Analyst: A-P growth at expense of Japan, US — but not Europe

July 13, 2007 – A new report from IC Insights Inc. indicates the continued shift of semiconductor production to the Asia-Pacific region is pulling marketshare away from the Japanese and US regions — but Europe remains surprisingly steady.

The data clearly maps how the US took the top IC sales mantle from Japan in the early 1990s, and how the two regions’ chip sales have swung in different directions since then. IC companies based in the Americas region accounted for nearly half of worldwide IC sales in 2006, about the same as they did two decades ago. Japan’s marketshare, meanwhile, has steadily weakened since peaking in 1988 (51%), down to 17% in 2006. And despite strength in certain companies/areas (e.g. Toshiba in flash memory), Japan’s IC sales will continue to drop, to just 14% of global chip sales in 2011, according to IC Insights’ projections.

As the US and Japan have seen their worldwide IC sales shares dip since the late 90s, clearly the gains are coming from the Asia-Pacific IC supplier segment, which made up just 5% of chip sales in 1991 but closed the gap with chipmakers in the Americas from 51%/26% in 1999, to 47%/26% in 2006 (that 26% equals the shares of Japan and Europe combined!), and to a projected 45%/32% by 2011. Much of this surge, the firm noted, is due to the emergence of foundries, which are expected to continue to see strong growth.

Meanwhile, European chipmakers have been consistently around 8%-11% share for more than two decades, and IC Insights predicts this trend to continue through 2011. European suppliers have always been strong in certain areas (e.g., analog, MCU, and application-specific logic) “that are not easily swayed to switch over to a foreign supplier,” so European electronic systems manufacturers typically have stayed with their European suppliers, according to Bill McClean, president of IC Insights, in an e-mail Q&A with WaferNEWS. For example, ST is a major supplier to European automotive electronics firms, and counts Nokia as its biggest customer; and Philips/NXP is “well entrenched in the analog market,” he noted.

Still, he sees European electronic systems sales continuing to represent a smaller share of total world production, which will eventually mean less share for the regional semiconductor suppliers in the future, he noted.


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