Pssst, looking for growth?

I admit it.

Sometimes I’m the first one to think and speak about the semiconductor industry as if its just one, big, monolithic entity.

But the reality is that each segment, each region, each customer, and even each fab is operating on it own dynamic. Sure, we tally them all open for book-to-bill numbers, forecasts and financials, but operationally we need to be technology-specific, fab-specific and customer-specific.

Which brings me to my point: things are hoppin’ in Singapore. It is estimated that capital spending will decline by 10% to 15% globally in 2008, but the semiconductor equipment market in Southeast Asia is expected to grow from $3.05 billion to $3.13 billion in 2008. The assembly and test equipment market represents about 50% of this market. In materials, the Southeast Asia market will grow from $6.8 billion to close to $7.6 billion—an increase of about 12%. The packaging materials segment within this market is expected to reach $5.0 billion in 2008, surpassing North America. For more information on the region, check out the market summary done by the SEMI Industry Stats team.

In addition to front-end and backend semiconductors, Singapore is also hot on PV. REC and First Solar have announced major plants for the region and government planners and investors see PV as an area for growth.

SEMICON Singapore on May 2-5 is nearly sold out and we expect the show to be like the market and the weather: hot.

I am so impressed with our Committees and the great job they did in putting the program together. We have Scott Kulicke giving one of the keynotes, and the packaging and test programmes (noticed how I used the Queen’s spelling) are deep and targeted as usual. I know the Tuesday PV session will be standing room only.

In addition to the show’s normal strengths in the backend, SEMICON Singapore is also a great opportunity to see market front-end equipment and materials. 38% of the attendees are from IDMs and foundries, twice that of outsourced test and assembly firms. Attendees interest in wafer processing products is comparable to other SEMICONs and Singapore attendees don’t attend any other show. Like all SEMICONs, Singapore serves a huge regional market of buyers and specifiers virtually unreachable by other medium.

If you need more information on SEMICON Singapore or would like to meet at the show, please let know.

SMECS- Sales and Marketing Executive Council

I had the honor of going before the Sales and Marketing Executive Committee (SMECS) last week and presenting our plans and programs for SEMICON West. SMECS is a special interest group of SEMI that represents sales and marketing leaders in North America. They organize our highly successful Silicon Valley Lunch Forums and have been the source for many SEMI policies and programs such as the Strategic Business Conference, the TIS Award and the Bob Graham Award for marketing excellence in the industry.

SMECS is comprised of a fascinating collection of industry veterans and new executives. Some of their members were intimately involved in the birth of the industry and have had ringside seat at every major milestone for the past 20 years. Other members are newer to the industry and looking to make their own mark on the business. Together, they possess a wide spectrum of expectations for what an association and an event should be doing to advance their interests. As a sales and marketing group, they have strong interests and strong opinions on SEMICON West. I was looking forward to the meeting because I am proud of how we manage the show and wanted to give them some insights into the level of effort and the degree of sophistication we take in executing the event. I also urgently need to take advantage of the knowledge, contacts and experience they can provide to help make West a stronger show (and SEMI a better organization).

I gave them a historical overview of the show and presented key show facts on industry segments, attendee attitudes and opinions, and exhibitor satisfaction data. I told them how we are managing the show according to this data, and how we have broken the show into different segments so we can better target attendee and exhibitor needs. I think they were satisfied with our approach to show management, but it wasn’t a love fest. They are a diverse and opinionated group with strong opinions and valuable perspectives.

Among the issues that some were most concerned with was the elimination of the TIS Award (as mentioned, a SMEC developed program) and its replacement by the Best of West Award. I explained that I felt that unfortunately TIS never achieved widespread visibility, recognition and value for either exhibitors or attendees. I also explained that the objectives of TIS were perhaps not consistent with exhibitor, attendee or member priorities for a technology award program. The TIS Committee and SEMI tried, but it just never caught on. We hope that the more open Best of Award achieves greater prominence and better helps our members and attendee interests in seeing West remain the premier new product launch venue in the industry.

An important outcome of the meeting was the preliminary agreement to utilize SMECS in the planning design of SEMICON West in the critical August-September time frame (right after 07 West, when we set meaningful strategic objectives for 2008). I’m looking forward to working closer with SMECs to ensure the finest possible event for attendees and exhibitors and members.

Join SMECS
If you are in the sales and marketing position for a SEMI member company, you can gain valuable contacts and influence over SEMI programs by joining SMECS. For additional information, contact:

SMECS Committee Membership Contact Information
Collin Luttringer, Membership Chair
KLA-Tencor
P: 408 875-0603
collin.luttringer@kla-tencor.com

Cai Guo Qiang Performance Art

I was in New York last week and was fortunate to see the Cai Guo Qiang exhibit at the Guggenheim. For his work, Cai draws on a wide variety of materials, mediums and traditions—elements of feng shui, Chinese medicine and philosophy, images of dragons and tigers, and gunpowder, lots of gunpowder. Since September 11th he has begun using explosives both as metaphor and material. His explosive works, like Black Rainbow, become momentary, elusive demonstrations of alchemy and violence. His also uses gun powder residue as a medium for "painting". He will be the creeative director for the opening ceremonies at the Beijing Summer Olympics.

I share it with you here because it reminds me of the overwhelming power of human imagination. This gift can be used by artists and activists like Cai, and it can be used in business. We sometimes forget how powerful provacative imagination can be in business. We forget that humans make decisions with two halves of a complex brain. We forget we are hard wired for emotion and beauty. We underutilize art and underestimate its force to change opinion and open the mind to new ideas.

Trade shows managers are in the ideal position to utilize three dimensional art to transmit business-related messages. The best trade show exhibits are art, "made with the intention of stimulating the human senses as well as the human mind, by transmitting emotions and/or ideas". What better place to source inspiration for your next business project than from artists like Cai?

Cutting Marketing Budgets Are Not the Way to Manage A Recession

At the SEMI Industry Strategy Symposium (ISS), held in Half Moon Bay, California, Stephen Newberry, president and CEO of Lam Research, discussed the state of the industry and today’s perplexing financial results that can be best described as profitless prosperity. In discussing causes of the problem, Newberry said, “Everybody is pursuing cost as solution…in a race to the bottom.” In presenting historical and segment financial results, he concluded, “Clearly cost is not the significant factor relative to generating operating profit.”

While Newberry was speaking about chip makers, I would argue that cost reduction is also not the solution to equipment and materials makers current financial challenges. In a recession, market share gainers are invariably the last to cut the budgets that deliver and communicate their winning differentiation. Market leaders create a winning future by understanding what their customers want, meeting those needs through product and service development, and effectively communicating their differentiation.

Communications is a critical part of the formula: you can’t “just build it and they will come.”. Customers need to know, understand and value the benefits of your product and services. There are a thousand differentiating variables for customers to focus on; they may choose to concentrate on those which give you an advantage or your competitors. Its not always rational, or fair, and its clearly not always about who “has the best technology.”

In a recession, companies that have a clear understanding of their competitive advantage—and have confidence in it—gain share and come up on the upturn stronger and more profitable than those that simply manage costs. These are the companies that see marketing and communications as a necessary instrument of differentiation, not as a luxury only affordable during good times.

After 30 years of SEMICONs, we have seen upturns and downturns come and go from a unique perspective. We see trade show budgets that rise with confidence and creativity when the market is simply making capacity buys, and shrink when buyers are making strategic decisions about partners and sole sourcing. We see successful companies communicate confidently and effectively with the market when their competitive advantage can best be leveraged, not just when it is more financially amenable.