As we've been reporting, markets continue to strengthen for a number of components, sectors, and regions. Among the growth news are the final 2013 data from IHS underscoring the double-digit growth for the industrial electronics semiconductors. Coupling the IHS data with our recent drill-down analyses and market views we see industrial semi continuing to strengthen and grow in volume and revenue.
Industrial growth global positives
Not only are new device strategies and chip solution designs moving the semiconductor and electronics market forward, industrial companies across verticals are working more with service providers and distributors to meet the growing demands for specialized components.
The positive global economic environment has businesses across the spectrum investing and building momentum; that's a positive event for supply chains and service providers. As IHS detailed in 1Q14:
"The market's persuasive bounce-back is due to a strengthening global economy, coupled with higher purchasing confidence across all geographical regions," said Robbie Galoso, principal analyst for industrial electronics at IHS. "While the field may not sound as sexy or attention-grabbing as some of the more popular markets around, like wireless or consumer, there is no underestimating the power or sheer breadth of its applications, ranging from home automation to the medical field, to energy, to aeronautics and military purposes, and much more."
Growth during 2013 in global industrial semiconductors experienced an 11% rise year-over-year, reaching US $33.7 billion and IHS forecasts continued growth to reach US $45.0 billion by 2018. Importantly, this growth is spread across North America, Europe, and Asia.
O&G focus on service providers
Drilling down into the O&G sector, as we approach the Offshore Technology Conference (OTC) 2014 next month here in Houston, TX, we see that the industrial strength and demand stretches into this market sector as well. As increased activity mounts and creates demand for industrial machinery, we see not only new equipment manufacturing but also increased attention to upgrading existing equipment. As Smith's Todd Burke, Senior Account Executive, offered: "There is significant demand for full service support with Last-Time Buy (LTB) inventory for critical electronic components (i.e., sourcing, testing, storing, and material handling of these high-value and long-term storage components)."
As on-board electronics proliferates and extends the capabilities of real-time data transfer from down hole tools to surface stations, the demand for experienced service providers with the capabilities and expertise to properly source, test, handle and store these critical components will similarly proliferate. "Located in the heart of the O&G hub in Houston, Smith is proud to have served the O&G industry as not just a convenient but also a trusted and deeply knowledgeable partner," added Burke.