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From smart wristwatches that record heart rates, to intelligent armbands that track physical activities, wearable electronics and fitness monitoring devices are attracting increased attention from health-conscious consumers, causing shipments of MEMS sensors used in these products to more than quadruple in just five years.

Starting with a stable base in the $20.0 million range, revenue for MEMS motion sensors in wearable electronics and fitness monitoring is set to climb to $31.0 million this year and then jump 33 percent to $41.3 million in 2014, according to the IHS iSuppli MEMS and Sensors service from information and analytics provider IHS. An even larger increase, equivalent to 47 percent, will occur in 2015 when takings amount to $60.8 million.

“The biggest leap will occur in 2016 when annual revenue rises 50 percent to $91.5 million,” said Marwan Boustany, senior analyst for MEMS & sensors at IHS. “That means the market by then will have expanded by more than a factor of four from $20.8 million in 2011.”

The below figure presents the IHS forecast of global MEMS shipments for wearable electronics and fitness monitoring devices.

MEMS sensors in fitness monitoring devices and wearable electronics

Two trends are spurring demand for wearable and mobile health technology, in turn fueling the MEMS motion sensor market for wearable and mobile health devices, said Boustany. “One trend is the higher average life expectancy of people all over the world, coupled with the amplified prevalence of illnesses like cardiovascular disease and diabetes. The second trend arises from greater awareness in the population of health, fitness and wellness issues—indicated by the rapid growth in demand for healthy nutrition, diet programs, gym memberships and even health-based mobile applications.”

Activity monitors such as the FitLinxx Pebble and Fitbug, for instance, are increasingly finding their way into consumers’ hands as employers seek to augment their corporate wellness strategies, noted Shane Walker, senior manager for consumer and digital health research at IHS. “In the United States, this is due in part to the growth of consumer-directed healthcare plans and the Affordable Care Act, which is incentivizing insurers. These corporate programs are opening yet another channel of distribution for new monitoring devices,” he said.

Market drivers and the top wearable electronics devices

“Several factors overall will help drive the market for wearable electronics and fitness monitoring devices,” Boustany said. “For one, the sensor technology has reached a state of maturity, having been introduced to consumers via smartphones and their use of accelerometers, gyroscopes and electronic compasses. The billions of sensors consumed by smartphones to date, meanwhile, have served to lower the average selling prices of the sensors and improved their production. A significant market stimulus also comes from patients diagnosed with health issues related to the lack of exercise, encouraged by their doctors—or in some cases, their employers—to track activity and manage their condition.”

Other important drivers are the proliferation and suitability of the Bluetooth Low Energy 4.0 communication protocol, as are the efforts of sensor manufacturers in combining and miniaturizing sensor technology.

For the latter, sensor fusion technology conjoined with small combo sensors—such as 9-axis inertial measurement units from French-Italian maker STMicroelectronics, California-based InvenSense and Bosch of Germany—make it easier than ever to incorporate motion sensors in a wide range of wearable devices.

Development kits proposed by sensor suppliers like InvenSense have likewise stimulated the imagination of designers for sports applications. Here new products are emerging, such as ski and snowboard goggles with motion sensors to monitor jump heights and the speed of runs, as well as 9-axis motion tracking armbands to improve swimming technique.

Electronics ready to wear

At the end of 2016, the top wearable electronics device overall for MEMS motion sensors will be activity monitors. Already in big demand today, the device features a built-in accelerometer to monitor movement and provide feedback, such as for calorie consumption.

Pedometers will rank second, helping to determine the number of each steps a person takes and popular as an exercise measuring device; followed by smart watches and smart glasses as the next largest application. In the smart watch category, Apple is rumored to be launching an iWatch soon, and both Google and Samsung are also looking to enter the segment.

While all the pieces are in place for the wearable technology and mobile health market to prosper, the mass adoption of activity monitors and similar devices will depend on the success of companies to move to so-called true lifestyle products. The devices by that point will be fashionable, resemble jewelry being worn or remain inconspicuous, allowing the wearer to integrate the gadgets with normal clothing and other accessories. The products should also be easy to use, reliable and competitively priced in order to maximize penetration among consumers.

