Semiconductors form the basis of virtually all other technology-based devices. The industry therefore drives, enables and indicates the technological progress of an economy.
Developments in the industry determine the way we work, commute, communicate, entertain ourselves and respond to our environment. The PCs we work on, the cars we drive, the phones we use, the electronic gadgets on which we watch movies, listen to music and play games, the planes we board for travel and even the weapons used for defense use semiconductor devices.
Background
The global semiconductor market has been witnessing growth in the recent times, after recovering from the declines suffered as a result of the economic recession in 2010. The industry is experiencing growth primarily due to developing end markets and new product offerings, supported by process and yield improvements.
While semiconductors are widely used in computers and consumer gadgetry, they are now increasingly being used in the automotive, storage and industrial markets and also in the internet of Things (IoT) space.
The most significant trends for 2014 include the stabilization in the PC market, continued strong adoption of tablets and smartphones as well as automotive electronics and the emergence of the new category of wearable devices, which has boosted growth for the semiconductor industry this year.
Despite intense competition, pricing pressure slowing down growth of the semiconductor market, it is expected that the above-mentioned markets will drive growth in the coming years.
Due to these factors most top executives in the semiconductor industry are bullish about the growth prospects in 2015. According to World Semiconductor Trade Statistics (WSTS) and SEMI, the semiconductor market is expected to grow in 2015 assuming a further recovery in the global economy.
The semiconductor industry has been one of the top performing industries in 2014. Market research firm IHS recently announced its preliminary revenue forecast for 2014. It reveals that the industry is on track to grow 9.4% to $353.2 billion this year, which will be the highest growth since 2010.
Looking back at the last 12 months, we have shortlisted three semiconductors stocks that have performed well:
