New York, NY (PRWEB) April 28, 2014
The Semiconductor Machinery Manufacturing industry supplies capital equipment and machinery to semiconductor manufacturers that produce the necessary inputs for a range of electronic products. Although industry revenue is expected to increase at an annualized 6.7% to $1.7 billion, this growth mostly represents the industry's recovery from its 2009 low. As with much of Canada's manufacturing sector, industry operators are losing competitiveness to foreign players, which often enjoy lower labour and production costs. This translates to lower-cost imports, which have threatened the industry. As a result, Semiconductor Machinery Manufacturing industry revenue has decreased since 2012 and is expected to decline an additional 1.0% in 2014.
According to IBISWorld Industry Analyst Darryle Ulama, “The entire electronics supply chain is highly globalized, creating a fiercely competitive business environment that embeds the industry and its downstream markets.” Industry performance is closely tied to trends in semiconductor production, which ultimately depends on global demand in electronics. Rising incomes throughout emerging markets have increased demand for consumer electronics, while wireless technology and smartphone adoption accelerates in developed economies; the result has been an increase in demand for semiconductor inputs and, subsequently, semiconductor machinery over the past five years. However, because semiconductor manufacturing activity is concentrated abroad, the industry must compete for lucrative export markets with established machinery manufacturers based in the United States and Taiwan. In 2014, exports are expected to account for 57.8% of industry revenue, demonstrating the importance of client markets outside Canada.
“In the five years to 2019, demand for semiconductors in medical devices, vehicles and tablets will increase industry revenue,” says Ulama. Nevertheless, the industry's domestic position will continue to be threatened by foreign competition, precipitating the exit of industry operators or relocation to overseas facilities. As such, in the five years to 2019, the number of enterprises is expected to decline. Those that remain are expected to invest heavily in the development of advanced machinery, including extreme ultraviolet lithography (EUV).
For more information, visit IBISWorld’s Semiconductor Machinery Manufacturing Canada industry report page.
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IBISWorld industry Report Key Topics
The Semiconductor Machinery Manufacturing manufactures equipment used to make semiconductors, more commonly known as chips or integrated circuits. Such equipment includes wafer-processing equipment, semiconductor assembly and packaging equipment and other semiconductor-making machinery.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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