Application

In the last 10 years, consumer electronics has grown and dispersed at a high speed, making it the largest semiconductor application area for distributors. However, starting in 2011, communications will be the largest distribution application market, including telecommunications equipment, mobile phones, media tablets and other mobile Internet devices (MIDs). The growth rate of new products will help drive the development of the communications market.

IHSiSuppli estimates that $13.8 billion in communications-related semiconductor sales in 2010 was achieved through distribution channels, accounting for 55%, while the remaining 45% was achieved through direct sales. Distributors and major board suppliers play an important role in the communications semiconductor supply chain as they help manufacturers with weaker internal design capabilities to produce qualified products.

Semiconductor suppliers will continue to adopt direct sales strategies in certain centralized communications industries such as telecommunications equipment. Therefore, IHSiSuppli predicts that the proportion of direct sales to communications semiconductor sales in 2015 will rise to 48%.

The industrial and automotive electronics markets are characterized by diversification and decentralization. Higher industry growth rates and lower manufacturing concentration provide ample opportunities for distributors.

In addition to the distribution network, core chip suppliers are actively improving their design service network due to the long design cycle of the industrial and automotive electronics market and diversified customer needs. An effective service network can speed up manufacturers' time to market and lower barriers to entry. Service networks can also create more business opportunities for semiconductor suppliers.