The optoelectronics, sensors, actuator devices, and discrete semiconductors (O-S-D) market is expected to grow eight percent in 2014, reaching $63.5 billion, after one percent increases in 2012 and 2013, according to a new report from IC Insights. The big growth segments in 2014 include sensors/actuators and optoelectronics, projected to grow nearly 14 percent to $9.9 billion and about nine percent to $31.6 billion, respectively. Discretes also will recover, increasing six percent, to reach $22.0 billion.
The "2014 O-S-D Report" finds that all three O-S-D market segments will make steady gains until 2017, when the next economic slump is expected, according to IC Insights. Analysts forecast about a two percent increase in 2017 followed by a six percent rise in 2018, reaching $86.4 billion, which translates into a compound annual growth rate (CAGR) of 6.4 percent in the five-year forecast period.
The O-S-D market was negatively impacted by several factors in 2013, including economic uncertainty, price erosion, inventory corrections, and pockets of excess production capacity, according to IC Insights. The report indicates that 2013 was weaker than 2012 due to the global economy outlook and cautious system makers that reined in component purchases and maintained low inventories.
Despite the slowdown in 2013, the next five years promises to bring stronger sales growth for O-S-D components. The report forecasts that the O-S-D market share will account for nearly 20 percent of the total semiconductor industry's projected sales of $440.5 billion in 2018, the highest percentage since 1988.
The biggest component growth drivers over the next five years includes high-brightness LEDs for solid-state lighting and laser transmitters for faster optical networks as well as MEMS-based accelerometers, gyroscopes, and pressure sensors for highly adaptive embedded control and location-aware cell phones and other portable systems.
Despite falling price tags for HB LEDs, IC Insights expect lower prices to help drive up sales for new solid-state lighting applications, which will consume the excess capacity over the next few years. Laser transmitters also are expected to grow thanks to strong investments in high-speed optical networks, while pressure sensor sales will increase due to strong demand from the automotive industry, new portable systems such as smart phones and wearable personal activity trackers, and medical applications.
Other big component growth drivers include CMOS image sensors for machine vision, medical systems, and new human-recognition interfaces, as well as power transistors for hybrid and electric vehicles, energy-saving electronics, and more efficient battery management solutions, according to the report.