The weekend blog: worldwide electronics sales show serious signs of cooling off

By John Keller
Posted by John Keller

Market researcher IC Insights Inc. in Scottsdale, Ariz. is releasing a dismal report on worldwide shipments of electronics systems, which says sales in 2007 will represent the smallest growth since electronics manufacturers recovered from the 2001-2002 downturn in the wake of the 9-11 terrorist attacks and the telecom bust.

Also bad news for our industry, IC Insights is altering its integrated circuit forecasts and 2008 is not expected to be a big year, as believed last year. A year ago IC Insights projected the semiconductor market would grow by 7 percent in 2007 and 20 percent in 2008, but has lowered its IC forecast to 2 percent growth in 2007 in its latest report.

Growth in defense electronics spending, meanwhile, also is starting to cool off after years of growth during the Bush Administration. The 2008 Defense Department budget request contained spending cuts for procurement and research in communications, electronics, telecommunications, and intelligence (CET&I) technologies.

Industry experts also are predicting that overall defense spending has peaked for the time being, and should begin a long-term shallow decline , as the wars in Iraq and Afghanistan start winding down next year and a war-weary Democrat Congress starts looking for other ways to spend the taxpayers money.

In all this doom and gloom, however, folks in our industry should not lose sight of the promise of defense spending. Even when military spending is on the downturn, as it apparently will be for a while, it still represents a large and reliable source of income for technology companies.

Think of the huge ups and downs we've seen in commercial industries like telecommunications and Internet technologies. Military spending is steady and reliable by comparison. Sure, spending in our industry may be scaling back, but it's still a large and promising business to be in.

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The Mil & Aero Bloggers

John Keller is editor-in-chief of Military & Aerospace Electronics magazine, which provides extensive coverage and analysis of enabling electronic and optoelectronic technologies in military, space, and commercial aviation applications. A member of the Military & Aerospace Electronics staff since the magazine's founding in 1989, Mr. Keller took over as chief editor in 1995.

Ernesto Burden is the publisher of PennWell’s Aerospace & Defense Media Group, including Military & Aerospace Electronics, Avionics Intelligence and Avionics Europe.  He’s a father of four, a runner, and an avid digital media enthusiast with a deep background in the intersection of media publishing, digital technology, and social media. He can be reached at ernestob@pennwell.com and on Twitter @aero_ernesto.

Courtney E. Howard, as executive editor, enjoys writing about all things electronics and avionics in PennWell’s burgeoning Aerospace and Defense Group, which encompasses Military & Aerospace Electronics, Avionics Intelligence, the Avionics Europe conference, and much more. She’s also a self-proclaimed social-media maven, mil-aero nerd, and avid avionics geek. Connect with Courtney at Courtney@Pennwell.com, @coho on Twitter, and on LinkedIn.

Mil & Aero Magazine

February 2014
Volume 25, Issue 2
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