Growth of the wearable electronics and fitness monitoring market will, in turn, provide good revenue opportunities for MEMS motion sensor manufacturers.

The polarizer market is expected to grow at a CAGR of 6 percent until 2016 to $12 billion in 2013 and to $14 billion in 2016. In 2012, the market amounted to $11.2 billion, up 9 percent year on year, according to “Polarizer Market and Industry Trend Analysis” published by Displaybank, recently acquired by IHS Inc. Polarizers used for large size TFT-LCDs, such as TV, monitors, and laptops, made up 77 percent of the market, amounting to $8.6 billion, and this figure is expected to grow at a CAGR of 4 percent to $9.9 billion in 2016. However, the TFT-LCD segment will lose its share of the market, falling to 71 percent in 2016, as manufactures scale up their smartphones and other mobile devices and increase their volume. 

polarizer market TFT-LCD

The polarizer market can be characterized by the three powers: Nitto Denko, LG Chem, and Sumitomo. The biggest characteristic is that each company has different applications in which they excel at according to their own technical skills, competitiveness of securing component supplies, and production capacity. By major application, the LCD TV market has the largest share, with the manufacturing leaders being Nitto Denko (33 percent), Sumitomo (28 percent), and LG Chem (27 percent). These three companies combined make up 88 percent of the market for polarizers used in TVs. In the laptop segment that highly requires for thin panels, Sumitomo leads with 53 percent, with Cheil Industry and Nitto Denko taking the next two spots with 14 percent each. In the monitor segment, where prices matter, LG Chem leads with a 43 percent market share, and CMMT, Cheil Industry, and BQM are on its heels with 16 percent, 15 percent, and 11 percent, respectively. Polarizers for tablet PCs are getting the spotlight these days, and Nitto Denko is dominant in that segment with 62 percent, being the exclusive supplier to Apple for the iPad series. Next to Nitto Denko, LG Chem is the runner-up with a 24 percent share. 

Displaybank’s “Polarizer Market and Industry Trend Analysis” report analyzes the polarizer market forecast until 2016; production line status of polarizer maker; supply chain; and pricing trends. The report also analyzes polarizers’ sub-film market—TAC, PVA, PET protective film, release film, anti-reflective film, and replacement film—for a better understanding of the polarizer market where the competition for high value added film production has become more intense.

Consumers increasingly want to use their media tablets and smartphones to stream high-definition video to displays in their cars, a phenomenon that will help to nearly double the size of the market for semiconductors used in automotive wired and wireless network applications from 2011 to 2018.

Revenue in 2018 for semiconductors used for in-vehicle connectivity and networking is forecast to reach $841.8 million, up from $438.8 million in 2011, according to an IHS Automotive Infotainment Market Tracker Report from information and analytics provider IHS. The market this year is expected to rise to $585.4 million, up from $545.1 million last year. The segment takes a big jump to $663.4 million next year, followed by two years of revenue in the $700 million range and then clearing the $800 million mark in 2017, as shown in the figure below.

mobile video streaming drives demand for semiconductors in cars

“The need for audio and video data streaming inside motor vehicles is real and represents a significant growth opportunity for semiconductor suppliers,” said Luca DeAmbroggi, senior analyst for automotive infotainment at IHS. “Consumers are expressing a greater desire to watch content from mobile gadgets like handsets and tablets on vehicle displays including DVD players, rear-seat entertainment panels and navigation units. Meanwhile, original equipment manufacturers (OEM) of both cars and vehicle infotainment systems also are promoting such functionality for pure entertainment as well as for safety purposes, such as when vehicle displays show traffic.”

Other driving forces for semiconductor in-vehicle connectivity and networking include Advanced Driver Assistance Systems (ADAS) and safety applications, as well as headunit and entertainment systems embedded in the vehicle.

Heavy traffic for car video systems

The amount of video that can be streamed to the car’s display units could be extensive, requiring careful design of the entire video interface architecture to allow seamless transmission. Moreover, several considerations could affect the video link requirements for bandwidth and security, including digital content protection, the quality of the video and audio streams, and the real-time video-processing capabilities of equipment. Whether wired or wireless technology is chosen for in-car connectivity will depend on cost, long-term semiconductor support from suppliers, readiness for integration within the vehicle, and issues related to performance and quality.

