The Singapore Semiconductor Industry Association (SSIA) recently held its 2011 Summit. Estimating the global semiconductor industry in 2012, the SSIA agrees with Future Horizon forecasts stating that 2011-Q3 will be flat (+/- 1 percent), and that 2011-Q4 will show a slight decline (-1/-2 percent) with total year growth of 1 percent as compared with growth of 2010 +32 percent.Pasquale Pistorio, honorary chairman, ST Microelectronics, who spoke at SSIA’s Summit, described expectations for 2012 as including a low first half, followed growth of +8 percent and 2013 growth of 22 percent. “The industry will reach the elusive $400 billion mark in 2013,” noted Pistorio. The global semiconductor market will be $313 billion in 2012.
Meeting semicon industry challenges
According to the SSIA, the semiconductor industry challenges going forward include:
Industry growth in an uncertain market: The semiconductor industry is cyclical – and this poses challenges. “Excessive investment in inventory during expansion or economic slowdown, or both, has been the way of life in this industry,” said Pistorio. “The semiconductor industry is characterized by big market swings. In 2001, the swing was +69 percent. Now is a new swing. This is the first correction of this decade. This is the nature of the industry - this is business as usual.”
Growth of emerging semiconductor companies: With semiconductor startups declining in number and VCs becoming more and more hesitant to invest funds in getting them off the ground, a different approach is needed to enable these innovative entrepreneurs to gain a foothold in the semiconductor market.
To encourage growth in this sector, SSIA will become involved in a semiconductor-focused company incubator to guide the creation of growth of Singapore- based fabless semiconductor startups; create an SSIA emerging company board with a focus on better meeting the needs of emerging semiconductor companies and facilitating coordination with established Singapore semiconductor companies; and coordinate with Singapore government agencies and the Economic Development Board on infrastructure support initiatives for emerging semiconductor companies.
Asian semiconductor industry worth $177 billion in 2012
Estimating the Asian semiconductor industry in 2012, the SSIA said that Singapore plays a significant role in the overall. The Asian semiconductor market is expected to be $177 billion in 2012. According to SSIA projections, the 2012 Singapore semiconductor market will be approximately $44.6 billion.
Year 2010 was a record year for Singapore's electronics industry. The industry attained historic highs in both manufacturing output and value-added. Electronics manufacturing output grew 26.9 percent in 2010 to reach S$89.9 billion, far surpassing the global industry growth of 9.3 percent. The electronics industry was also the largest contributor to Singapore's 2010 GDP from the manufacturing sector, with its share of GDP increasing to 7 percent from 5.7 percent in 2009.
The strong growth of Singapore's electronics industry was enabled through industry transformation. Over the years, the electronics industry has transformed to manufacture higher value-added products and R&D. This is illustrated through two main sectors - semiconductors and data storage.
Singapore's semiconductor industry posted a nominal growth of 49.8 percent, outpacing the global semiconductor industry's 32.5 percent growth in 2010. As a result, Singapore's manufacturing output share of global semiconductor revenues increased from 11.2 percent in 2009 to 13.5 percent in 2010.