Even in these trouble economic times there are some industries that just maintain their growth, seemingly forever. Semiconductors, those tiny little electronic wonders we find in everything from radios to smartphones and LED lights, are ever increasingly in demand. Just as technologies begin to touch everything in our lives, so does the need for advanced production of these little wonders increase.
So, here we have the perfect economics formula for a super successful business niche, massive demand leads to diminished supply, leads to ramped up research and production. Just so you have an idea of the kind of growth pontential this segment has, Intel increased their R&D spend by some 27% last year, and TSMC came in spending just over 23%, with Samsung spending some $2.8 billion on R&D.
On the investment and revenue site of things, the infographic below from Farnell semiconductors reveals the win side, even despite the down-slope in PC and other electronics sales this Summer.
Tied inextricably to the gadgets we love and buy, of course Summer 2012 has not been the best season for revenue growth, Intel cut back their revenue expectations by almost $1 billion because of slow PC and other device sales. Other manufacturers followed suit, with a few actually showing higher than projected revenues in some cases showing double digit growth.
Bad investment quarters is not really what industry potential is about though, now is it? As electronics permeate our lives more an more, it seems certain the need for semiconductors is not likely to go down, not for the long haul. For Intel and the other leaders in the industry, and for their smaller competitors, maybe the trend to watch should be market consolidation?
Photo credit: Semiconductor image courtesy nikkytok – Fotolia.com
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