Getting on the wireless superhighway

Features like high-definition video, cloud streaming and content sharing among multiple devices already are available in industry segments like home entertainment. Because of this, the same requirements are expected to drive the integration of such features in vehicle infotainment systems.

Among the high-definition wireless technologies now available or under development for vehicle infotainment, 802.11ad (WiGig) appears to be the most suitable solution.

The 802.11ad technology claims a throughput of approximately 7 gigabytes per second compared to Wi-Fi speeds of 100 megabytes per second. It is free from license fees, and can transmit data directly over wireless HDMI, a commonly used interface for high definition.

Already, Japan’s Panasonic has plans to embed a WiGig module on an SD memory card for use in cars by the middle of this year. And while its coverage of 1 to 3 meters is considered by some to be short and tantamount to a physical drawback, that range is enough in most commercial vehicles for video and audio transmission between passengers in a car to their display unit of choice.

A variant of the 801.11ad technology also exists in the form of 801.11ac, which has a lower data transmission rate of 1 gigabyte per second. San Diego-based Qualcomm is among the semiconductor suppliers preparing such a solution for vehicle use, but the application is not expected before 2015.

Other wireless HD technologies for vehicle infotainment systems include WirelessHD, WHDI, WiDi/Miracast and Multistream Wi-Fi.

Wired technologies plug in to automotive market

Several indicators suggest that an automotive version of Ethernet might soon be available, backed by an increase in bandwidth and safety application requirements, and supported by many key auto players that believe Ethernet offers several benefits. Among wired technologies for in-car connectivity, Ethernet AVB can be adapted to fi t tough automotive wiring requirements, with BMW targeting its first pilot vehicles with Ethernet by 2013-14 and a complete Ethernet-cabled vehicle by 2020.

A second wired technology revolves around dedicated network architectures such as Media-Oriented Systems Transport (MOST) in order to achieve high data-rate throughput and reliable performance for multimedia applications. MOST can be found in high-end vehicle brands, but the MOST bus has limitations that could jeopardize its ability to deliver adequate performance for future content-transmission systems in vehicle infotainment devices.

Questions also exist about whether MOST and Ethernet can coexist, and in what time frame, or if Ethernet will instead be predominant in the midterm due to its superior cost position over MOST.

Other wired technologies expected to compete for a place in the vehicle are LVDS, APIX, HDMI and MHL. In particular, HDMI and MHL are expected to be present soon in cars of the future, following the momentum that both technologies currently enjoy in smartphones and other handheld consumer applications.

Wired or wireless?

Wireless technologies provide obvious ease of transfer for consumers by dispensing with physical wiring altogether, but drawbacks exist like error rates in higher-bit transmissions, as well as sensitivity to interference that might make wireless technologies unsuitable for safety-critical vehicle applications.

Meanwhile, wired technologies like Ethernet seem ready for deployment, but stringent automotive requirements that target high electromagnetic interference for long wiring solutions—possibly running along the entire vehicle—must also be taken into consideration.

The consensus seems to be that high-definition wireless deployment in automobiles may not be feasible in the short term due to limited supplier engagement, together with currently incomplete specifications and standards.

Overall, it will be up to the consumer electronics field and its influence on the automotive sector to make high-definition video streaming happen, further boosting passenger flexibility to interact with a vehicle’s infotainment system, IHS Automotive believes.

Stung by plunging sales in Japan and declining demand in North America and Western Europe, global television shipments in 2012 fell, marking a major inflection point that will have a lasting impact on the market, according to an IHS iSuppli Worldwide Television Market Tracker Report from the IHS TV Systems Intelligence Service at information and analytics provider IHS.

Global shipments of all kinds of televisions in 2012 amounted to 238.5 million units, down 6.3 percent from 254.6 million in 2011. Shipments aren’t expected to rise back to the 2011 level until 2015, when they will amount to 253.1 million units.

