Commentary: Electronics outlook seems dreary; in fact it's the opposite

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, there’s an inclination to slow down or pause until there is a clearer market picture.

But in our market, where it’s 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 sales.

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.