The New Semiconductor Paradigm

As a result of the difficult financial conditions in 2009, sheer necessity required that semiconductor company executives become more adept at managing operations. Inventories were lean, factory utilizations were high and companies managed their balance sheets well. In essence, they ushered in the "New Semiconductor Paradigm". With positive economic indicators for 2010, forecasters predict that 2010 will bring increased manufacturing which will require renewed investment in capital spending. A majority of IDMs continue to follow the fab-lite approach to manufacturing, maintaining older process technology fabs in-house and outsourcing advanced geometries to foundries. OEM revenue declines in 2009 marked the only decline since 2001's dot-com age. After an almost 7% drop in 2009, the global consumer electronics market is projected to recover to $317.3B in 2010 from $312.3B in 2009, according to iSuppli Corp. Sales will be driven by digital set-top boxes (STBs) and appliances such as e-readers and other electronic gadgets in developed nations and basic appliances in emerging markets. For example, China OEMs are expected to continue to drive LCD TV sales. Similarly, STB sales are expected to be strong in Asia Pacific due to the investment in digital infrastructure.