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MUNICH — Demand for semiconductors used in vehicles and related gear will drop 25% from its peak of $20 billion last year, a new research report asserts.

It will take until 2013 for market revenues to rebound past $20 billion, research firm Databeans adds. The market will grow at a CAGR of 8.5% through 2014, reaching $22.5 billion, the firm forecasts.

A drop in demand for autos will be partially offset by higher electronics content in each new vehicle. The average value of electronics content will rise to 14.8% by 2012, up from 13% today, boosted by telematics, infotainment and safety applications, and environmental regulation compliance.

SINGAPORE -- Singapore's electronics output plunged 43.1% year-over-year in January, the government said today.

Exports fell 35% for the month, the Economic Development Board said.

The drop in electronics production pulled the overall manufacturing output down 29.1% the EBD said.

Manufacturing accounts for about 25% of the nation's economy, and most of its manufactured products are exported.

LONGMONT, CO -- EMS firm Premier Manufacturing and Supply Chain Services tomorrow will hold an open house for its expanded and remodeled plant here.

The open house takes place at 1 p.m.

The 10-years-old company operates from a 22,000 sq. ft. plant, in which it has three SMT lines. It assembles boards for medical, computers and peripherals, industrial and telecom applications.

HELSINKI – Incap Group reported 2008 revenues rose 13% to 93.9 million euros, but the net loss increased 390% to 5.4 million euros.

The operating loss was 3.6 million euros, lowered by 1.8 million in one-time charges related to restructurings.

It is not clear what percent of sales stem from contract electronics assembly services, but it is generally considered to be a large percentage of the overall revenue. The company's Incap Contract Manufacturing Services subsidiary, the former TVS Electronics, was acquired in June 2007.

SMYRNA, GA -- Chats on building solar-related product, mechanical and chemical cleaning, and solutions to troublesome SMT defects are among the highlights as Virtual PCB enters its second day today.

EL SEGUNDO, CA – China’s automotive electronics revenue in 2008 expanded by 11.7%, down 23 points from 2007, according to iSuppli Corp.

Production of automotive electronics equipment in China amounted to $13.6 billion in 2008, up 11.7% year-over-year. While the market expanded, this represented a major decline in growth from the 34.7% rise in 2007. The automotive electronics equipment area consists of portable navigation, infotainment, power train, safety and control, comfort and convenience, body electronics, security systems and other functions.

“This deceleration in 2008 mainly resulted from the poor performance of the automotive infotainment segment,” said Isaac Wang, industry analyst for China Research at iSuppli. “In 2007, automotive entertainment represented 48.7% of China’s overall automotive electronics market. This portion shrunk by 2.8 points in 2008. A rapid decline in international equipment orders put many of China’s automotive electronics suppliers in a difficult situation.”

Nevertheless, navigation applications maintained high growth, says the firm.

In 2008, portable navigation device revenue increased 29.7%, while in-dash navigation applications rose 19.3%. Many Chinese car owners already have adopted electronic navigation as an integral part of their new driving lifestyles. This trend will boost telematics players, especially those supporting intelligent transportation system applications.

Because of the international economic recession in 2008 and into 2009, the global automotive electronics industry will not rebound until after 2010. iSuppli expects it will not climb back to its revenue height until 2012.

Fortunately, the situation in China is not as serious, says the firm. Although the nation’s auto electronic equipment annual growth rate is set to drop again in 2009, it will remain positive at 6.5%.

This relatively stable performance enhances China’s position in the global market. China’s share of the global automotive electronics market revenue was 13.5% in 2008, and is expected to rise to 18.1% in 2012.

China’s market will play a critical role, and international firms will expand their presence and activities in the nation.

Competition will be much greater in China with leading multinational firms, such as TRW and Lear, which have done well in the global market, but have not been so successful in China thus far. Many new domestic entrants also are expected, mostly in the infotainment segment.

China’s automotive infotainment market saw two major changes during 2008: There was a greater focus on OEM customers and on the domestic market.

The export market accounted for more than 62% of all Chinese-made automotive infotainment products in 2007.

However, in 2008, the sudden arrival of the financial crisis in the US triggered mass international order cancellations. Chinese equipment vendors suffered severe losses and the export market fell sharply, says iSuppli. Exports contracted 8.6% last year. As a share of China’s automotive infotainment market, exports have decreased to 41%.

Infotainment products targeting the aftermarket used to account for 69% of the overall total in 2007. However, the economic woes of 2008 negatively impacted international consumption. The aftermarket shrank to a 60% share at the end of 2008.

“Amid these rapid changes, the most outstanding automotive electronics firms are not the largest or strongest ones, but those players who are making the most positive and decisive responses,” Wang said. “Companies need to quickly adopt the most suitable business models as market and general economic conditions shift.”

China’s automotive electronics market is immature and applications are developing at different rates. In certain segments, such as low-end infotainment, superfluous products are common. Meanwhile, in most other segments, supply still lags demand, sometimes by a wide margin. For new market entrants in China’s automotive electronics industry, it is important to find market segments or product niches with less competition, Wang noted. Where the gap between demand and supply is larger, market conditions will be more favorable and potential profits will be higher.