While other industries in 2010 struggled in following economic downturn, the semiconductor industry had just about the best year in the history of the industry, with revenues up over 30 percent, according to Jodi Shelton, co-founder of the Global Semiconductor Association (GSA (News - Alert)).
“That was just beyond even our wildest expectations for 2010,” Shelton told TMCnet of the revenue statistics. “... You had a lot of really positive things happening at the same time.”
In 2010, the semiconductor industry benefitted from geographical growth into new markets, the innovation surrounding electronics, the burgeoning popularity of electronics, the expansion of the middle classes, the emergence of new products even in saturated markets and an increase in the number of automobile electronics.
Whether 2011 will be as auspicious as 2010 remains to be determined, however, according to GSA officials.
Shelton co-founded GSA in 1994 and, since its inception, the association has attracted more than 500 members in more than 25 countries to date. Originally, the organization was founded as the Fabless Semiconductor Association and the goal at that time was to increase the overall image of the fabless business model and ensure that there was a consistent supply chain and eco system for these companies.
“Over time, the fabless business model became the norm and the accepted business model and, therefore, our goals changed and it became more about just trying to create a more efficient ecosystem and supply chain and try to reduce redundancies,” Shelton said. “And, that’s what we are doing still today.”
Currently the association is analyzing how the semiconductor industry will fare, particularly after such a stellar 2010.
“When you come off of a year of 30 percent revenue growth, if you can have a year that has any growth the following year then you are in good shape,” Shelton said. “Before March 11, which was the day of the earthquake in Japan, we felt that revenue growth could be as high as 10 percent.”
Now the future of the industry is a bit more uncertain, according to Shelton.
“I think that all of us are a little unsure of what the impact of Japan is going to be on the entire supply chain and whether that is going to moderate growth,” she said. “There are some people that believe that because you are going to have shortages, there is going to be an increase in pricing, so there might be revenue growth because of that but either way it has caused a lot of turmoil in the supply chain.”
Among concerns about how the state of Japan will affect the industry, the semiconductor industry will face other challenges in 2011 including geopolitical challenges that all businesses currently face, the Middle East issues and the ongoing debt crisis in Europe.
Despite the challenges, GSA and Shelton are optimistic that the semiconductor industry will continue to make strides in this next decade.
“All these things always worry us, but I don’t think the semiconductor industry is facing anything that all companies are not facing right now,” she said.