Semiconductors in the Industrial Sector 2005 - Worldwide - 17 August 2005?
The industrial sector is one offering highly consistent growth for semiconductor suppliers. While it does not benefit from the hype and glamour of other higher technology sectors (such as wireless and digital consumer), neither does it suffer from the extremes of the "boom and bust" cycle associated with the semiconductor industry in general.
While industrial is steady and dependable, it is also exceptionally fragmented; high volume opportunities are limited, applications are extremely diverse and a significant proportion of the market is supplied via distributors, resellers and agents. This makes it one of the hardest sectors for semiconductor suppliers to effectively target their resource at and expertise on and is why it has so often been dismissed in the past. However, IMS Research estimates that semiconductor revenues in the industrial sector totalled almost $20 billion in 2004, indicating that the opportunity in this sector should in no way be over-looked by suppliers. Texas Instruments was the largest supplier of industrial semiconductors in 2004, ahead of STMicroelectronics and Toshiba.
Broadly speaking, the industrial sector can be segmented into ten different application areas: Automation (e.g. PLCs, embedded computer boards, industrial PCs), Drives (AC/DC drives and motion controllers), Environment, Building Control & HVAC (boilers, pumps, lighting, meters), EPOS,EFT & Automatic ID (smart cards, card readers, EFT, EPOS), Fire/Security (fire alarms, intruder alarms, CCTV, access control), Instrumentation, Test & Measurement (lab equipment, oscilloscopes, test equipment), Medical (imaging, home health, cardiac rhythm management, hearing), Power/Energy (power supplies, renewable energy), Transportation (trucks, buses, construction, agriculture, fork lifts), Other (vending machines, ticket machines, catering equipment, robotics, TV broadcast).
Across these ten sub-sectors, IMS Research has identified 150 different equipment types in the industrial sector and has established that just 20 of them are forecast to account for almost half the total semiconductor revenue growth over the period 2004 to 2010. Colin Barnden, Senior Analyst and report author commented “Success in the industrial sector is highly dependant on understanding which are the ‘key applications’ and acting on them before your competitors do. Targeting applications with a large TAM but which are slow growth/no growth areas is a bad long term strategy, while targeting applications which have both limited size and no growth could be career limiting”.
Further information on the source document for this article [“The World Market for Semiconductors in the Industrial Sector” – published September 2005] can be obtained by contacting Colin Barnden via e-mail at
Colin Barnden is director of IMS Research's Semiconductor Research Group.
About IMS Research
IMS Research is a specialist supplier of market research and consultancy services on global electronics markets. Information from IMS Research is used by major companies worldwide to assess market trends, solve marketing problems, and improve the efficiency of their businesses. IMS Research is an international company, selling in more than 35 countries around the world and is supported by headquarters in Wellingborough, UK and an office in Austin, Texas. IMS Research’s semiconductor research group publishes detailed analyses of new and emerging applications in the semiconductor industry.