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The truly global nature of the microelectronics industry is a result
of decades of evolution since the invention of the transistor and
the integrated circuit. Today we see a number of dominating trends
that drive and shape the technological and commercial landscape
including:
Electronics Are Increasingly Pervasive
In Everyday Life
‘Microelectronics has become a foremost driver of social and
economic progress worldwide’. Microelectronics underpins virtually
every single industrial sector either directly or indirectly. The
market size of the microelectronics business chain in 2005 represents
nearly 1% of the entire world’s GDP with an annual average
growth rate of approximately 15%. Taking into account the many other
industries that depend on electronics (such as aerospace, automotive,
consumer, defence etc.), the global value leverages some €5,000
billion.
Rapid Technological Change
Forces of competition, convergence (computing and communications,
hardware and software technologies etc.) and the attraction of world
markets yields relentless technological advancement.
The Cyclical Nature Of The Industry
Commercial and technological cycles that move at different rates,
and at times with punctuated change, bring about a highly cyclical,
yet difficult to predict, industrial cycle.
Globalisation And Disaggregation
Of The Supply Chain
Not only major product producers, but the majority of SME’s
in the industry are leveraging suppliers of manufacturing, design,
research and services from the most effective sources around the
globe.
Shorter Product Life-cycles
Market dynamics have witnessed the growth in demand for commercial
and consumer products. The nature of these markets are different
from the historical demand and major characteristics include lower
costs and reduced life expectancy of products, yielding shorter
product life cycles.
Competition & Competition Intensity
The nature of participating in a truly global industry exposes organisations
to high levels of competition where differentiation is mandatory.
Increasing costs and the economics of supply often dictate that
players need to command a significant share of the total available
market. These pressures often yield a concentration of suppliers
in end market segments with ownership among larger and often foreign-owned
organisations.
The NMI, The UK And The World-wide
Business Of Microelectronics
In 2004, the NMI commissioned an independent study to define the
context of microelectronics in UK and global terms in order to help
focus its activities. Extracts from the study discuss trends and
drivers of the industry and the dominating business models. You
can access the report by downloading the NMI
Study 2004 The UK & Microelectronics Industry. |
