Secondary Market Information - A

Secondary Market Information - a Market Analysis Report & 2) Description of the product and market share Semiconductor industry is the collection of the companies involved in "design and fabrication of semiconductor devices," with the total market share estimated at $235 billion in the year of 2005 which is increase by almost 7% from the total revenues received from the companies in this industry in the fiscal year of 2004. Due to the nature of the product sold in the industry, the life cycle of the industry is very volatile.

The industry has four main sectors: microprocessors, memory, commodity integrated circuit, complex system on a chip. Primary customers (target market) Though the semiconductor industry is very volatile, each of the segments is dominated by one of the key industry buyers and thus the clients cannot exploit bargaining power. The major clients are both the companies and private individuals which consume the most of PCs and cellular phones.

Currently, the chief CEOs in the industry stress, that as the boom for PCs and cell phones evades after the 2007, the industry will not have another product to substitute them and personal demand patterns will shift which will decrease the total revenues achieved by the industry.

The supply in this industry has different trends than demand, it has to be planned in advance and is very research consuming which results short time shortfalls in the stock available for purchase when the demand shifts suddenly following a new trends or increase in personal purchasing power. Currently, in terms of geographic, the biggest demand comes from China which accounts currently for the 20% of the consumed goods of this industry.

4) Major producers (includes competition) Based on total revenues, received by the companies, the number one within this industry is Intel with 15% market share or approximately $35 billions, followed by Samsung Electronics with 7.6% market share, then followed by Texas Instruments of 4.4% and Toshiba with 3.9% market share. 5) Production areas (where production takes place) The current production is outsourced more and more to the areas where the companies achieve cheaper labor costs for average ability workers, and also highly qualified engineers for research programs of the companies.

Thus, the benefit of downsizing the costs will be couples with the total growing demand for these products in these areas and thus the companies that have high presence and market shares there will increase revenues. At the same, to remain the workforce in the U.S., many manufacturers keep the biggest value added functions in the U.S.A. 6) Key inputs (raw materials that go into production).

The raw materials are not the biggest prices input in the semiconductor industry, while still is the biggest part of it and presently the market of metals was booming due to overall industrial recovery in the emerging markets, and together with the increased production of the products within the semiconductor industry.

At the same time, though facilities were not growing at the same rate as the demand for these products was, the semiconductor industry association believes that there is still production capacity and the overall utilization of the capacity is not maximal. 7) Distribution methods The main distribution methods within the industry include retailing, business to consumer model, and business to business model also.

As the business is so big, it is impossible to say in which ways it is the best to optimize the supply chain, especially considering the fact that often the products are sold to the final purchasers through different local dealers, who increase the final purchase price, but at the same time expand the total market presence of the products in different regions.

8) Price level The industry has products in different price ranges to reach the clients of different income groups and to expand the market share to the countries with growing but still rather low purchasing power. That is why decreasing overall costs of production is the main competitive strategy for the companies to remain profitable in the long-term in this industry. 9) Trends in prices Generally, though the revenues of the companies operating in this industry were increasing, this is due to cost management and growing market share, while the.