Global TV market won't recover until 2015

“Television shipments in 2012 declined for the first time for more than a decade, sounding the coda for the flat-panel replacement wave that deluged the business throughout the 2000s,” said Tom Morrod, TV systems analyst at IHS. “This event marked a fundamental change in the growth trajectory of the market, with flat or minimal increases in shipments expected in the coming years—a sharp contrast to the double-digit increases seen prior to 2010. While some specific events contributed to the downturn of 2012, such as the fall of sales to the Japanese market, the decline reflects a fundamental slowdown in the television market, with liquid crystal display television (LCD TV) shipments falling for the first time ever. Although television shipments will stabilize in 2013 and growth will return in 2014, developed markets have become saturated with flat-panel televisions.”

Television market hits a wall in 2012

The TV market had been undergoing a slowdown prior to 2012, with shipments rising by 11.6 percent in 2010 and decelerating to 1 percent in 2011. By the beginning of this decade, most consumers in developed regions already had replaced their old cathode-ray tube (CRT) sets with flat-panel models, and many buyers in emerging economies had also made the switch. Combined with economic factors, and with issues related to government subsidies and the analog transition, the slowdown of the flat-panel replacement trend contributed to the major downturn in 2012.

The North American and Western European regions in 2012 both experienced significant shipment declines. Meanwhile, growth stalled in Latin America, the Middle East, Africa and the Asia-Pacific region. Eastern Europe and China were the only regions to continue to enjoy rising shipments

The biggest reduction occurred in Japan, where shipments fell by 13.5 million units in 2012, accounting for the vast majority of the global decline of 16.0 million.

Point shaving

The decline in Japan was due to the end of the country’s “eco-points” subsidy program. Starting in mid-2009, the program gave consumers points for buying energy-efficient products—such as light-emitting diode (LED)-backlit LCD TVs. These points could then be redeemed to buy other items.

Between 2009 and 2011, eco-points generated an additional 25 million television sets sold in the Japanese market. With the revocation of this artificial stimulus, demand declined in 2012, and the Japanese TV market will continue to be severely affected for the next five years.

Regional woes

The decline in Western Europe was predominantly due to the economic situation, combined with the analog switch-off. Markets such as France, Italy and Spain have experienced severe declines following analog broadcast switch-offs in 2010 and 2011. At the same time, there were declines in the Netherlands, the United Kingdom, Portugal and Greece because of financial challenges.

There was, however, some growth generated by the more prosperous Central European nations, with Germany in particular still continuing to show impressive growth.

In North America, the decline was caused by a mixture of economic factors and by the fact that consumers had increased their demand in 2010 and 2011. By 2012, however, buyers had expended their disposable income for television purchases.

Meanwhile, the Asia-Pacific market stalled because of lower growth than expected in India, together with declining sales in established markets such as Australia.

The Middle East and Africa continued their overall growth, but strife in certain countries—particularly Syria—had a negative impact on television shipments.

Television market rebounds in 2014

In 2013, the global TV market will stabilize, with shipments remaining flat compared to 2012, as economic conditions even out. Shipments will rise by a scant 0.3 percent for the year.

However, shipments will return to growth in 2014 with a 2.8 percent increase. The Football World Cup, to be held in Brazil, will boost Latin America sales, while China is expected to continue to prosper.

By 2017, global television shipments will rise to 270.5 million units for a number of reasons—as Chinese manufacturers flood the Asia-Pacific markets with new models; as Japan, North America and Western Europe continue to recover; and as ultra-high-definition (UHD) and organic light-emitting diode (OLED) TV uptake becomes more affordable.

LCDs fall for first time

The LCD TV market fell for the first time ever on an annual basis in 2012, with shipments declining to 209.8 million units, down slightly from 211.3 million in 2011. However, shipments are expected to return to growth and continue expanding through 2017 as new technologies like Smart TV and UHD increases.

Plasma TV shipments fell to 13.1 million units in 2012, down from 17.9 million 2011. This is partly due to Panasonic significantly reducing its supply of plasma televisions, and partly due to large-sized LCD displays becoming increasingly cost effective. North America continues to be a stronghold for plasma, as does China, but all regions experienced an annual decline in shipments. By 2017, it is anticipated that Plasma will be a niche product, and that the market will have almost completely transitioned to LCD TV and to OLED.

CRT-TV shipments slid to 15.5 million, down nearly 40 percent from 25.2 million in 2011. Global CRT shipments will cease by 2016, IHS expects.

