Power Management Chip Market to Contract by 17.4 Percent in 2009
Despite Green Initiatives, Economic Downturn
The economy is expected to trump ecology in the power-management semiconductor market in 2009, as the global industry is expected to suffer one the most severe declines in its history, according to iSuppli Corp.
Global revenue from shipments of power-management semiconductors will fall by 17.4 percent in 2009 to $21.8 billion, down from $26.4 billion in 2007. This decline will set the power-management market back to the 2004 level, when revenue amounted to $21.9 billion.
Power-management semiconductors are a critical part of all electronic products, from mobile handsets to SUVs. With the electronics industry increasingly focused on green initiatives and energy conservation, the demand for more and better power management has been rising. Due to these factors, electronic equipment and semiconductor makers have focused their attention on managing power at many different levels, from software, to firmware, to hardware.
However, current macroeconomic and electronic industry conditions are putting a damper on the market. The main reasons for the 2009 drop include a decline in consumer-electronics equipment production, high inventory levels and decreasing prices for electronic equipment and power-management devices.
This downturn is expected to have a long-term impact, with revenue not recovering to the 2008 level until 2012. Revenue growth likely won’t return until the third quarter, after the industry burns off its excess inventories. This will cause prices to stabilize and orders to rise.
During the period of 2009 to 2012, many businesses and product lines will have to shrink in order to adjust to the modest electronic equipment demand growth expected during the next few years. Power-management semiconductor products with specialized functionality will be less likely to disappear while commodity products will consolidate or completely evaporate.
While many applications will decrease their demand for power-management chips in the coming years, some still will manage to expand in 2009 and beyond. Areas defying the downturn mainly will be new, emerging markets, including the solar power industry. Solar-power industry demand for power-management semiconductors will experience 36 percent revenue growth during the next five years.
While the downturn will represent a major blow to the power-management market that enjoyed at least five years of consecutive growth before 2008, there may be some positive outcomes for the market.
Power-management semiconductor suppliers that manage to survive the recession will enjoy the benefits of excellent growth after growth returns. The elimination of some market players will reduce the level of competition in the market, improving conditions for the remaining suppliers. Finally, new technologies and startups will appear with specialized, state-of-the-art Intellectual Property (IP).
The economy is expected to trump ecology in the power-management semiconductor market in 2009, as the global industry is expected to suffer one the most severe declines in its history, according to iSuppli Corp.
Global revenue from shipments of power-management semiconductors will fall by 17.4 percent in 2009 to $21.8 billion, down from $26.4 billion in 2007. This decline will set the power-management market back to the 2004 level, when revenue amounted to $21.9 billion.
Power-management semiconductors are a critical part of all electronic products, from mobile handsets to SUVs. With the electronics industry increasingly focused on green initiatives and energy conservation, the demand for more and better power management has been rising. Due to these factors, electronic equipment and semiconductor makers have focused their attention on managing power at many different levels, from software, to firmware, to hardware.
However, current macroeconomic and electronic industry conditions are putting a damper on the market. The main reasons for the 2009 drop include a decline in consumer-electronics equipment production, high inventory levels and decreasing prices for electronic equipment and power-management devices.
This downturn is expected to have a long-term impact, with revenue not recovering to the 2008 level until 2012. Revenue growth likely won’t return until the third quarter, after the industry burns off its excess inventories. This will cause prices to stabilize and orders to rise.
During the period of 2009 to 2012, many businesses and product lines will have to shrink in order to adjust to the modest electronic equipment demand growth expected during the next few years. Power-management semiconductor products with specialized functionality will be less likely to disappear while commodity products will consolidate or completely evaporate.
While many applications will decrease their demand for power-management chips in the coming years, some still will manage to expand in 2009 and beyond. Areas defying the downturn mainly will be new, emerging markets, including the solar power industry. Solar-power industry demand for power-management semiconductors will experience 36 percent revenue growth during the next five years.
While the downturn will represent a major blow to the power-management market that enjoyed at least five years of consecutive growth before 2008, there may be some positive outcomes for the market.
Power-management semiconductor suppliers that manage to survive the recession will enjoy the benefits of excellent growth after growth returns. The elimination of some market players will reduce the level of competition in the market, improving conditions for the remaining suppliers. Finally, new technologies and startups will appear with specialized, state-of-the-art Intellectual Property (IP).
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