Looking Ahead

By Kurt Shuler
2012 has been a tough year for the semiconductor industry and supplier industries like semiconductor intellectual property (IP), with a projected semiconductor sales decline of 3% below 2011’s results. But to those of us in the industry, the decline of 2012 was measured not in numbers, but in its effects on the people in our industry.

2012 brought significant change to the semiconductor and semiconductor IP industries. Witness the following that affects overall employment and more specifically, our friends in the industry:

1. MIPS is for sale, with CEVA and Imagination Technologies upping their bids repeatedly;
2. Texas Instruments is in the process of laying off 1,700 people, most of them from the wireless group;
3. Freescale discontinued its i.MX 7 mobile processor line and may have initiated some layoffs;
4. Intel CEO Paul Otellini announced his surprise retirement in November, but Intel has not announced a new CEO yet, and
5. ST Microelectronics announced that it will exit its ST-Ericsson joint venture, which will likely result in some layoffs.

Source of Change: Mobility Shakeout
Much of this change is linked to what happened in the mobile device market, where Samsung, Apple, Qualcomm and IP provider ARM strengthened their businesses as this market consolidated.

The bottom line: Even though 2012 sales fell only 3% from 2011, there were major differences in results for companies one could classify as 2012’s “winners” or “losers.”

2013 Consensus Forecast: Growth
The crystal ball gazing for 2013 has already begun, and the future of the semiconductor industry looks brighter than 2012’s results:

1. Gartner forecasts 4.5% semiconductor growth in 2013;
2. The IHS iSuppli AMFT predicts semiconductor revenue will expand by 8.2% in 2013;
3. KPMG’s survey of semiconductor executives indicates that execs expect an industry rebound in 2013, and
4. Semiconductor financial analysts Joseph Moore, from Morgan Stanley, and Vernon Essi, from Needham & Company, both stated at last week’s GSA awards dinner celebration that they expected the semiconductor industry to grow in the 2% to 3% range next year.

A word of caution. Most of these 2013 projections were lowered by their respective analysts in November or December from previous baselines.

Let’s Have a Happy 2013!
The good news is that 2013 should bring all-around growth to our industry, providing us all the stability and revenue we need to invest in innovative technologies. I wish you and your family the best during this holiday season, and look forward to working with you to make 2013 a year to remember.

Merry Christmas and Happy New Year!

—Kurt Shuler is vice president of marketing at Arteris.