Innovation-inspired confidence fuels the future, rather than pessimism.
As 2012 comes to a close, general pessimism abounds around global
economies. Given the challenging financial conditions in the United
States, the ongoing European debt crisis and a slowing Chinese
economy, thereís an inclination to slow down or pause until there is
a clearer market picture.
But in our market, where itís essential to be first to market with
innovative products, we have no choice but to forge ahead or run the
risk of being left behind. Many of the decisions that we make this
year will have long-term implications, since technology is never
static and the product development that we do today will be designed
into end products 2 to 4 years in the future.
So in spite of any potential hazards in 2013, too many to name, we
need to continue to develop compelling new products. Over the past
three years, the overall analog market registered a 5.4% compound
annual growth rate. This growth was the result of several concurring
trends, particularly in the automotive and industrial electronics
markets. With our laser-like focus on these markets, we were able to
grow at a significantly faster pace, a 9.8% compound annual growth
rate over the same period.
We recognized nearly seven years ago that the automotive and the
industrial markets were entering an innovation cycle. As a result,
we embarked on a strategy to emphasize these markets in terms of
product development. This strategy has been validated by the fact
that these were among the fastest growing segments of the analog
market during this period. Although the past 3 years have been a
period of economic turmoil, the industrial and automotive segments
of the global analog markets have grown nearly twice as fast as the
overall analog market. In the last three years, our sales in the
industrial and automotive markets showed compound annual growth of
15.9% and 40.6%, respectively and represent nearly 60% of total
Industrial, automotive focus
Our decision several years ago to focus on the industrial and
automotive markets was not universally embraced, with some
questioning the wisdom of forgoing the very visible consumer markets
for the relatively obscure industrial and automotive markets.
However, time has validated our decision. Once the decision was
made, new product development and sales efforts were redirected to
these focused end markets.
We have seen automotive sales grow significantly faster than the
overall market. It is remarkable that this growth came during a
period of nearly unprecedented economic uncertainty, where the
number of vehicles sold annually has been highly volatile. So the
success in this market has been less about the actual number of
vehicles sold, but is more closely connected to the ever-expanding
electronic content in cars.