Glimmers of light have been spotted on the horizon for the troubled consumer electronics industry waylaid by the difficult economic environment which hit personal incomes and in turn discretionary spending.
The difficult macroeconomic environment in 2008 resulted in lower personal-income growth and a sharp drop in personal consumer consumption.
This had a direct impact on the consumer-electronics market and the semiconductor suppliers to that market. According to IDC, the worldwide semiconductor market for consumer devices declined 2.6pc from US$44.0 billion in 2007 to US$42.9 billion in 2008.
Growth in areas
Despite the overall downturn, pockets of growth could be found within specific application areas. The digital TV and set-top box semiconductor markets grew 7.2pc and 10.6pc, respectively.
In contrast, semiconductor revenues for DVD players/recorders declined 1.7pc year over year, while the semiconductor markets for portable media players and video-game systems declined by 10.5pc and 11pc, respectively.
With five major and a number of smaller application areas, the market for consumer semiconductors is competitive and diverse.
The fragmented nature of the market provides opportunities for many large and small suppliers, with the Top 20 companies accounting for less than two-thirds of the total consumer semiconductor market.
Toshiba on top
Toshiba had the largest share of the total market with a 10.2pc share based on revenues followed by Samsung Electronics, with an 8.5pc share. Renesas earned the third-largest market share at 4.9pc while ST Microelectronics and NEC Electronics rounded out the Top 5 suppliers with 4.6pc and 3.9pc market share respectively.
“The market for consumer semiconductors is at a critical point. While consolidation is occurring at both the product and IC levels, new competitors are emerging that have an advantage at providing low-cost goods and can serve the needs of OEMs focused on developing markets,” said Michael J. Palma, senior research analyst, Consumer Device Semiconductors.
“Semiconductor firms need to focus on and align their businesses to address future opportunities in the consumer space,” Palma added.
2009 outlook
Looking forward, IDC expects the consumer device semiconductor market to continue to decline by more than 13pc in 2009, followed by a modest gain of 1pc in 2010. Further market growth will be inhibited by a number of factors, including the consolidation of features into smart phones and other devices, and integration reducing the number integrated circuits (ICs) in devices.
And with consumer spending expected to remain depressed, market revenues are not likely to return to pre-recession levels until after 2013.
“When the economy rebounds, the trend toward home entertainment and connected mobile devices will present a growth opportunity for semiconductor players in the consumer device space,” says Ajit Deosthali, research manager, Consumer Device Semiconductors.
By John Kennedy
Photo: According to IDC, the worldwide semiconductor market for consumer devices declined 2.6pc from US$44.0 billion in 2007 to US$42.9 billion in 2008.
