There is demand out there and the semiconductor industry is squarely positioned for growth simply because there is enough long-term demand from key sectors that are increasing semi penetration rates. This week, Smith & Associates released the latest MarketWatch Quarterly to subscribers (free subscription here) in which we carefully review critical sector analyses and growth opportunities. The question is not if there is growth, because there is; rather the question to be asked is, "how do we position ourselves to realize the most from the solid growth occurring in specific and healthy sectors?"
As we discussed earlier this week here, automotive semis are seeing positive growth with forecasted demand visibility for the next few years, minimally. This solid growth is part of the fundamental strength and growth within the semiconductor industry. Penetration rates are on the rise and demand for the features provided by the components are not only mainstays, but many are also mandated by governments.
Another critical growth sector for the semiconductor and electronics industry is healthcare. As we move forward in time, the barriers to adopting various 'healthcare IT' solutions have been dissipating and more electronic healthcare information and healthcare based procedures are relying on solutions from our industry. The advances in MEMS have catapulted the penetration rates for semis in healthcare due increases in capability, functionality, size shrinks, power efficiency and pricing (due to reduced ASP based on economies of scale and widened competition) (see also this article from EETimes). MEMS has advanced to the point of being adopted into microfluidics based healthcare solutions for drug administration, remote patient monitoring, cardiac and other critical implants, among many other healthcare based solutions (see this opinion page from earlier this year). According to recent iSuppli research here, "The industrial, aerospace and medical markets [for MEMS] in the ﬁrst half of 2011 continued the strong growth seen in 2010, with revenue expanding by 31 percent."
Importantly for the semiconductor value chain, the healthcare sector is not based on MEMS alone, but includes the gamut of semi solutions, from CMOS, SoC, various ICs, and critically the wireless and RF markets, to name a few. Wireless solutions are experiencing particularly strong growth which is expected to reach US $1.34 billion by 2016, and extending growth to the wider networking value chain (see this recent report from EETimes, and this forecast for optical telecommunication networks involving MEMS for high data transfer from iSuppli). With remote patient monitoring booming, both due to availability of affordable solutions and rising healthcare costs, ABI Research, as reported in this EETimes report, forecasts strong growth:
"[…] the market for wearable devices will reach more than 100 million units annually by 2016 as a range of factors combine over the next five years to drive consumer and healthcare adoption. These devices, ranging from heart rate monitors for measuring an individual's performance during sports to wearable blood glucose meters, will all enable greater detail in tracking, monitoring, and care – often through connections provided by mobile phones."
Finally, there is also the important, although more costly, healthcare subsector of robotic prostheses. With the increased functionality and more natural mobility gained from robotic prostheses, more people are realizing greater freedom and resumption of pre-amputation lifestyles thanks to the dramatic improvements in prostheses (see this video from Manufacturing Business Technology for one cutting edge example). While robotic prostheses are still costly devices, and therefore still unfortunately in more limited distribution, the addition of robotics with multiple sensors, improved hydraulics, and predictive computing, to name only a few critical components, is nothing short of phenomenal and life-changing for the recipients, regardless of age. As these types of prosthetic solutions become more widespread, the costs will decline and become more widely covered by various healthcare insurers.
In short, the forecast for growth is very strong for the semi healthcare/medical sector both in terms of a variety of components seeing increased penetration, but also in unit and revenue growth through the next five-year CAGR cycle, minimally.
UPDATE 9-30-11: See this recent article from Bloomberg for the latest in medical apps and handheld medical devices that work in concert with smart wireless devices (SWDs) for field and emergency use. These applications and devices are certain to increase and change the way that helathcare, consumers and technology interact - a true positive for the semiconductor and electronics industry.