While the global standard logic market will decline slightly in 2013, growth will resume in 2014.Semiconductor buyers can expect leadtimes for standard logic to remain stable through the year, but prices will increase slightly despite overall sluggish demand.

Although supply and demand is balanced, standard logic prices will increase because of overall inflation not because of rising demand or cutbacks in capacity. Despite the increase, standard logic sales in 2013 will decline 1.5% to $1.63 billion compared to $1.65 billion in 2012, according to researcher IHS.

Suppliers say standard logic demand so far this year is not much different than last year.

“All in all, we are not seeing growth compared to last year, but we see some positive signs,” says Alberto De Marco, business unit director at STMicroelectronics, headquarter in Geneva, Switzerland.

“The mobile segment is obviously doing much better than any other segment. But we are not big in that segment,” he says.

With standard logic, STMicroelectronics focuses on the consumer electronics, industrial and automotive segments. For those segments, “demand has not changed much compared to last year,” says De Marco.

Growth resumes in ‘14

Although standard logic demand will be weak in 2013, the good news for suppliers is that there will be a “resumption of growth in 2014 and pretty much continuing beyond that,” says Jordan Selburn, senior principal analyst, consumer electronics for IHS.

“That being said, we are not talking about huge amounts of growth on a dollar or percentage basis. Basically an average of a few percent per year,” he says.

Selburn says the market will rise to $1.68 billion in 2014 and grow to $1.73 billion in 2016. He says the decline in 2014 is due to falling PC demand.

“What may be the biggest single factor for the decline of standard logic in 2013 is the rise of media tablets,” he says. “The PC market, particularly the mobile PC segment, has always been one of the largest consumers of standard logic. The more people buy a media tablet instead of a PC, the less standard logic gets consumed."

Media tablets use less standard logic than PCs, he explains.

However, some suppliers say media tablets, along with smart phones and other “mobility market” handheld devices, are growth opportunities for standard logic.

“Standard logic is not going away. The mobility market is driving year to year growth,” says Richard Curtin, general manager, standard logic product line, for NXP Semiconductors, based in Eindhoven, Netherlands. “There's still a need for small-function discrete logic.”

Cliff Lloyd, international product marketing manager for NXP, notes that the mobility market “is not strictly smart phones and tablets.” It also includes handheld devices such as scanners used on production lines, in supermarkets and other stores and businesses.

“What we have focused on in recent years is reducing the customer's application costs,” says Cliff Lloyd, international product marketing manager for NXP Semiconductors.“Companies that design these products may use application-specific integrated circuits (ASICs). They will use standard logic as glue logic to connect the various ASICs together in the various applications. They need buffers, translators or something of that nature,” says Lloyd.

Auto to drive sales

Selburn says automotive and industrial applications will also drive standard logic the next few years.

“Automotive use standard logic has gone up about 20%,” he says. “That market is a driver but is small compared to PC.”

Deepali Chugh, product marketing manager for Texas Instruments, based in Dallas, says that TI is seeing standard logic demand from the industrial segment improving compared to last year.

“Demand for standard logic in industrial equipment is growing across the board," she says.

She notes that the industrial segment is very broad and includes test and measurement equipment, building automation, scanners, medical equipment and flow meters in other equipment.

While global standard logic revenue will decrease in 2013, there will be a modest increase in prices, according to Selburn.

“There won’t be large increases, only about half a percent to 1 percent each quarter,” Selburn says.

He adds that supply and demand for standard logic “are fairly well-balanced so these price increases are kind of in line with the consumer price index.”

Price increases will likely be temporary as buyers at large companies will negotiate to get lower prices.

Some suppliers are working with OEM customers to reduce costs for standard logic.

“What we have focused on in recent years is reducing the customer's application costs,” says Lloyd. “We have addressed that by our combination logic devices. Instead of buying two components for printed circuit board, we combined the two into one.”

He says such integration reduces purchasing and inventory costs for an OEM because the OEM “only has to carry one component.” The customer also has lower placement costs on board.