Then in early 1 sass a very sophisticated microprocessor chip of silicon the size of a finger nail was created to place the vast amount of computers to perform the same functions. Dickens (2010) then reviews, even though, the semiconductor is still a young industry but the growth of production has been astounding. In fact since 1980, the semiconductor industry is probably the fastest growing Industry In the world. The global sales’ figures have shown an impressive growth from $bin 10 and $bin 210 in 1980 and 2004 respectively. The global market has been trebling every five years (Dickens, 2010).
In order to Interpret the phenomenal of semiconductor Industry there a numbers of reasons for the industry rapid growth. Firstly, according to Dickens (2010) the changing patterns of consumption has played the important part of the growth. Dickens (2010) argues although the semiconductors seem to be Invisible and consumers do not actually go and search for semiconductors, most of consumers’ electronic equipment contain some level of semiconductor. This is because the electronic equipment need semiconductors In order to be able to perform variety of functions.
The demand for better functions of the electronic equipment to make our daily life more comfortable is one of the main factors for the thriving of semiconductor industry. Dickens (2010) Illustrates further that the Increasing demand In producing a better performance of the PC’s (personal computers) is high. Hence the PC’s market is very competitive, leading semiconductor manufacturers, for example Intel and MAD are demanded to create new generations of powerful and high capacity chip In order to meet the demand from the PC manufactures.
Moreover, the world’s leading software company, Microsoft, has successful produced new generations of software, which have also required Increasingly powerful microprocessors. As a result the demand for high performance semiconductors become explosive (Dickens, 2010). Thirdly according to Dickens (2010), since the environment in the global semiconductor market is fiercely competitive producers have to push down their selling price In order to gain the bigger share in the market. At the present, the price of semiconductor is a tiny fraction compare to twenty years ago.
For example the price per megabyte (MS) In the sass was $25 and for year 2010 It costs Just a few cents (Talked, 2010). The falling of the price has no sign of decreasing the semiconductor production. This is because the technological of PC developments has grown rapidly. In other words, PC’s ND semiconductors Industries have become symbolically locked together. Lastly, and probably is the most important factor behind the industry growth. Dickens (2010) states that by the year 2000, the semiconductor industry growth has shifted from PC toy 2 mobile phone.
Dickens (2010) reviews further the sophisticated digital electronic products have become more important and more related to the internet world than in the past decades. Digital TV’s and cameras, tablets, video game consoles, digital music players etc. Have become a part of the world of network. Thus the demand for semiconductors is overwhelmingly worldwide. As the result the semiconductor producers has to be able to supply the products that could relate to the increasing centrality of the internet and the development of communication equipment.
According to Dickens (2010) the semiconductor industry is a highly segmented market. This is because there are vast numbers in types of semiconductor which are demanded to be suitable for different kinds of development of products and equipment in the global market. This factor causes another major problem which is the producers can experience many problems in cost of production facilities. As Dickens (2010) explains, it takes at least a year to build the facilities while the demand of different kinds of semiconductor can change rapidly.
On top of this it is necessary for production equipment to be replaced or updated every three to five years. The producers will be forced to invest in expensive manufacturing equipment which in turn becomes quickly obsolete. Therefore the industry could be subject to face a shortage of supply in the future. A severe shortage of chips could create a large-scale of problems and raises prices for end user. Thus it could limit the growth of the semiconductor industry. Recently semiconductor industry has tried to solve the cost of production facilities’ problem by shifting to the developing countries.
The combination of capital intensive technology and with low cost labor with intensive production would help generating and lowering the cost of production. Hopefully the industry would be able to thrive and continue to supply the demand from different industries and to make our daily lives easier and even more comfortable. Reference Dickens, P. (2010). Global shift mapping the changing contours of the world economy: Chips with Everything, up 317-346, London. Sage publication.
