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The Global Consumer - Transforming the Semiconductor Industry

Published: 9/12/2008 11:40:34 AM  Come From: Economic  Click Count:862

 

       Our industry has experienced a profound transformation. In the 1960's, when the semiconductor industry first emerged from anonymity, the key driver of the industry was the government and aerospace sector. Major applications were the Apollo space program and weapons systems such as the Minute Man intercontinental ballistic missile.

      With the end of the Apollo program and the cuts in the defense budget after the Vietnam War, the key driver of the industry shifted in the early 1970's to the corporate Information Technology (IT) sector. The introduction of the IBM 360 (the first use of integrated circuits in a computer) and the mini-computer initiated the first IT boom in the late 1960's and early 1970's.

      Corporate IT continued to dominate spending in the 1980's. With the introduction of the PC and Local Area Networks (LAN's), corporate IT grew to 60 percent of demand, while the government/aerospace sector declined to less than 10 percent of demand. Consumer products continued to gain in importance with the introduction of new products such as video games and the VCR.

      In the 1990's, consumers emerged as the primary force driving semiconductor sales. If "consumer products" are defined as products purchased by individual consumers with their own money, consumers now drive roughly half of all semiconductor sales. With the Internet boom and declining PC prices, individuals now consume more than 30 percent of units sold in the PC marketplace. Consumers dominate the cell phone market, more than 10 percent of end semiconductor demand, by commanding more than 90 percent of sales. The automotive segment is similar. Semiconductor suppliers will need to refine their view of global markets, as the technology buyer of today may be a teenager listening to a MP3 player, while text messaging and sending pictures on a cell phone. Just as the corporate IT sector once largely determined spending, the global consumer now dominates the technology spending of the early 21st century.



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