This is the 2012 annual market report for semiconductors used in Military and Aerospace, which are considered a single sub segment of the larger industrial electronics application. This report provides in-depth breakdowns in terms of sales and shipment volumes by region, application, individual products, and finally, by supplier share.
Databeans expects that the semiconductor market to the Mil/Aero industry will decline slightly from 2011 to 2012 to just under $2.9 billion worldwide, primarily due to this latest round of budget cuts and the corresponding industry consolidation. However, there will be some modest growth of 4 percent over the next five years. COTS products will experience the mil/aero market's fastest adoption rates, with a CAGR of 6 percent over the next five years. The most noteworthy long-term market trends in this industry include a greater focus on reliability, shorter business cycles, and the ability to operate within ever tightening government budget constraints. All of these trends are leading growing demand for so-called commercial off-the-shelf or "COTS" solutions, in which the end customer purchases and modifies a system instead of buying the custom components to build that same system. Using COTS helps OEMs get their new equipment technologies to the field faster, while also reducing R&D and testing costs.
The market strategies for Mil/Aero suppliers have changed drastically in the past year alone. For the commercial aerospace industry, manufacturers are far more focused on attempting to build up their production capabilities in order to meet the boom in demand for commercial airliners. Meanwhile, for military defense suppliers, a lack of new government funded programs has caused investments in R&D to decline. This is coupled with the U.S. government's new emphasis on unmanned vehicles, surveillance, and intelligence gathering.
Table of Figures