Semiconductor industry faces turbulent future

Just as the semiconductor industry starts to recover from its worst three years, analysts forecast a standstill or worse in 2006. This cyclical performance is pushed by the combination of a maturing industry and the aftermath of the technology bubble. More problematic for the semiconductor industry is the fact that it will have to absorb considerable change over the next decade. The first is the increasing integration made possible by denser manufacturing processes. The second is rising manufacturing costs and the third is the rising power of the consumer. The fourth driver is a result of the rising power of the consumer, that is, service providers will become much more important, particularly as consumer devices become more connected. The fifth driver is the emergence of disruptive technologies that could have significant effects. Although the impact of these changes will be enormous, analysts forecast that it is unlikely that investors will give up.