from the $313 billion logged in 2012.

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