MEMS pressure sensor is one of the very first MEMS components appearing in the microsystem world. The technologies are quite mature and the market is big and expected to grow from $1.9B in 2012 to $3B in 2018.

“MEMS pressure sensor for consumer applications, especially for smartphones and tablets, is following the model of accelerometers and gyroscopes. Adoption of this model will help the MEMS pressure sensor market to boom again! We believe, this huge opportunity will result in the global volume of the MEMS pressure sensor market hitting 2.8 billion units by 2018” said Wenbin Ding, technology and market analyst at Yole Développement.”Consumer pressure sensor will represent 1.7 billion units and will overtake automotive as the market leader in volume.”

Even though the consumer application has a much lower ASP than other applications, this promising segment will bring more than 8% CAGR to the global MEMS pressure sensor market.

In their report, Yole Développement provides a global overview of the current MEMS pressure sensor technologies, market and competitive landscape. The covered industries in the MEMS pressure sensor 2013 report are automotive, industrial, medical applications, consumer electronics and high-end (aeronautic, military, defense) applications.

Automotive applications are still dominating the MEMS pressure sensor market. TPMS, MAP and BAP will be the biggest sub applications in this field. Automotive, medical, industrial and high-end markets are growing 4% to 7% however the consumer market is growing 25% in value (38% in volume) because of new opportunities in smartphones and tablets.

MEMS pressure sensor finds new applications in each domain, for example: in-cylinder pressure sensing for consumer applications.

MEMS technologies are still gaining market share compared to other classic technologies

MEMS pressure sensors are showing advantages compared to other current technologies, such as ceramic thick-film, ceramic capacitive and thin-film technologies. Yole Développement has carried out an in-depth analysis of the applicable range of technologies and classified them based on the requirements of the major applications.

Technologies like thin-film are still needed for use in harsh environments, particularly with high temperatures and corrosive medias. MEMS pressure sensor manufacturers are also working on components which could be used in these environments. The status of SiC MEMS pressure sensor development is also described in the report.

Yole Développement analysis provides an overview of other existing pressure sensor technologies. Comparisons of different MEMS technologies are done in order to better understand the positioning of MEMS pressure sensors in the global market.

Fragmented market with more than 50 players involved

Since the MEMS pressure sensor market is huge, Yole Développement is not surprised to see a large number of players in this industry. It is one of the most fragmented markets.

More than 50 worldwide players are involved. The top 5 players (Bosch, Denso, Sensata, GE Sensing and Freescale) represent about 50% of the total market. Automotive, medical, industrial, and high-end markets already have their mature leaders and smaller companies following. The consumer electronics market is still emerging with some conventional MEMS sensor companies interested.

Yole’s report also includes a focus on the competition in the automotive market. Lots of companies are targeting this industry. Bosch has always dominated this sector. The supply chain of the automotive industry is complicated with different types of players: Car Manufacturers, Tier1 Automotive Part & Systems Suppliers (related to Pressure Sensors), Full Package Sensors Specialists and MEMS & Semiconductor Specialists. This section of the report includes a detailed description at each level of the value chain and gives an in-depth supply chain analysis for the automotive market.

With new opportunities appearing in consumer electronics, new comers from the USA and China are targeting this segment. Yole Développement also follows the activities of some new Chinese challengers. Local Chinese companies are making an effort to try and fulfill the huge domestic demand in automotive and consumer applications.

Volunteers sponsored by SPIE, the international society for optics and photonics, were in Washington, D.C., last week to thank Congressional representatives for recent support for photonics R&D and to urge future support for in several key areas vital to economic growth and scientific progress. They were among more than 250 scientists, engineers, and business leaders visiting Capitol Hill March 12-13 for a Congressional Visits Day (CVD) sponsored by the Science-Engineering-Technology (SET) Work Group.

  • SPIE volunteers focused primarily on three messages identified by the SPIE Engineering, Science, and Technology Policy (ESTeP):
  • Support for a National Photonics Initiative (NPI) being forwarded by a coalition of professional societies including SPIE, LIA (Laser Institute of America), IEEE Photonics Society, OSA (The Optical Society), and the American Physical Society.
  • Overhaul of export controls.
  • Eliminating restrictions on government-employee travel to scientific conferences.

