Electronics Production | March 13, 2008

German semiconductor market will<br>increase by 4% in 2008

“In 2008 we will see a 4% increase in the German semiconductor market, which will increase turnover to €11 million”, says Dr. Ulrich Schaefer, chairman of the ZVEI Group ‚semiconductor components’.
The growth will be supported by the 4% sales increase in the discrete semiconductor, opto-semiconductor and sensor/actor segment. The 2007 drop in turnover of 4.1% (€-basis) can be attributed to the fluctuating exchange rate of the weak Dollar and a strong Euro. When calculating on Dollar-Basis, this drop will turn into a 4.1% increase.

“The 2007 global increase in turnovers lay at 3.2, which pushed sales to $255.6 billion.“ Schaefer is expecting a further increase this year in the semiconductor sales by 7% to $275 billion. This development will be stabilised by all segments: ICs, optosemiconductors, sensors/actors as well as discrete semiconductors.

The sales figures for ICs lie above the emerging growth rate. However, the group was not able to determine to what this surplus of 21 billion in ICs can be attributed to; the build-up of stock or a soaring increase in demand. “A possible explanation could be, that the demand from the Chinese market has triggered this increase,“ said Schaefer.

The German market for discrete semiconductor, optosemiconductor and sensor/actor has seen a 14% sales drop in 2007. If we suggest a stable exchange rate, we will estimate a 4% increase for 2008. ICs saw a 1.5% drop last year, but ZVEI is expecting a 4% increase in the segment for 2008.

Continuous growth in the German automobile industry

This market segment has grown with a 4% increase to 15% market share – after a 12% increase in the previous year. This is due to the increased demand in the smart card industry. “However the chip card market is subject to volatile fluctuations, so the increase will be affected by it too,” restricts Schaefer.

The positive development in the automotive segment is continuing its growth with a moderate 1%, after a 10% increase in 2007. However, this is due to exchange rate fluctuations and not to a reduce number of units. The automotive segment now holds 35% of the German market. Germany and Japan dominate the global production in this segment with a joint 50%.

Data technology was able to stabilise in 2007, after a 15% drop in the previous year. The market share now lies at 32%. Communications however has dropped to a 15% market share. Consumer electronics could stabilise their market share at 3%, despite a 13% drop in sales.

ICs stabilise turnover increase in the global markets

The turnover increase of the global semiconductor market was mainly due to the increase of ICs to $218 billion in 2007. A smaller increase can also be listed for the discrete semiconductors to $ 16.8 billion. The turnover for optosemiconductors and sensors/actors however dropped to $15.9 billion and $5.1 billion respectively.

ZVEI forecasts a 7% increase for the global semiconductor market in 2008 to approximately $275 billion in turnovers. The ICs expect an increase of 7%, sensors/actors a 9% increase, opto-semiconductors increase by 11% and the discrete semiconductors will be able to grow by 6%.

The division of market segments shows that data technology, with its 42% share, still uses every second semiconductor. Second biggest segment is Communications with a 21% share. Consumer electronics also holds a 21% share of the market. Automobile was able to hold its market share at 8% , while the industrial segment dropped to a 8% market share.

The Asian market signals satiation

“The regional development differs greatly“, says Schaefer. Europe and America showed the same demand of electronics equipment in 2007. However, this is due to a stabilisation of the European market, a turnover drop in the American market and the outsourcing to Asian manufacturing locations. Asia/Pacific stabilises at a 50% market share, and Asian growth rates are only marginally above global figures. Japan shows a light drop since 2004 but the market share is, due to high-end consumer electronics, stabile.

An average European growth

The European market increase of 2.7% is almost as strong as the global semiconductor market. The increase figures are as follows: ICs 3%, sensors/actors 7.7%, discrete semiconductors 0.4%. Optosemiconductors show a 1.2% drop. ZVEI predicts a solid 5% growth for the European market in 2008.

Data technology has with 35% the biggest share in the European market. The automotive industry has a 21% market share, Communications are at 20%. The industrial segment holds a 14% market share, while the consumer electronics segment lies stabile at 10%.


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