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Semiconductors and Components

Economic Recovery Sets Stage for Semiconductor Growth

15 January 2014

Stronger gross domestic product (GDP) growth and rising demand for mobile electronics equipment will drive the electronics industry in 2014, according to industry analysts, economists and supply chain executives speaking at trade association SEMI's annual Industry Strategy Symposium.

Robert C. Fry, senior economist at DuPont, said that global leading indexes are trending up, but not strongly or universally. He forecasts global GDP growth of 3.1 percent in 2014 — up from 2.4 percent in 2013. He said there was a correlation between global GDP and semiconductor output with the semiconductor industry outpacing the overall economy.

Fry added that semiconductor shipments are setting new highs again and chip shipments have been trending up for more than a year.

Dale Ford, vice and chief analyst at IHS, said that the semiconductor industry continues to be cyclical. A new cycle began in September 2012 and will reach its peak in the second half of 2014, according to Ford. He said the semiconductor industry will grow 5.8 percent this year.

Ford added there has been a slowdown in capital spending by major semiconductor companies. Capital expenditures declined by 9 percent in 2012 and an additional 3.7 percent in 2013 with Intel and Samsung transitioning existing capacity for use on next-generation technology.

Rod Morgan, vice president and Micron Technology, said memory IC requirements of mobile multifunction devices such as smart phones and media tablets are being impacted by an increasingly connected lifestyle. He noted that mobile devices are embedded with sensors and greater amounts of mobile memory and have greater requirements for reliability and security.

Morgan called for greater supply chain collaboration to enable network infrastructure to be successful in meeting those requirements. "The pace at which we enable the infrastructure will determine the speed of innovation," he said.

Mark Thirsk, managing partner at Linx Consulting, discussed chemicals and materials needed for advanced semiconductor devices He said there was a high upside potential remains in specialty materials for semiconductors, but significant R&D requirements remain a barrier.

Nick Yu, senior vice president of Qualcomm, discussed the unprecedented opportunity that the pervasive computing and the mobile era offer. He said consumers want is a digital "sixth sense" with the devices they use augmenting "human ability."

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