After a strong increase in 2018, O-S-D growth is expected to pull back in the next two years because of slowing economic growth, but optoelectronics, sensors/actuators, and discretes are each forecast to reach their third straight year of record-high revenues in 2019.
Combined sales of optoelectronics, sensors and actuators, and discrete semiconductors (known collectively as O-S-D) increased nine percent in 2018 to reach a ninth consecutive record-high level of $82.4bn, according to IC Insights’ new 2019 ‘O-S-D Report: A Market Analysis and Forecast for Optoelectronics, Sensors/Actuators, and Discretes’. The new annual report shows total O-S-D sales growing six percent in 2019 to reach a record-high $87.1bn.
For the second year in a row, all three segments of O-S-D achieved all-time high sales in 2018 with different growth rates being driven by a variety of factors and market conditions in the year, says the new 350-page report. O-S-D products accounted for 16% of the world’s $504.1bn in total semiconductor sales in 2018 with the rest of the revenues coming from integrated circuits.
The 2018 increase in total O-S-D sales was nearly 1.5x the average annual growth rate for these semiconductors since the mid-1990s. The O-S-D Report’s five-year forecast shows revenue growth in optoelectronics, sensors/actuators, and discretes declining in 2019 and 2020 with the global economy slowing in the next two years. All three O-S-D market segments are once again forecast to reach record-high revenues in 2019 with a ‘soft landing’ expected to occur in most product categories during the slowdown in 2020.
While the expansion of total O-S-D sales was strong in 2018, this diverse group of semiconductors displayed a mixed bag of substantial and below-normal growth rates with average selling prices (ASPs) heading in different directions in the three market segments during the year, based on the findings of the new O-S-D Report.
Strong unit growth in optoelectronics (+18%) offset a significant drop in ASPs (-7%) to lift revenues in the opto market by nine percent to $40.3bn in 2018. Meanwhile, inventory corrections and pullbacks in purchases of many sensors and actuators held back sales growth in this market segment, resulting in a modest six percent increase to $14.7bn in 2018.
For the second year in a row, the commodity-filled discretes market increased by more than double its historical average annual growth rate, rising 11% in 2018 to $27.4bn. Discretes sales were exceptionally strong last year because continued shortages in power transistors, diodes, and other widely used devices, which caused the ASP for all discretes to surge by 12% in 2018, says the new O-S-D Report.
