An interesting market development in the Semiconductor subsector is change in the types of application for these components. Forecasts show an increase in revenues from applications like communications, automotive, and industrial but the revenues from data processing will lag behind. The strongest growth will originate in communications applications, with a 2015-18 increment of USD +13.5bn, growing at a rate of +4% CAGR.
At the same time, industrial and automotive applications will originate the second and third largest 2015-18 increments and the highest CAGRs (+8.6% and +5.9%), respectively. With the industry increasingly transitioning towards IoT, this growth is explained by increasing demand for sensor-enabled industrial equipment and “smart” automotive components.
The data processing applications market will experience a USD -4.8bn revenue decline, driven by the worsening of the solid-state drive market (SSD). SSDs are facing an increasingly aggressive pricing environment and a lower average capacity per SSDs, especially in the enterprise segment.
Referring to the different types of semiconductor integrated circuit device, strongest growth will originate in the application-specific and optoelectronics categories, growing by more than USD +5bn by 2018. The application-specific category is driven by the move from ASSP (application-specific standard products) to high-performance ASIC (application-specific integrated circuits) for data center and networking applications. Microcomponents growth of USD +4.5bn is driven by an increasing demand for microprocessors used in embedded systems for automotive, industrial, and communications applications and used in low-end servers being adopted in data centers to meet IoT processing needs.