Members and staff were generally in agreement that now is a critical time for the U.S. to be prioritizing investments in science and innovation and that while control of spending is important, funding for R&D and for STEM education are important ways to grow the economy.

"I appreciate the preparations by SPIE to support those of us working in photonics to succinctly bring our message to our representatives in Congress,” said Jim McNally, director of operations at Applied Technology Associates. “The background materials and coaching tips provided really help us to clearly and concisely articulate the critical priorities to support our nation’s competiveness and innovation edge. We were able to have very productive discussions emphasizing the urgency for a National Photonics Initiative."

Ben Franta, a student at Harvard University, called the event “an eye-opening experience.”

“In the same way that being a scientist or engineer is very different from what most other people imagine it to be, our government operates in a way that’s different from what we might expect by watching or reading the news,” he said.

Franta said the CVD program was “a valuable opportunity to engage with our lawmakers in a way that can lead to real results. To me, the fact that SPIE makes such great use of this opportunity — both to communicate with Congress and to educate students like me — shows a forward-looking approach to promoting technologies in optics and photonics in this country and throughout the world."

An evening reception provided an informal opportunity for CVD participants to talk with Congressional members and staff, and included an exhibition in which company representatives demonstrated products based on discoveries and innovations resulting from federal R&D funding. SPIE co-sponsored a booth highlighting the recent National Academies report, “Optics and Photonics: Essential Technologies for our Nation,” and raising awareness of efforts to create the NPI.

At the reception, the SET George E. Brown Award was presented to Representatives Mike Honda (D-California) and Richard Hanna (R-New York), to recognize their outstanding efforts to advance and promote science, engineering, and technology on Capitol Hill.

More than 50 percent of all industrial innovation and growth in the United States since World War II can be attributed to advances pioneered through scientific research, with publicly funded R&D the vital foundation for today’s scientific and technological progress.

Technology transfer from academic research adds billions of dollars to the economy each year and supports hundreds of thousands of jobs.

SPIE is the international society for optics and photonics, a not-for-profit organization founded in 1955 to advance light-based technologies. The Society serves nearly 225,000 constituents from approximately 150 countries, offering conferences, continuing education, books, journals, and a digital library in support of interdisciplinary information exchange, professional networking, and patent precedent. SPIE provided over $3.2 million in support of education and outreach programs in 2012.

Samsung Electronics catapulted to the top of the optoelectronics supplier ranking in 2012 from 12th place in 2011 after it gained full ownership of Samsung LED, a 50-50 joint venture in light-emitting diodes that was created in 2009 between Samsung Electronics and affiliate Samsung Electro-Mechanics.  In April 2012, the venture was absorbed into Samsung Electronics to strengthen and expand the use of high-brightness LEDs in displays, LCD TVs, and new solid-state lighting products. This transfer increased Samsung’s optoelectronics sales by 223% to $2.5 billion in 2012 compared to $780 million in 2011, according to the new 2013 edition of IC Insights’ O-S-D Report—A Market Analysis and Forecast for Optoelectronics, Sensors/Actuators, and Discretes.

The LED operation added $1.5 billion to Samsung’s total revenues in 2012, based on the O-S-D supplier rankings in the new 350-page report, which becomes available in March 2013.  The rest of Samsung’s optoelectronics sales come from CMOS image sensors, which generated $975 million in 2012—a 25% increase from 2011.  The 2013 O-S-D Report shows Samsung as the second-largest supplier of CMOS image sensors in 2012, positioned between top-ranked OmniVision and third-place Sony.  The 2013 O-S-D Report provides top 10 supplier rankings for the individual optoelectronics, sensors/actuators, and discrete semiconductor markets in addition to an overall top 30 list of companies selling O-S-D products in 2012.

