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Thanksgiving is over and the 4th quarter of 2011 is rapidly drawing to a close. 2011 was a more modest year than 2010, with some companies posting lower revenue volumes than the prior year. Texas Instruments, for example, is down 1% over the first three quarters. Certainly, this could be recovered in the fourth quarter though. Intel Corporation has been a notable exception, recently reporting a 28% year-over-year revenue increase. The question is now, what will 2012 hold in store for the semiconductor market?
The global macroeconomic environment remains uncertain however. The debt crisis in Europe remains an issue, with contagion threatening to spread even to France and Germany. Postponements of projects in this area, particularly around telecom infrastructure, could threaten the growth of processor shipments in EMEA. Likewise, a slow-down in China could dampen semiconductor shipments there as well. So far, growth seems on-track in the US, but as we now live in a global economy, it is questionable how long the US can hold out if things really sour in Europe.
In terms of vertical markets, a number of changes can be expected. The great days of military expenditure are likely over for the immediate future, and defense companies will likely be competing over smaller budgets with more stringent delivery requirements. The communications and networking segment will likely see continued strong growth, as Next Generation Networks (NGN) must be built to meet the needs of tomorrow’s smartphones and other connected devices. Industrial automation can be expected to grow through the development of M2M technology and upgrading of legacy hardware. The energy and medical markets should also have strong growth opportunities, due to smart grid expansion and aging populations in developed countries worldwide, respectively.
In the end, regardless of whether the global economy gets better or worse, we can still expect the continued innovation and discovery within the semiconductor market to present opportunities to suppliers across the embedded ecosystem.