After Health Care, Good Luck Energy Policy

Immediately following the Copenhagen climate change summit, former governor of Alaska Sarah Palin effectively used Twitter’s 140-character limit to ridicule climate change legislation:

"Copenhgen=arrogance of man2think we can change nature's ways.MUST b good stewards of God's earth,but arrogant&naive2say man overpwers nature," said Palin to the world.

In a recent Op-ed for the Washington Post, she was more specific:

"The last thing America needs is misguided legislation that will raise taxes and cost jobs – particularly when the push for such legislation rests on agenda-driven science," Palin wrote. "Without trustworthy science and with so much at stake, Americans should be wary about what comes out of this politicized conference. The president should boycott Copenhagen."

I don’t want to enter into ideological debates in any country, with any faction, with any member, on any issue. And, I’m not an expert on current US politics and the legislative process. I care about policy--and these comments by Palin illustrate to me why any meaningful and effective energy policy in the US for the foreseeable future will be impossible.

This isn’t good news for SEMI PV Group members serving the solar industry. It isn’t good news for high-technology companies in Silicon Valley and other areas looking to transition from semiconductors, biotechnology, materials sciences, IT, and a host of other segments into Clean Tech. In my opinion, it isn’t good news for higher education, for job creation, US growth stocks, and US innovation.

I presume that energy policy will follow much of the same course as the recent health care legislation. Republicans will fight any comprehensive bill attempting significant change in fossil fuel demand or government spending on renewable energy. They will do so whether or not they agree that reducing reliance on foreign oil is a good thing, whether they believe climate change is a reality, and whether the possibility that US technology companies can lead the world in emerging Clean Tech markets.

Republicans will fight major energy legislation primarily because the dysfunctional political environment forces them too. Because leaders like Sarah Palin make it impossible for them to support solar power and renewable energy (except biofuels, of course). Tragically, good policy is always the first victim of bad politics.

The fact is there is a global renewable energy industry rapidly developing. Leaders in this industry will invariably come from countries that have developed an aggressive public-private partnership supported by appropriate renewables demand incentives in the local market. It’s no surprise that leaders in wind energy come from Denmark, and leaders in solar power and PV equipment often come from Germany. One can argue from a philosophical perspective on the value of free-markets and limited government, but the reality is that companies from Europe and Asia are getting a head start on an industry that likely will be among the fastest growing, lucrative industries of the next generation. While the rest of world is thoughtfully investing in the future, the US is pouring trillion of dollars into classic 19th century industries like banking, agriculture and war.

For those US companies fortunate enough to have reached scale in the past two years (many taking advantage of European subsidies), congratulations, you probably have a great future ahead of you. For those emerging, transitioning and other US companies who will need to leverage a local market and competitive developmental infrastructure to survive on the global stage, best of luck. Maybe policies in states like California can help close the gap.

Health care reform took nearly 50 years to accomplish—and there were easy benchmarks to follow in every developed country in the world. There are also good benchmarks to follow in renewable energy (see the PV Group position paper on solar power). But effective renewable energy policy--with its guaranteed costs, uncertain outcomes and long-term justifications—seem unlikely to emerge from Congress in the next year.

And by then, well, we’ll see…

Busy Month for Member Consolidation

Soitec Acquires Concentrix Solar
http://www.soitec.com/en/finance/press-releases-418.php


Meyer Burger to merge with 3S Industries (a turnkey solar equipment maker)
http://www.3-s.com/en/media-center/news/ad-hocs/unique-technology-group-in-the-solar-industry-meyer-burger-and-3s-industries-plan-to-merge-.html


Oerlikon and Meyer Burger announced strategic agreement
http://finance.yahoo.com/news/Oerlikon-Systems-and-Meyer-bw-109363783.html?x=0&.v=1

Meyer Burger purchased Diamond Wire Technology
http://www.meyerburger.ch/en/public-relations/news/newsdetail/meyer-burger-concludes-purchase-contract-for-the-acquisition-of-diamond-wire-technology-llc/8a61e506c4/?tx_ttnews[backPid]=3


Singulus has completed their acquisition of Stangl
http://www.pv-tech.org/news/_a/singulus_acquires_remaining_49_stangl_semiconductor_equipment/


TSMC enters into strategic agreement with Motech
http://www.greentechmedia.com/articles/read/tsmc-wants-a-piece-of-motech/

Video Interview on Solar Policy

I recently had an interesting interview with an website called Etopia News on our Solar Policy White Paper that was conducted via webcam over the Internet. The interview was surprisingly easy to conduct and capture. I wish I was more articulate (have to work on that), but I am glad for any opportunity to push our message.

Marketing on the Rebound

Investment analysts have always liked the semiconductor materials and equipment industry because of its stock volatility. The boom and bust cycles that periodically afflict the industry create great trading opportunities. Whether up and or down, you need a stock to move to make a quick return on the stock market. It may be hard to predict a market turn on the Dow, but many smart people think they can correctly estimate the swings in the purchasing behavior of foundry’s and IDM from industry stats like the SEMI Book to Bill.

