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Strategic Analysis: semiconductor industry - Essay Example

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With the changing economic environment, factors such as globalization of markets, international economic integration, removal of barriers to business and trade and increased competition have enhanced the need of new technological innovations and semiconductor industry…
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Strategic Analysis: semiconductor industry

Download file to see previous pages... Each year, more than 100 state-level research projects undertakes around the world. "An appropriation of $20 million to match the semiconductor industry's support for the Focus Center Research Program, which supports pre-competitive research on microelectronics technology at 30 universities to ensure continued U.S. leadership throughout the remaining years of the CMOS era" ("Semiconductor industry Association", 2005). It has developed into an integrated business with commercial interests spanning household appliances, telecommunications, information technology, international trade and real estate.
Semiconductor industry has maintained high-speed growth through continuous optimization of is product mix and constant technological innovation. It has also realized rapid expansion through capital injections. Its main products used in TV sets, air conditioners, computers, mobile phones, refrigerators, computer software and network equipment. Present day situation in semiconductor industry is marked by two factor - specification, which is to do with the 'design quality' of service, and conformity, which is to do with the 'process' quality which is achieved are of particular importance to customers.
With the success of its new digital technologies, stating in the end of 1990s, semiconductor industry began to rationalize its product lines by selling off subsidiaries whose products were not key to its competitive strategy (Spemcer, 2004). In addition, it had begun to follow a strategy of withdrawing from small markets with limited potential for its core products and to look for markets in countries with a major growth potential for semiconductor industry products. "Sustaining continuous advances in semiconductor technology is vital to sustaining improved U.S. economic performance, according to one of the nation's leading economists, Professor Dale Jorgenson"("Semiconductor industry Association", 2005).
If there are few, large competitors in the industry, it is likely that this is due to high entry barriers. Conversely, an industry of many, smaller competitors is likely to be the result of lower entry barrier-Competitive rivalry on both a price and a non-price basis will be higher in the industry comprising the more, and smaller, competitors. If the product is mature and the industry is subject to 'shake-out', then competition will be more intense (McDonald, Christopher, 2003). The main competitors in the industry are Samsung Electronics Co, Toshiba Corporation, Phillips, etc. For instance, Samsung Electronics Co rang up $4.5 billion in sales in Southeast Asia last year - a 50-percent rise fuelled by higher demand for digital home appliances. The company said this year's sales target was $6.3 billion, or 40 percent above last year's figure. Last year Toshiba Corporation announced that it would reinforce its commitment to the Chinese white goods market in 2003, in order to meet growing demand from increasingly discerning and demanding consumers seeking products that add to the quality of life. The first step to a heightened market presence will be taken in spring next year with the launch of fully automatic washing machines carrying the Toshiba brand name (Muller, 2005).
The biggest challenge of all-the challenge of leading the digital convergence revolution worldwide, and thereby providing digital freedom to all-still lies ahead.
The electronic industry is well-positioned to take on this important global ...Download file to see next pagesRead More
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