The semiconductor industry was at the center of the digital revolution in the 20th century. Now, in the 21st century, the industry is being reshaped. The evolution is being propelled by new power-hungry devices that demand improved features and power efficiencies.
Much of the demand is being driven by the end-consumer markets. The silicon content in today's devices and equipment has increased manifold. Computers, laptops, tablets, e-readers, modems, mobiles, digital photo frames, cameras, personal navigation devices, audio players, automobiles, watches, and even medical wellness devices use semiconductors. These are smart, connected devices that are driven by the latest chip technology.
As the demand for comfort, safety, reliability, entertainment and energy efficiency go up, today's automobiles have begun to use an increasing amount of chips in equipment for video detection (to prevent collisions), infotainment, navigation and system diagnostics, creating further opportunities for the semiconductor industry. Device manufacturers want chips that can deliver better graphics for gaming.
Medical equipment today is dependent on large silicon content. CT machines, patient monitoring systems, cardiac implants, lab instrumentation and even use-at-home blood pressure gauges and glucometers (the consumerization of medical devices is here) have grown the demand for semiconductors.
The proliferation of tablets has become a major game changer. Market analyst IHS in March 2012 reported that media tablets will become the world's fourth largest application for semiconductors by 2014, up from 35th in 2010. Sales of semiconductors for media tablets are expected to grow from US$ 2.6 billion in 2010 to US$ 18.2 billion in 2014.
However, the industry today is grappling with several questions. It is concerned about convergence that could lead to shrinking demand for product categories. For example, as phones and cameras converge, will people opt for just one device? Will this reduce the demand for semiconductors? On the other hand, will convergence lead to products using a variety of platforms and features, thus fragmenting markets and bringing an end to high volume markets? Or, in what appears to be the emerging scenario, will markets opt for multiple products and adopt faster use-and-discard cycles, thereby fueling demand for semiconductors?
Ultimately, it appears that the semiconductor industry will have to partner more closely with end device manufacturers to retain stability through these changing times - it is time for the industry to "rise up the value chain."