The Zacks Electronics – Semiconductors industry has been benefiting from the solid adoption of laptops, notebooks, office equipment and network peripherals worldwide. Increasing demand for high-volume consumer electronic devices such as digital media players, smartphones, tablets, and the strong uptake of efficient packaging, machine vision solutions and robotics have been persistently benefiting industry players like Advanced Micro Devices (AMD – Free Report) , ASE Technology (ASX – Free Report) , Diodes (DIOD – Free Report) and Cirrus Logic (CRUS – Free Report) . Additionally, the growing proliferation of AI, Machine Learning (ML), Blockchain, Internet of Things (IoT), Augmented Reality/Virtual Reality (AR/VR) and industrial revolution 4.0 (which focuses on interconnectivity and automation) should continue to drive the industry’s growth.
The Zacks Electronics – Semiconductors industry primarily comprises companies that provide a wide range of semiconductor technologies. Their offerings include packaging and test services, wafer cleaning, factory automation, face detection, and image-recognition capabilities to develop smart and connected products. The industry participants primarily cater to end-markets constituting consumer electronics, communications, computing, industrial and automotive. Notably, the companies are increasing their spending on research and development in order to stay afloat amid technological advancements and changing industry standards. The underlined industry is experiencing solid demand for advanced electronic equipment, helping its participants increase their investments in cost-effective process technologies.
What’s Shaping the Future of the Electronics – Semiconductors Industry?
5G Prospects are Key Catalysts: The growing deployment of 5G holds near-term prospects for the industry players. An uptick in demand for 5G test solutions required for 5G deployment is another major positive. The growing number of high-speed data centers worldwide, which require ultra-fast internet 5G promises to deliver, is another tailwind. Increased connectivity and technology use in consumer electronics through IoT, AI, robotics, AR/VR, and others further set the demand for 5G. Given the upbeat scenario, the industry is anticipated to remain on the growth trajectory, backed by efforts to strengthen 5G.
Smart Devices Aiding Computing Demand: Smart devices need computing and learning capabilities to perform functions like face detection, image recognition and video analytics capabilities. These require a high level of processing power, speed, memory and low power consumption. These also require better graphic processors and solutions, which bode well for the industry. Graphic solutions help increase the speed of rendering images, and improve image resolution as well as color definition.
Prospects Around Advanced Packaging Solid: The increasing demand for miniaturization, greater functionality, lower power consumption, and improved thermal as well as electrical performance is driving semiconductor packaging as well as test technologies. The growing requirement of advanced packaging is gaining traction in the semiconductor industry, which is a key catalyst for the industry participants.
Zacks Industry Rank Indicates Impressive Prospects
The Zacks Electronics – Semiconductors industry is housed within the broader Zacks Computer and Technology sector. It currently carries a Zacks Industry Rank #45, which places it in the top 18% of more than 250 Zacks industries.