Samsung’s huge increase in optoelectronics sales vaulted it to first place in IC Insights’ top 30 O-S-D ranking for 2012 from 20th in 2011. High-brightness white LED and blue-laser pioneer Nichia in Japan moved up to second place in the O-S-D ranking from fourth place in 2011 with an 11% increase in optoelectronics sales in 2012.  In the 2012 O-S-D ranking, Toshiba and ST fell to third and fourth, respectively, due to steep sales declines in CMOS image sensors and double-digit drops in discretes.  Toshiba and ST had been the No. 1 and No. 2 suppliers in the O-S-D marketplace since the middle of the last decade.

top five O-S-D suppliers 2012

Suppliers of high-brightness LEDs generally moved higher in the overall O-S-D ranking in 2012 due to strong sales growth in lamp devices used for solid-state lighting systems.  In addition to Samsung and Nichia moving up to the No. 1 and 2 positions in O-S-D, six other LED makers climbed higher in the top 30 ranking (Sharp, Osram, Philips, LG Innotek, Seoul Semiconductor, and Toyoda Gosei). U.S.-based Cree, which makes LEDs and radio-frequency/microwave power transistors, was unchanged in the top 30 O-S-D ranking at 17th place in 2012.

Among the significant changes in the O-S-D supplier rankings was ST climbing to first place in the sensors/actuators market in 2012 from fourth in 2011.  ST’s sensor sales grew 19% in 2012 to $791 million.  Hewlett-Packard fell to fourth place in sensors/actuators last year from the top spot in 2011 due to a 10% decline in sales of HP’s inkjet-printer actuators in 2012.  In discrete semiconductors, Toshiba held on to its top position despite a 12% decline in discretes sales in 2012.

Growth in the last quarter of 2012 pulled GaAs device revenue to a slight gain for 2012. The Strategy Analytics GaAs and Compound Semiconductor Technologies Service (GaAs) Insight, “GaAs Device Industry Closes up in 2012,” explores GaAs device revenue growth and trends. It also presents the revenue performance of leading GaAs device manufacturers and foundries like RFMD, Skyworks, TriQuint Semiconductor, Avago Technologies and WIN Semiconductors.

The Insight concludes that handset growth, particularly smartphones, is responsible for most of the revenue growth in the GaAs device market. As data consumption continues to soar, handsets will remain the primary driver for GaAs device growth. In the short-term, revenue in the GaAs device market is expected to exceed the historical average. In the longer term, the Insight points out that recent developments in CMOS multi-mode, multi-band handset PAs from Qualcomm and others will pose a significant threat to the GaAs device market.

“Smartphones continue to grow faster than the overall handset market. This growth, coupled with more bands and increased GaAs device content remains the single biggest driver for revenue growth in the GaAs device market,” noted Eric Higham, Director of the Strategy Analytics GaAs and Compound Semiconductor Technologies Service (GaAs). “In the short-term, we anticipate this combination of factors will drive GaAs device revenue growth above historical averages”.

Asif Anwar, director, Strategy Analytics Strategic Technologies Practice, added, “Strong growth in the last quarter of 2012 provides a good starting point for the GaAs industry in 2013. However, recent announcements about CMOS multi-mode, multi-band PAs and envelope tracking will threaten the GaAs device market and these developments will be monitored closely.”

 

Intel semiconductor market inventory declineAfter reaching a worrisome high in the third quarter of 2012, global semiconductor inventories held by chip suppliers fell at a surprisingly fast rate in the fourth quarter, led by dramatic reductions for market leader Intel Corp.

Days of Inventory (DOI) for semiconductor suppliers in the fourth quarter declined by 5 percent compared to the third quarter—higher than the 1.5% initially forecast, according to an IHS iSuppli Supply Chain Inventory Market Brief from information and analytics provider IHS. Meanwhile, inventory value in dollar terms fell almost 5%—larger than the originally projected 3%.

“Semiconductor companies reduced their inventories at a faster-than-expected rate in the fourth quarter as they moved to adjust to weakening demand,” said Sharon Stiefel, analyst for semiconductor market intelligence at IHS. “Many chip suppliers demonstrated great agility in their reactions to the drop in demand. No. 1 semiconductor supplier Intel Corp. was the most aggressive, cutting its stockpiles by more than half a billion dollars—the largest decrease on a dollar basis of any chipmaker.”

Cutting inventories down to size

Among semiconductor suppliers that reduced their inventory levels between the third and fourth quarters last year, the percentage of decrease ranged from 5% to 25%, resulting in chip stockpile value of $60 million to nearly $600 million being shaved off in the companies affected, as shown in the attached table. And while inventory climbed in some companies during the same period, the spread was smaller, with the value of the increase worth slightly north of $40 million to approximately $250 million.

