When the global electronics industry is humming along and all geographies are growing (when was the last time that happened?) it doesn’t seem to matter much where companies are headquartered. But when some regions are more economically challenged than others, location begins to make a difference.
For example, IHS's recent examination of the global semiconductor market notes that European and Japanese chip companies were hit hardest by a dismal second quarter:
“Amid rising economic concerns—including the Eurozone crisis, slowing manufacturing growth in China and stubbornly highly unemployment in the United States—second-quarter growth for the global semiconductor industry was highly disappointing,” said Dale Ford, senior director of electronics and semiconductor research at IHS. “Approximately two-thirds of the world’s semiconductor suppliers saw their revenues decline in the second quarter compared to the same period in 2011. This weak performance bodes ill for the semiconductor industry’s growth prospects for the entire year.”
Second-quarter global semiconductor revenues fell by 3 percent year-over-year, IHS reports, to $75.2 billion. European chip companies were hit hardest: IHS says revenues there fell by 8.3 percent year-over-year. In Japan, chip sales fell by 7.5 percent from the first quarter of 2012.
European chip suppliers STMicroelectronics and Infineon Technologies suffered revenue declines of 16.4 percent and 12.9 percent, respectively, according to the research firm. In Japan, the steepest declines were felt by Toshiba Corp., Renesas Electronics Corp., Fujitsu Semiconductor Ltd., and Mitsubishi.
But other regions don’t have a lot to feel smug about. In the Americas, IHS identified only two companies that had outstanding growth: Qualcomm, with 23.7 percent growth, and Broadcom, at 10.0 percent.
South Korea’s Samsung grew by 5.8 percent, boosted primarily by its acquisition of Samsung Electro-Mechanics, IHS reports.
@Bolaji: I agree on that, it auto-explains why I told about; furthermore, I believe that sector could act as a new beginning for the other sectors, considering for instance, smart cities or green need absolutely electronics chip all over.
"Is Japan still recovering from natural calamity disaster? The trend seems quite baffling as except Japan there is growth everywhere"
@Himanshugupta: Even Thailand suffered natural disaster in the form of severe floods but it's doing pretty well. I don't think Japan's performance has to do with the natural calamity that took place two years back.
I'm not surprised by IHS report findings on the state of business activities and growth within electronic industry in Europe and Japan. A varied level of economic factors is at play: the on-going economic crisis in Europe and global economic situation in general are bound to permeate this sector too. However, Japan on the other hand still struggles to show significant growth ever since its economic malaise. I hope things pick up soon enough in this market segment.
Is Japan still recovering from natural calamity disaster? The trend seems quite baffling as except Japan there is growth everywhere. Even EU, where the situation is bad, has shown positive signs.
I wonder what it is that marks such substantial differences in the numbers been Asia Pacific and Japan. On papers both of these markets seem equal and are also faced with similar problems. Why is it that Japan has plunged so low..
Quite often, Japanese and European products have very nich market and designer may like to quickly employ it. But, both of them also lags in marketing products worldwide. They shloud take help of Americal marketing channel to enhance their market share.
I am feeling that sector could, potentially, get back in a positive trend, quite soon. If we think, just for a moment, to the coming IOT (Internet of Things) and the need to deploy abroad chips and sensors, we can conclude the market will probably face sooner or later a new boost.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Archived Dialogues
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Euro-Crisis: What It Means for High-Tech Firms Join EBN Editor in Chief Bolaji Ojo and Contributing Editor Jennifer Baljko on Thursday, July 12, at 10:00 a.m. EDT for a Live Chat on high-tech and Europe's economic difficulties.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.
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