Five major electronic products drive semiconductor consumption, medical electronics bright future
Until around 2000, growth in semiconductor consumption was driven by desktop computers, Office computers, wired communications equipment and home appliances.
Subsequently, notebook computers, digital appliances and mobile phones began to rise, and the main consumer of semiconductors from enterprises to households and individuals.
Recently, with the increasing number of semiconductor consumers, the trend of expanding consumption is increasingly obvious.
The reason is that rising incomes at the BOP (base of population: the poor with an annual income of less than $3,000) have gradually become a new layer of semiconductor consumers.
Currently, EMS and ODM manufacturing mode are the main electronic products for this semiconductor consumer layer.
EMS and ODM products now account for 32% of all semiconductor products, up from 8% a decade ago.
The changes in the last 10 years have far exceeded our predictions.
By the same token, changes in the next decade are also likely to be much greater than now expected.
Air-conditioners, PCS and big-screen televisions are set to spread quickly in Chinese cities.
In Japan, refrigerators, washing machines and vacuum cleaners were called "three big pieces" in the mid-1950s, and color televisions, air conditioners and cars (private cars) were called "3C" in the mid-1960s. Durable consumer goods were gaining popularity.
In the 1970s, cassette recorders, stereo equipment, passenger cars, air conditioners and microwave ovens and other general popular products came out, electronic products began to be widely popularized.
With the increasing popularity of electronic products, along with the increase of consumer income, products are gradually upgraded and the number of products kept is also increasing.
In the 1970s, the black and white TV was gradually upgraded to color TV. Since the second half of the 1980s, refrigerators have been increasingly large, air conditioners have been upgraded from models with only cooling functions to dual-use models, washing machines have been fully automated, and TV screens are getting bigger and bigger.
In addition, in consumer durables, there are products where household penetration (the number of households kept divided by the number of households) exceeds 100%.
Take color TV as an example, nearly 40% of households have more than 3 sets.
In China's urban areas, refrigerators, washing machines and color televisions have become popular as basic durable consumer goods.
Penetration of these consumer products roughly reached the upper limit in the 1990s, but color TV penetration continued to expand beyond 100 percent.
Air conditioning began to be widely used in the 1990s, while mobile phones and PCS began to be widely used in the late 1990s.
These durable goods have brought people a more comfortable life than basic consumer durables and are proof that China's urban areas have entered a highly consumer society.
Let's take a look at the rate at which consumer durables are gaining popularity.
It took about 20 years for refrigerators, washing machines and vacuum cleaners to reach their peak, compared with 15 years for China's urban areas.
Because China's urban areas have a larger population than Japan's, it had been thought that adoption would take longer.
But that does not seem to be the case.
Products that are expected to gain rapid popularity in China's urban areas over the next decade include air conditioners, PCS, cars and large-screen televisions.
Moreover, it is expected that the high level of consumer durables experienced by Japan in the 1980s will make significant progress in China's urban areas over the next decade.
Another important change is that the situation is changing as countries around the world are promoting energy infrastructure and implementing health care reform policies.
Countries are accelerating the introduction of smart grids.
Solar and wind power use natural energy sources, and the amount of electricity produced varies greatly over time or in different climatic conditions.
Therefore, the current power grid has problems such as adverse current or unstable power supply when more than 20% of new energy is introduced.
In order to solve these problems, countries are stepping up the introduction of smart grids.
Europe, the United States and China have been steadily advancing plans to introduce smart grids, which are expected to attract attention around 2020 as a driver of semiconductor consumption growth.
As reported by the media, there are problems with the medical system in all countries.
Because there is no national health insurance in the United States, the number of people unable to pay high medical bills is increasing, with one in four individuals going bankrupt because they cannot afford health care.
Europe is suffering from a lack of health insurance revenue, rising medical bills and an increase in the number of hospitals closing down because of the downturn.
Developed countries, in particular, are facing an ageing population and a shortage of doctors and hospitals.
To address these problems, countries are considering increasing the share of home health care.
Through the improvement of the division of labor system, health management, disease prevention and examination are carried out by families, and specialist treatment is carried out by hospitals to promote the effective use of medical institutions.
According to the above changes, it can be predicted that the following five products will become the main electronic products that are expected to drive the growth of semiconductor consumption in the next 10 years.
Let's analyze the trend of these products and the expansion of semiconductor consumption in order.
(1) tablet terminals represented by "iPad" are expected to be popularized together with laptops to high-income earners in developed and developing countries.
It is expected that the flat panel terminal will eventually become popular for non-working purposes.
In 2010, 240 billion yen was spent on semiconductors for tablet terminals, and 4 trillion yen was spent on laptops, which will expand to 3 trillion 150 billion yen and 8 trillion yen respectively by 2020.
(2) in terms of mobile phones, consumers in developed countries will gradually switch to smart phones, and there is still room for increasing penetration in developing countries.
In addition, smartphones will gradually become more functional as they are increasingly used for non-calling purposes, boosting semiconductor consumption as the cost of semiconductors increases.
Taking these factors into account, mobile phone semiconductor consumption is expected to expand from ￥2,400bn in 2010 to ￥5,800bn in 2020.
(3) automobiles, with the popularity of hybrid vehicles (HV) and electric vehicles (EV), the field is rapidly becoming electronic.
In the future, in pursuit of safety, comfort and energy efficiency, the number of semiconductor devices in automobiles will increase. It is estimated that the semiconductor consumption in this field will increase from 1 trillion yen in 2010 to 3 trillion yen in 2020.
(4) smart grid is the most vigorously promoted infrastructure investment project in the next 10 years.
Demand for smart meters, power routers and servers will surge.
Semiconductor consumption is expected to rise from almost nothing today to y1, 500bn by 2020.
(5) in the field of medical equipment, it is estimated that in the future, the demand area for semiconductors will shift from the special equipment used by medical institutions to the disease prevention and disease examination products used by individuals or families.
These include products like games to stay healthy or prevent disease, and products that automatically check for illness within the home.
Spending on semiconductors for medical devices is expected to rise from ￥800 billion in 2010 to ￥1 trillion by 2020.
By 2020, the total semiconductor consumption of these "top five electronics" will surge from y9tn 450bn in 2010 to y23tn 600bn, accounting for 55 per cent of the total semiconductor market from 31 per cent.
Since 2009, major overseas semiconductor manufacturers, such as Intel, Texas instruments and stmicroelectronics, have all said they will devote themselves to the automotive, energy and medical semiconductor businesses