El Segundo, Calif. — Although revenue for industrial electronics semiconductors was up less than one percent in the first quarter of 2014, compared to the fourth quarter, the expansion occurred during traditionally the weakest time of the year, according to a new report from IHS Technology. Revenues reached $8.61 billion in the first quarter of 2014, up 17.5 percent from the first quarter of 2013, driven in part by a continually improving global economy, said IHS.
As a result, IHS analysts forecast a strong finish for industrial ICs, reaching $35.42 billion in 2014, up 9.4 percent from $32.39 billion last year. This could result in the strongest period in several years, following a growth rate of 8.8 percent in 2013 and a 5.0 percent loss in 2012, according to the “Industrial Semiconductor Market Tracker – Q2 2014” report.
“It’s tempting to overlook the industrial portion of the overall semiconductor industry because it’s a workhorse segment often taken for granted,” said Robbie Galoso, principal analyst for industrial electronics at IHS, in a statement. “However, industrial was second only to the mighty wireless space in racking up revenue for the total semiconductor market. Because of this, industrial electronics is, in every sense of the word, a phenomenal powerhouse in its own right.”
The best-performing industrial segments in the first quarter included factory automation, commercial aircraft, light-emitting-diode (LED) lighting, climate control, renewable energy, medical electronics, application-specific testers and transportation. “The segments benefited from a rapidly stabilizing housing market, improved consumer finances, increased capital spending and better credit conditions,” according to Galoso.
Segments that didn’t do as well included homeland security, military aircraft, and general-purpose test and measurement. The obstacles cited by the report: a tighter U.S. defense budget (military and security) and lengthening capital-approval cycles (test and measurement).
Big players include those that dominate the industry such as Texas Instruments, Analog Devices, Maxim Integrated and Microsemi. IHS reports:
- Texas Instruments experienced broad-based growth in areas of motor drives in factory automation.
- Analog Devices achieved higher-than-expected performance in all its major applications that included energy and military applications.
- Maxim Integrated saw strong growth in medical electronics for its analog solutions in low-power and portable patient-monitor devices.
- Microsemi rebounded with revenue derived from electronic-oriented aircraft such as the Boeing 787 and Airbus A350.
Most of the firms that struggled during the first quarter are in the LED lighting space, due to “normal seasonal pressures,” said IHS. These include Cree, Nichia and Philips Lumileds.
The United States, China, Japan and Germany together accounted for 71 percent of chip-design influence with the United States holding nearly one-third market share. IHS predicts that China will increasingly challenge the dominance held by the U.S. while taking advantage of a declining Japan. The top 10 market influencers include India, while the top 20 are heavily represented by Western Europe including Switzerland, the United Kingdom, and Italy.