INTRODUCTION
The past decade has witnessed a tremendous level of progress, technologically and demand-wise, of electronic devices and systems. The progress
spurt has come on two main fronts ¾ increased functionality on a single device unit, and miniaturization of each unit. A critical impact of the
path to electronic innovation is the increased necessity for thermal management. Management of the thermal properties of a system, and designing an
optimal solution to cater to modern power dissipation are the cornerstones of thermal management today. This study is about the market for components
of electronic devices and systems that aid in the dissipation of excess thermal energy. "Thermal Management" denotes this array of
problem-solving design tools and material technologies that systems manufacturers apply to regulate the unwanted heat caused by the normal functioning
of an electronic system. The trend line of the thermal management industry aligns with the development of technology in the semiconductor,
microprocessor and computer industries. For every advance in performance of these systems, there is a corresponding increase in the operating heat
generated by the system. To simply say, however, that demand for thermal management products has increased as the requirements of applications
increased does not do justice to the unique character of this industry. It would probably suffice better to state that the development of thermal
management as an industry is the result of a synergy of solutions constantly engineered to manage excess heat in today's electronic systems. Products
in this report have been grouped into four segment areas - hardware, software, interfaces and substrates. This report looks at the electronic design
software that models and analyzes the thermal characteristics of the design of an electronic system. The hardware segment includes several product
sub-segments. Heat sinks, fans and blowers, fan sinks, heat pipes, and cold plates were chosen for the hardware segment as they are established
technologies and represent revenue markets of significant size. While the interface product line primarily attaches the heat sink to the system,
several other product sub-segments in this technology are being applied to dissipate heat in applications where there is no room for a conventional
heat sink. The categories of interfaces covered in this segment are thermal grease, thermal compounds, thermal pads, adhesive films and tapes, and
epoxy. Finally, the report looks at substrates. The report focuses the analysis of the substrate market on two emerging, package and component level
products: thermally enhanced packages and heat spreaders. STUDY GOAL AND OBJECTIVES The goal of this report is to provide an up-to-date
analysis of recent developments and current trends in the global thermal management marketplace. The identification of significant drivers of revenue
growth in specific product categories is an additional aim. The objective of this kind of systematic research is to quantify the projected impact of
the forces ¾ from within and from outside ¾ at work on this industry today. REASONS FOR DOING THE STUDY The development
within the thermal industry is one of the most interesting sub-plots of the rapid innovation in the high-tech industry. As pressure continues to
achieve higher levels of device integration while reducing cost, size and complexity, the issue of managing heat and power dissipation has become very
significant. Plus, economic and market forces are fueling the market. All of which makes it pertinent to comment on current trends (market and
technology), as well as to assess potential breakthroughs in the near- and long-term future. CONTRIBUTION OF THE STUDY AND FOR WHOM The
information presented here is for suppliers participating in the thermal management market with a vital interest in the market potential of a specific
technology in one of the product segment markets. This study should also be of interest to companies in the electronic materials, software or other
industries, that have an interest in the potential of their product in a thermal management application. In addition, because of this report's
business focus, it should be of use to executives and business managers as an up-to-the-minute guide to current conditions that are expected to be
significant in tomorrow's market. SCOPE AND FORMAT The scope of this report is broad, and covers several product areas. The individual
materials, hardware and software product segments are presented in terms of market size and revenue trends. The revenue forecasts are explained in
terms of the key market issue for a specific product segment, and are projected for five years from 2003 to 2008. The application sections features
forecasts for the most important applications by product. The technology discussion concentrates on trends that will develop more significantly during
the forecast period. The report also includes a discussion on the competitive aspects of each product segment, along with several successful
suppliers' strategies in the market. A current industry directory, a survey of the U.S. thermal management patents from 2000 to 2003, and profiles of
a selection of the leading thermal management suppliers are also included. METHODOLOGY Research for this report was conducted via a number
of data channels. The primary sources of information were Internet searches and industry association data, and interviews conducted with thermal
management component suppliers, custom engineering companies, and manufacturers of representative applications. In addition, other secondary sources
were consulted for the report, including reviews of industry journals and publications, product literature, white papers and technical journals, and
financial reports for industry suppliers. Internal sources included an earlier report from BCC on thermal management technologies. Noteworthy here
is to elucidate the approach used to deduce growth projections for the thermal management industry, especially considering its relationship to the
overall high-tech electronics and semiconductor industry. The methodology was as follows:
- First, we tabulated annual revenue numbers for the overall high-technology industry, the semiconductor business, and for thermal management
products for the past 15 years (1998-2002). The goal was to determine trend lines, potential drift cycles, and, most importantly, relationship
formulae between the industries. Using the historical data, we were able to decipher a relationship equation between the thermal component segment
revenues and the high-tech industry revenues.
- Next we assessed extraneous factors, such as:
- Economy (for example the slowdown over the past few years)
- Vacillation in market demand ¾ downturn in telecom and rise in auto, for example
- New technology innovation in the end-use markets (signifying greater feature demands on the thermal management arena). The most popular
example here was the pervading Internet phenomenon.
- Geographical trend changes. For example, the rise of Asia-Pac as a major consumer of electronics.
- These key pointers were factored into the original relationship equation to get a more realistic and customized growth rate trend, especially
catering to the varying demand and growth projected for different end-use applications within the thermal management landscape.
- Finally, the end results were compared to the initial relationship matrix to ensure that the predicted thermal industry numbers are aligned with
estimated projections that have been stated for the semiconductor and overall technology industry to a reasonable extent.
The stated approach can be best elaborated with a practical sample. To take an example, the revenues for semiconductor shipments over the last
15 years (starting 1988) showed an aggregate annual growth rate (AAGR%) of 8.4%. Correspondingly, the aggregate growth of thermal management revenues
over the same period came in at 5.5%. The key parameter for our purposes, the coefficient of relation, between total thermal management and total
semiconductor was, therefore analyzed as being equal to 0.66. As a next step, BCC researched the semiconductor revenue forecasts as projected by the
Semiconductor Industry Association (SIA). The association projects semiconductor growth at 10.8% over the 20-year period from 1988 till 2008. Using
the same coefficient of relation that we deduced before, BCC estimated the 20-year AAGR for thermal management to be around 7.1%. The aggregate growth
for 20 years resulted in the AAGR for 2003-2008, and annual growth rates from 2003 through 2008, based on annual variances in internal and
extraneous-to-industry factors, such as demand, innovation, system consolidation, etc. To validate the methodology and the numbers, BCC computed the
same exercise by drawing a comparison between thermal management revenues and another closely related market, microprocessors. Typically, BCC saw a
coefficient of relation between thermal management and microprocessors in regards to aggregate growth from 1988 of 2003. By plotting the same ratio
across the forecast period, we validated our projected numbers. The ratio of aggregate growth for thermal management from 1988-2008 to that of
microprocessors for the same timeframe came out at exactly the same number, i.e., at 0.91. | 
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