San Jose, CA -- January 11, 2011 -- GIA announces the release of a comprehensive global report on System-On-a-Chip (SoC). Although the prolonged severity of the recent economic slowdown, and depressed key-end use segments have elicited decline in value sales for System-On-a-Chip (SoC), the market is nevertheless expected to recover poise in the medium-to-long term period and register US$39.4 billion in sales by the year 2015. Primary factors fingered to drive growth in the market include, expansion of microcontroller based SoCs business, increase in demand for advanced SoC designs, recovery in key end-use markets post recession and technology innovations. Encouraging demand from developing nations, particularly Asia-Pacific also augur well for the market.
Chip making industry, which has become an indispensable part of modern electronics with almost every man-made electronic device being integrated with an embedded microchip or integrated circuit (IC), has however suffered the worst in 2008 and 2009 due to the economic recession. SoC, an important part of the IC design ecosystem, is extremely sensitive to both economic and technology pressures. Fortunes in the SoC market are closely tied to computer, consumer electronics, wireless communications, wired communications and automotive electronics segments, all of which have witnessed significant disruptions in business activity/prospects due to the economic slowdown. Therefore, the deceleration in growth comes as no surprise. The recession has resulted in receding corporate and consumer demand for semiconductor integrated electronics. Demand for PCs, optical disk drives, scanners, printers, storage devices, PC connectivity products and gaming consoles especially plummeted to hurting levels in the consumer market, which is not surprising given the volatility of this market in comparison to the corporate/enterprise sector. New construction and installation of metro-level communications networks dipped impacting demand for semiconductor chips like Ethernet chips. Communication infrastructure spends, with the exception of select developing countries like China, and India, has witnessed steep falls thus impacting SoC demand in this end-use sector.
Investments in SoC semiconductor designs, therefore suffered a temporary setback in growth momentum as chip designers turned defensive against uncertain economic prospects. Bad economy and deterioration in business climate, therefore, resulted in chipmakers scaling back production as a knee jerk reaction to the soft business environment prevalent in most end-use sectors. Spooked by the financial crisis and lack of credit availability, manufacturers reined in capital spending. Excess inventory in the supply chain also resulted in reduced new orders for SoCs. The lull in business environment and the strained fiscal climate has negatively affected the market, suspending temporarily the migration of the semiconductor industry towards adopting a System-on-Chip (SoC) style chip development approach.
However, the impact of recession on SoC market has been largely short-lived, and less severe in comparison to the impact on other chip technologies. This is largely because the underlying economics of packaging greater functionalities into smaller and yet more power-efficient devices, continue to drive the need for greater integration within a semiconductor device, which in turn accelerates the demand for SoCs. Post recession, renewed emphasis on tapping into growth opportunities in the chip industry will elicit a shift in focus away from cost reduction towards technology innovation, with ensuing benefits echoing downstream into the SoC segment. As a result, SoCs are expected to emerge into a pivotal technology, which will find increased adoption for advanced computers, smartphones, and other mobile devices and handsets, new-age consumer electronic devices and automotive electronics among others.
As end-use sectors begin replenishing depleted inventories, the semiconductor industry is expected to get a new lease of life with opportunities trickling down into the SoC market segment. Resurgence and recovery in enterprise spending will unleash pent-up demand for SoC's in the computing end-use sector, as companies restore postponed investments, and hitherto deferred purchase decisions, to provide commercial opportunities.
Growing popularity of virtualization, cloud computing, and increased penetration of mobile computing platforms, will drive increased adoption of SoCs in the computing end-use sector. The automotive end-use sector, one of the worst hit in the recession, although flaunts robust medium to long term potential given the sturdy trends in design/engineering projects and proliferation of entertainment and automated navigation technologies and the resulting increase in electronic content per vehicle, the short-term recovery however remains anemic frustrated by piling up of inventories.
Consumer electronic devices end-use market is expected to witness a relatively quicker recovery with demand for LCD TVs, netbooks, Blu-ray players and smartphones, among others expected to rebound. Continued strong government spending on weaponry, and intelligence systems as part of policy commitments, bode well for SoCs in the military and defense market. The scope of the market will become bigger and richer over the next few years, driven by expansion of microcontroller based SoCs business into four unique segments i.e., commodity controllers, basic SoCs, advanced multicore SoCs, and value multicore SoCs.
As stated by the new market research report, the US continues to remain the largest regional market for SoCs. Asia-Pacific represents the fastest growing regional market, displaying a CAGR of about 8.02% over the analysis period. Increasing infrastructure spends, particularly in communication infrastructure in key developing markets such as China and India are expected to drive demand SoCs in the region. By product type, market for SoCs Based on Embedded IP represents the largest segment, holding a lion's share of the market.
Major players in the marketplace include Microsemi SoC Products Group, Altera Corporation, ARM Holdings Plc, Broadcom Corporation, CoreLogic Inc, Freescale Semiconductor Inc., GCT Semiconductor Inc., Infineon Technologies AG, Intel Corporation, LSI Corporation, Marvell Technology Group Ltd., Panasonic Corporation, Mentor Graphics Corporation, Renesas Electronics Corporation, NVIDIA Corporation, Palmchip Corporation, Provigent Inc., Samsung Electronics Co. Ltd., STMicroelectronics N.V., Synopsys Inc., Taiwan Semiconductor Manufacturing Co. Ltd., Texas Instruments Inc, Toshiba America Electronics Components Inc, Xilinx Inc., Zilog Inc., ON Semiconductors Corporation, Ziptronix Inc., among others
The research report titled “System-On-a-Chip (SOC): A Global Strategic Business Report” announced by Global Industry Analysts, Inc., provides a comprehensive review of market trends, issues, drivers, company profiles, mergers, acquisitions and other strategic industry activities. The report provides market estimates and projections in value sales for major geographic markets including the United States, Canada, Japan, Europe, Asia-Pacific, and Rest of World. Key product segments analyzed include SoCs Based on Standard Cell and SoCs Based on Embedded IP. End-Use markets analyzed include Computers, Communication Equipment, Consumer Electronic Devices and Automotive Applications, among others
For more details about this comprehensive market research report, please click here
About Global Industry Analysts, Inc.
Global Industry Analysts, Inc., (GIA) is a reputed publisher of off-the-shelf market research. Founded in 1987, the company is globally recognized as one of the world's largest market research publishers. The company employs over 800 people worldwide and publishes more than 1200 full-scale research reports each year. Additionally, the company also offers thousands of smaller research products including company reports, market trend reports, and industry reports encompassing all major industries worldwide.