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Industrial Semi Presents New Opportunities and Challenges

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Headlines regarding the fate of the PC may not seem directly linked to the specialized market of industrial semiconductors, but in important ways there are links that could benefit industrial consumers. 

1. Market shifts support innovation and growth

As focus has been turning away from the sluggish PC-market, the semiconductor and electronics industry has found new growth and R&D potential in industrial, medical, and automotive semi. Flowing from this is notable growth and increased semiconductor penetration in these markets. For example, automotive infotainment and safety has experienced rapid growth with little sign of slowing down. We are also seeing the fruits of increased R&D in medical electronics as well. This increased attention to these markets has not only improved the overall semiconductor and electronics industry's growth and stability, it has directly improved the devices and features available in the markets, which, in turn, has increased growth estimates for medical electronics and automotive while increasing sales.

2. Industrial devices benefit from new architectures

In the case of industrial semiconductors and electronics, a similar market event has been underway. Industrial equipment and devices are being improved, in part, through improved semiconductor and electronics architectures, designs, and ruggedized component capabilities. Additionally, as R&D continues regarding battery technologies, increased thresholds have been seen and are improving the capabilities and durability of these tools that are subjected to the toughest-environments (cf. Schlumberger's latest Quartet-HT System, for one recent example in the news).

3. Complex downhole tools increasing in semi content

The still expanding and evolving role of highly ruggedized and increasingly sophisticated electronic components in the exploration and production (E&P) sector has seen the greatest market growth from a component perspective. Among the reasons for this growth are shale findings, increased hydraulic fracturing, horizontal drilling, and more sophisticated, permanent, down-hole monitoring needs for increasingly complex exploration and dedicated well situations.

Well costs continue to rise as the complexities of E&P increase and so the need for continuous, real-time monitoring downhole is important. Advances in semiconductor and battery technologies have increased the durability and capabilities of on-board components to provide the array of data and feedback for real-time monitoring, sampling, and related applications simultaneously with ongoing well events. The more recent innovative capabilities of downhole tools is significantly improving costs because of the opportunities of concurrent data collection during E&P; no longer does drilling or production need to stop for monitoring. Additionally, the improved ruggedized capabilities of on-board components is allowing for permanent sensing and automation systems that can remain downhole.

While these semiconductor and electronics improvements are dramatically improving costs and providing well-engineers with essential, real-time, downhole data, there is a new challenge introduced to E&P and O&G companies. The challenge stems from not only sourcing components for tools that will be in service and will need to be supported for a decade or longer (well beyond component life cycles), but also the need to increase their internal capabilities in electronic component management – namely, anti-counterfeiting, handling, storage, and internal customer packaging and delivery. Partnering with experienced component professionals who understand the specific and unique needs of O&G, and especially E&P companies is essential in today's complex global semiconductor supply chain. Smith & Associates is a long-standing partner providing proven, value added services for the entire O&G industry to streamline and ensure reliability, traceability, and best-in-class component inventory sourcing and management.


Todd Burke, Senior Account Executive
Written on Tuesday, 16 April 2013 12:12 by Todd Burke, Senior Account Executive

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