Innovation Continues amid Covid-19 Pandemic in Semiconductor & Electronics Industry

Several companies have seen a drop in sales in past months due to a decrease in the demand from the automobile industry as this sector consumes the semiconductor and electronic equipment. However, innovative product development activities have been continued.

The use of semiconductor and electronic equipment has increased a lot in various applications in different sectors over the past few years. Several companies are developing new methods to manufacture sustainable semiconductors. Market leaders are also planning to attract companies to collaborate with them and develop their plants in their countries to make themselves economically strong. The automobile industry is demanding semiconductor and electronic equipment in a huge amount. In May, 2020, European semiconductors companies' revenue dropped a lot in the first quarter, as stated by a European company. It happened due to Covid-19 pandemic.

Market players stated that there is an uncertainty as they don’t know when the whole market will recover and the companies will be able to run their businesses smoothly and efficiently. The value chain of this industry has suffered a lot due to Covid-19 pandemic. There are chances that semiconductor industry will thrive back after the pandemic is over. Recently, it is known that two-fifths of the total cost of the car is incurred in electronic systems in the new cars. The cost of semiconductors has also risen as compared to what it was five to six years before. The use of electronic systems will increase with time as users love them and it’s easy for companies to install them in automobiles.

Allied Market Research offers a detailed analysis of various markets in the semiconductor and electronics category along with impact of Covid-19 pandemic for each market.

• Decline in sales

The sale of semiconductors and electronics dropped in May, 2020. The reason behind the dip in the sales of semiconductors and electronics is the Covid-19 pandemic. The production of goods has stopped all over the globe. People are not demanding new things the way they used to demand before this pandemic. In April, 2020, the sale of semiconductor dipped down by 1.2% as compared to March, 2020. The demand for semiconductors and electronics is majorly created by the automobile sector and Covid-19 has drastically hit the automobile sector. There is a possibility that the demand will increase again in the coming months and the sales will rise as the economies will gain new vigor.

• Innovation

Scientists are developing certain methods to produce sustainable semiconductors. Novel Reaction System is trying to produce semiconductor molecules that can change the semiconductors the way we know today. Talking about the electronics field, organic solar cells will be the key to innovation. The company is focusing on C-S bonds to produce useful semiconductor molecules. These bonds are significant and abundant in the pharmaceuticals and materials science fields. The companies are getting enough time and resources to develop further on their innovative products even though the operations in the semiconductor and electronics industry have been paused during the lockdown.

• A Game-Changer for Few Countries

Covid-19 has been a game-changer for several countries. Countries are planning to pull out their domestic companies from China. Recently, Japan took a step for that. Now companies are searching for a new country where they can set up their plants. India, the immediate neighbor of China, started to attract these companies to set up their plants in the country. The government of India launched a program to boost investment in the electronic sectors. Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) was introduced in April, 2020 to offer a monetary stimulus of 25% of capital expenditure. The monetary stimulus is offered for the manufacturing of goods that form the supply chain of electronic goods. The Indian government is also planning several other strategies to attract more companies to set up their base in the country instead of China and Taiwan, where most of the electronics hardware companies are right now. India has a large human capital tool which makes it a great platform for the companies to start a business in this country. At the moment the U.S., Japan, and Taiwan fulfill the demand for semiconductors through imports from these nations. Other companies such as South Korea, Mexico, and other Asian countries are also developing certain strategies to attract companies. Covid-19 pandemic has worked as a blessing in disguise for these nations as several countries are losing faith in China.

• Importance of Miniaturized Integrated Circuits

The integrated circuit is said to be the miniaturized aid for electronics. Integrated circuits portray features such as high reliability, low cost, high processing speed, and low power equipment. Modern integrated circuits have entered communication systems, military applications, and industrial applications. It is due to its high reliability and compact size. These integrated circuits in the modern world are used as machine tools and vehicle operating systems. They can also be reprogrammed without redesigning the control circuitry. The demand for miniaturized aid has increased a lot and as everything is changing due to Covid-19 crisis. One of the European companies stated that change is must and the pandemic has shown this completely. So, miniaturized integrated circuit is an important innovation for which companies would be looking for after the pandemic gets over. The IC microcomputers are inexpensive. Integrated circuits are at the heart of rapid development in telecommunication sectors. These are also designed to enter different important sectors such as telecom, computer, aerospace, and others.

• Future Outlook

The future of the semiconductor and electronics industry mostly depends on the Covid-19 situation. If this situation ends soon, the demand for semiconductors and electronics will go back to normal. But if it lasts longer than expected, then market players of this industry have to wait till the situation goes back to normal. As we all can see, the demand for many products has fallen, which has led to decrease in the sale of these products. Companies will come back with innovative methods to leave their footprints in the market.

 

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