Canadian semiconductor manufacturing industry revenue expected to decline 8% in 2014

The semiconductor and other electronic component manufacturing industry produces a range of input devices that are necessary in the production of electronics, including circuits and memory chips. In the past five years, the industry has contracted due to the continued offshoring trend that has pervaded much of Canada’s manufacturing sector. In addition, greater competition from US and East Asian manufacturers, which offer lower-priced products due to more competitive labour costs, have contributed to the industry’s decline.

“As such, although demand for downstream electronics is on the rise, the inputs are being manufactured elsewhere,” according to IBISWorld Industry Analyst Darryle Ulama.

As a result, in the past five years, industry revenue in Canada is expected to decline at an annualized 5.1 percent to $2.5 billion, including an 8.0 percent decline in 2014.

The broader electronics value chain is highly globalized, with product design, raw material procurement and manufacturing segmented across facilities in different regions.

“Moreover, consumer electronics have global demand, driven by falling prices and technology innovation,” says Ulama.

Industry performance is thus dependent on trade trends such as the competiveness of exports and the extent of import penetration. In the five years to 2014, industry exports are expected to decline at an annualized 6.6 percent to $1.4 billion, as US and East Asian competitors outperform domestic manufacturers. Meanwhile, the value of industry imports is projected to increase at an annualized 1.3%, with strong double-digit gains in 2013 and 2014, pointing to the flood of imports that have supplanted operators.

Similar trends are expected during the five years to 2019. Industry manufacturers, which are typically small- to mid-sized enterprises, will find it difficult to match the research and development (R&D) spending of multinational competitors. As a result, industry exit and acquisition activity are anticipated during the next five years, further contributing to the industry’s decline.

POST A COMMENT

Easily post a comment below using your Linkedin, Twitter, Google or Facebook account. Comments won't automatically be posted to your social media accounts unless you select to share.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

NEW PRODUCTS

SEMI-GAS broadens gas mixing capabilities for highly corrosive gases
08/28/2014SEMI-GAS Systems, a provider of ultra-high purity gas delivery equipment, recently broadened the capabilities of its custom Xturion ...
Entegris announces GateKeeper GPS platform
07/15/2014Entegris, Inc., announced last week the launch of GateKeeper GPS, its next-generation of automated regeneration gas purification system (GPS) technology....
Bruker introduces Inspire nanoscale chemical mapping system
07/15/2014Bruker today announced the release of Inspire, the first integrated scanning probe microscopy (SPM) infrared system for 10-nanometer spatial...