Semiconductors, Emerging Markets, and the Self-Interest of Survival

Electronics News (Wilson) - Some time ago, as the storm of recession broke over the industry, we encouraged companies to look quickly to developing markets for demand that was not based on conspicuous consumption. Since then there has been a devastating collapse in end-user demand across the industrialized nations. In contrast, countries such as China and India appear to be using their banks to support their citizenry—rather than committing ordinary citizens to enrich the banks.

The Financial Times article also quotes David Michael, head of Boston Consulting Group's globalization practice in Beijing: "Many industries are at the tipping point where 50 percent or more of global demand is in emerging markets." There is a simple message here. If your business plan is to be part of a supply chain that ultimately brings expensive discretionary goods to developed markets, you have a short-term problem rapidly turning into a long-term strategic error. You are specializing away from the market growth.