Of all the markets hit by the devastation of the 2007-09 global economic recession, it can easily be argued that European semi was the unfortunate leader in this group. With the loss of two of it's major chip companies, and therewith the exiting from the DRAM industry, Europe is facing a new decade and new questions for it's high tech future.
EMS for Europe has been very important, and therein lies some significant opportunities. While EMS forecasts are not stellar, quite the opposite with 2013 being seen as the most realistic point at which EMS sales will rebound to 2008 levels, as reported in Manufacturing Market Insider (Vol. 19:11, November 2009) and citing forecasts from InForum market research. While growth has started for EMS and looks to hold steady around the 5% range +/- from 2010 through 2013, it's just going to take three years to recuperate the losses from 2008-09. That needn't be seen as negative; growth is growth, after all. With EMS rebounding, albeit slowly, and Europe being heavily invested in EMS, particularly specialty or niche EMS markets, there are noteworthy opportunities for European EMS to lead in new markets and sectors. These opportunities and markets will be explored more closely in the upcoming MarketWatch Quarterly edition due out later this month! Subscribe here to get your copy before public release.
The EU reaffirmed it's commitment to green policies at all levels during the UNFCCC's COP15 conference in Copenhagen, Denmark in December (see here for our commentary from COP15). While that makes for nice political talk, it does have bearing on business markets, particularly semi. One of the important ways in which Europe continues to be a world leader is in the consumer support through purchase power of highly efficient appliances and consumer electronics.
With new government support in the form of reduced or eliminated taxes on electric cars, coupled with eager consumers for smaller, greener autos along with the European auto sector having a better footing than, for example, the American auto sector, there is ample opportunity for European auto to lead the global electric vehicle market. Electric vehicles are an important market for semi, moving the percent of chips per vehicle significantly higher than presently.
Will European semi rebound? That's an interesting and very important question for many companies and for both the semiconductor and electronics industries. There is vacillating investment in Russia, there are politico-economic reasons (see above) to believe new markets hold opportunities, and there is existing consumer support for products. Although the pace will be staid, I do remember the turtle winning the race in the end, no?