In the table and numbers cited in this release, memory suppliers are excluded from DOI and inventory value calculations because they report results much later than any other group in the semiconductor supply chain.

The rest of the companies covered effectively straddle the breadth of the semiconductor chain, including those engaged in the wireless, automotive, data processing and industrial segments.

Intel leads inventory liquidation

The largest decrease in inventory value during the fourth quarter belonged to Intel, down $585 million from the third quarter, representing an 11% reduction. The company made aggressive moves to cut stockpiles. It also reduced production as it migrated to a new process technology: 14-nanometer lithography.

AMD and STMicroelectronics also experienced large inventory declines of $182 million and $131 million, respectively, or 25% and 9%. In the case of AMD, inventory shrank for its microprocessors as a result of an amended wafer supply agreement with GlobalFoundries for reduced stockpiles. For its part, STMicroelectronics cut utilization rates after exiting its money-losing joint venture with Ericsson.

Two other chip suppliers had notable inventory drawdowns: Texas Instruments, down $91 million or 5%, due to weak end-market demand for its chips; and ON Semiconductor, down $63 million or 10%, as it burned bridge inventory and coped with reduced revenue.

Among inventory gainers, most faulted low seasonality and an uncertain global economy for a rise in chip stockpiles. Companies in this group included MediaTek, up $58 million or 14%; NXP Semiconductors, up $44 million or 7%; and Infineon Technologies, up $43 million or 6%.

Qualcomm bucks the trend

The one exception among gainers that could boast of a strong performance that was linked to an increase in chip inventory levels was Qualcomm, up $247 million or 24%. Given the strong market acceptance of its wireless chips in products like the Apple iPhone and iPad, Qualcomm is ramping up production and inventories in order to meet demand.

Semiconductor suppliers will be positioning their inventories in the first quarter this year to prepare for anticipated demand. Inventories are expected to rise in response to slightly positive global economic indicators as well as favorable semiconductor and end-equipment forecasts—unless major swings occur once more from the larger suppliers that could then end up skewing the industry.

Driven by the government’s focus on the futuristic Internet of Things – embedding connectivity and intelligence in everyday objects – and a surge in private sector growth, China’s RFID card market will nearly double in value and more than double in units in 2017, according to Lux Research.

The RFID card/tag market volume will grow to 2.11 billion units, from 894 million in 2012, reflecting a compound annual growth rate (CAGR) of 19%. In revenue terms, the market will grow to $807 million in 2017, from $454 million in 2012, at a CAGR of 12%.

“So far, government applications account for 22% of the volume and 34% of the revenue, but that is about to change quickly,” said Richard Jun Li, Lux Research Director and the lead author of the report titled, “Identifying Growth and Threat in China’s Emerging RFID Ecosystem.”

“With the rise of market-driven applications, there are opportunities for multinationals to leverage China’s RFID growth – speed and identification of the best local partnerships will be critical,” he added.

Lux Research analysts studied the Chinese RFID market and government policy to evaluate growth prospects for the industry. Among their findings:

  • Consumer market is the strongest. Driven mainly by the adoption of RFID tags for anti-counterfeiting, consumer applications will grow the fastest in volume terms – at a CAGR of 38% until 2017. Industrial applications will grow at a 25% rate, while electronic toll collection will be a fast-growing subsector.
  • Local OEM players emerging. The rise of Chinese original equipment manufacturer (OEM) suppliers for RFID cards/tags is creating a new industry dynamic. Currently, the top 15 suppliers – led by China Card Group and Tatwah Smartech – account for 57% of the Chinese market and are poised for further gains.
  • Focus is on fast-growing UHF market. Chinese companies do not have as strong a position in superior ultra-high frequency (UHF) chips – which will grow dramatically to become a $236 million market in 2017. However, the clock is ticking for multinational suppliers, as the Chinese government is putting significant resources into developing homemade UHF chips.

The report, titled “Identifying Growth and Threat in China’s Emerging RFID Ecosystem,” is part of the Lux Research China Innovation Intelligence service.

internet of things
By SRI Consulting Business Intelligence/National Intelligence Council [Public domain or Public domain], via Wikimedia Commons