Smart technology moves up the supply chain

The mainstream business press is reporting that Asian financial markets are on the rebound as a consequence of news that the U.S. will avoid a default on its debt obligations. This was not the only story to celebrate this week, however. “Smart technology” is forecasted to drive demand for new products in the supply chain, thereby impacting a whole range of transport and logistical services.

The Semiconductor Industry Association (SIA), representing U.S. leadership in semiconductor manufacturing and design, today announced that worldwide sales of semiconductors were $24.7 billion for the month of June 2011, a 1.5 percent decrease from the prior month when sales were $25 billion and 0.5 percent decrease from a year ago. Sales in the second quarter were down 2 percent compared to the prior quarter. All monthly sales numbers represent a three-month moving average.

“Despite this month’s modest contraction in sales, the industry saw a 3.7 percent increase in the first half of 2011 sales compared to the same period last year which saw record breaking growth,” said Brian Toohey, president, Semiconductor Industry Association. “Overall semiconductor sales are on track with growth projections of 5.4 percent growth for 2011.”

Gains in the corporate PC refresh cycle, smartphone demand and the subsequent increased investment in IT infrastructure, as well as growing markets in China, were offset by slower consumer demand in June sales. As expected, all regions experienced growth, year to date over last year, except Japan, as the region continues to recover from the effects of the natural disaster earlier this year. Additionally, semiconductor content will continue to increase across all sectors of end-use products especially in the automotive sector.

“The semiconductor industry should be encouraged by the U.S. Administration’s announcement on Friday of increased fuel economy standards and the effort to include more green and smart technology in vehicles,” said Toohey.

We agree with the SIA that these standards will present additional opportunities for growth in the semiconductor industry, and while the implementation is years away, it is an indicator of the increasing demand for smart technology and the innovations enabled by U.S.-made microchips in the supply chain.