Semi Conductor Industry

Semiconductor industry refers to the aggregate collection of companies that are engaged in the fabrication and designing of semi conductor devices. The industry came into around 1960 once fabrication of semiconductors was proven to be a viable business.

Since then, it has grown to be a $249 billion dollar industry.  On a global scope, the industry is dominated by Japan, South Korea, Singapore, European Union and the United States America. The industry in the US faces major challenges in development as a result of government regulation. This is because the US government controls use of certain types of conductors because of their potential dual use in military applications and regulates exports.

On a broad scope, the semiconductor industry is comprised of 4 major product categories which include the following:

• Memory-There are memory chips which are used to act as temporary storehouses for data and which pass information from and to the computer devices brains. Consolidation of the memory market continues driving prices down so that only a few giants such as Samsung, NEC and Toshiba are able to stay in the game
• Complex SOC-‘System on a Chip’ is about creation of integrated circuit chips with entire system capability on it. The markets flourishes and revolves around the increasing demand for consumer products that combine lower prices and new features
• Microprocessors-They are the central processing units that contain basic logic to perform tasks. The domination of Intel in the microprocessor segment has forced almost every other competitor out of the market.
• Commodity Integrated Circuit-This is at times known as ‘standard chips’ and they are produced in large batches for purposes of routine processing. It is dominated by large manufacturers of chips that are of Asian origin. The segment offers profit margins that are razor thin as such, only the biggest semiconductor companies can compete in the segment.

The semi conductor industry features a couple of distinct characteristics that are uniquely positioned in the economy as well as the competitive, global arena. Some of these include the following:

• The industry is a technology enabler- it is widely recognized as the key economic growth driver because of its role as a technology and multiplier enabler for the entire whole electronics value chain.
• Continued growth though in a cyclical pattern with high level of volatility
• Need for high degrees of innovation and flexibility for purposes of constantly adjusting to rapid change in the marker. Most of the products that have embedded semiconductor devices have a short lifecycle. However, the rate of constant improvement in semi conductor industry makes price performance staggering.

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