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The growing complexity of consumer electronics devices means they rely increasingly on specialised, custom-designed and expensive large-scale integrated circuits rather than cheaper, off-the-shelf chips.
Last week Sharp launched a hard-disk based video recorder that can stream recorded programmes to users across the Internet, keep a family photo album, publish photos on the Web and accept incoming images from mobile phones with cameras.
Fujio Nakamura, a corporate advisor to Matsushita, which manufactures products under the Panasonic brand name, said that in Japan 59% of existing audio-visual products were digital but that figure was expected to increase to 66% in 2004 and 73% in 2006.
This would represent a rise of around 75 million units over four years and, with each using more complex chips than before, it is easy to see why semiconductor companies are keen on the prospect of what Samsung president and chief executive officer Yoon Woo Lee called a "paradigm shift".
Lee saw the electronics industry moving from the Internet era, where connectivity and intelligence was built into certain products, to the "ambient intelligence society" where everyday objects possess such capabilities. "There are three key words for the era: mobile, network and ultra broadband," he said.
Lee also saw automotive electronics as a huge area that started to develop only last year. In 2002, around 19% of a new car's price was for its electronic systems, although Lee predicted this could rise to as much as half the purchase price of a car in the future.
Toyota director Hironobu Ono proved Lee's prediction was not far off as far as his company's Prius - gas/electric hybrid cars - are concerned. "Forty-seven percent of the cost of the Prius is electronics and this percentage is expected to grow," he said.
Beyond the stereo system, advanced car electronics includes safety systems, such as collision avoidance and pre-crash brake assistance, a night view system to enhance visibility in the dark and a monitoring system to provide views all around the vehicle.
In China, the consumer electronics sector already outranks computers and telecommunication in terms of demand for integrated circuits, and Richard Chang, president of contract chipmaker Semiconductor Manufacturing International (SMIC), saw digital consumer electronics as the next market driver.
"The digital camera market itself is not so big but people want to print those photos so they need a printer, send the photos so they need a computer, and store them so they need some type of storage device. The peripheral market is large," he said.
All of this adds up to increased demand for more complex semiconductors, representing good news for the semiconductor industry, which is in the middle of a shift from 200mm diameter wafers to 300mm wafers. Investment in a new 300mm plant is close to $2.5bn, said Samsung's Lee, and the time it takes to get back the investment is becoming longer and longer.
The slump in the Internet and telecommunication industry, coupled with a fall in the price of DRAM (dynamic RAM) chips for computer memory, has also cut revenues at the companies leaving them searching for a new source of revenue.
If the digitisation drive continues and such products play more and more an important part in our lives, it might just be what the semiconductor companies need to continue fuelling growth in their industry.