Chip demand good, but about prices, says Renesas

“There are many reasons to be optimistic about unit demand,” Matthew Trowbridge, CEO of Renesas Technology Europe, told EW. “The question is: what will people pay for it?”

Energy efficiency is going to be a robust area for the industry because semiconductors are the best way of delivering power savings. “Would you buy a washing machine without an ‘A’ sticker on it?” asked Trowbridge. “Microprocessors are used to manage that. It’s a huge opportunity to manage energy efficiently.”

“The DTI’s smart metering initiative in the UK is getting people to look at the energy they use,” added Trowbridge, “usually you only know when you see the bill, but there’s a device now which puts a clamp on the cable and it tells you how much energy you’re using. What are people willing to pay for that?”

Although the premium car industry in Europe has been hit by the fall of the dollar, making US exports less profitable, Europe still has considerable market strength.

“There’s still substantial industrial demand in Europe which there isn’t in the US because a lot of US industry has moved to Asia.
There is expanding demand in Eastern Europe with the ability to produce there cheaply. TV production is increasing fast in Turkey, Poland and Slovenia.”

Trowbridge saw robust semiconductor demand from the increasing demand for electronics in cars for entertainment and safety and the rapidly expanding storage capacity of  HDDs and SSDs combined with rapidly decreasing price per byte.

Another boost to the semiconductor market will be the accelerating worldwide move to digital TV migration.

Analysts variously forecast growth for the market at: 10 per cent (Future Horizons and InStat), 7-8 per cent (SIA), and 7.5 per cent (iSuppli).