The volatility of the semiconductor market also creates market share opportunities for the players. In many product areas, market share gains and losses occur on the market upswing, as capacity is constrained, and on the downside. Share gains when fab or OSAT capacity reaches high level offers opportunities for price leaders, second sourcers, “me-too” products, and sometimes for anyone who can simply ship an order. Market share gains during the downswing can come from aggressive price cutting, preference for stable market leaders, missteps in sustaining service levels, or sustained product competitiveness.

At this time, during the upswing, technology buys typically lead the rebound. Through our World Fab Forecast product, we have been seeing investments in advanced 32nm and 45nm technologies pick up throughout the last quarter. Technology-driven markets inherently provide an opportunity for market share gain; offer what no else has or be the first to deliver what people need, and voila, orders will appear. But chasing advanced technology—especially during this slump when staffs are thin and money is tight—can lead to mistakes, expensive ones. TSMC has reportedly suffered yield problems after the rollout of its 40-nm process. The company promises a resolution by early 2010. Will the fix include a change in preferred vendors? And, will competitors including Chartered, IBM, Samsung, Toshiba and United Microelectronics learn from TSMC in the rollout of their 45-/40-nm processes?

Increasingly, the semiconductor equipment and materials market is characterized by segment specialization: memory, logic, microprocessor, analog/mixed signal, discrete, and opto increasingly move to their own step with unique requirements and buying patterns. Share gains can be had by segment specialization and product introduction timing. Samsung recently announced that it will invest 5.5 trillion won in memory chips in 2010 (up from 4 trillion won this year). Discrete lines are shifting to 6-inch and 8-inch wafers. LED chip output will grow over 75% per year.

Capacity buys have not yet appeared with virtually no capacity growth from 2008 to 2010, but they are right around the corner. Some reports have fab utilization rates at 93% in 4Q09. Many expect semiconductor revenue growth of 10% to 22% in 2010, so chips prices will rise and capacity shortfalls will happen soon. While there are no new fabs planned for 2009, new fab construction may mushroom quickly to meet the need for more capacity in 2011 and beyond.

With the upswing taking shape, there is renewed, intense pressure on sales teams to bring home orders. To support an aggressive sales effort, astute companies are restoring marketing budgets to 2008 and 2007 levels and more. It’s a race to sell on the upswing and those companies who are unable or slow to respond to the specific and lucrative opportunities for market share gains will lose in an increasingly narrow marketplace. Some firms are still paralyzed by the dramatic industry slump, unable to pull the trigger on marketing and new product plans. They may think that marketing no longer plays a prominent role in their business plans, that the industry has entered a new era where “marketing is dead.” They may think that simple customer roadmaps and key account planning is all that’s required to ride the upturn back to prosperity.

Successful marketers are already executing programs to aggressively sell on the upswing. They have technology statements and segment plans. They are getting ready to aggressively support capacity buys that will grow throughout the next two years. They are planning to gain market share and they smell their competitors’ blood. It’s no longer about survival; its about winning, its about growing.

Applied Materials Silicon Valley Turkey Trot

Thanks Applied for a great event.

SEMI Annual Customer Satisfaction Survey Reflects Changing Member Needs and Industry Challenges

SEMI conducts an annual Customer Satisfaction Survey (CSS) that we use to help answer the questions, “how are we doing?” and “what are our member priorities?” This year’s survey revealed both good and bad news on our performance and important insights on our mission. We use the CSS for detailed planning and review discussions with our Board of Directors, regional advisory boards, and SEMI worldwide staff.

Despite the horrific recession, member satisfaction remained stable in 2009, but it is not at an acceptable level and metrics for “member loyalty” slipped during the year (see sample data below; click on slides for larger image).

On the plus side, members saw an improvement in SEMI performance for the year and rate satisfaction with SEMI staff very high. Another interesting outcome was the strong correlation between member satisfaction and staff contact (Surprise, the more we meet with members, the better they rate our performance) and product usage (come to our webinars, read a white paper or subscribe to our market stats and you’ll appreciate us more). Surprisingly, this year exposition or conference attendance and standards usage are not correlated with member satisfaction.

On a yearly basis, SEMI conducts a customer satisfaction survey to assess the association’s effectiveness in meeting member needs. Along with other Voice of the Customer programs-- including transactional surveys, customer service feedback, executive interviews and other research—the customer satisfaction survey provides essential feedback that ensures continuous improvement on SEMI product quality, services and member satisfaction.

This year, over 2000 responses to the survey were received from every region in the world giving the survey strong statistical significance. Key objectives of the study was to gain insights in SEMI operational performance, strategic priorities and determine drivers of SEMI satisfaction and priorities of improvement. In addition to evaluating our tactical performance on managing events, delivering market research and other areas (i.e. “how is SEMI doing”), the survey also asked members to provide input on current priorities and new initiatives (i.e. “what should SEMI be doing”).

Important findings of the research include:
--Overall satisfaction levels about remain the same this year, with two-thirds of respondents giving acceptable and above acceptable scores
--More than three-quarters of members perceive an improvement in SEMI performance
--Scores for employee performance are high, and improving from 2008. The increase is significant in North America and directional for the remaining regions.
--Overall satisfaction with SEMI is higher among those who have had contact with an employee or product in the past year
--Loyalty measures for SEMI show a slight decline, with a decline in the number of members that are highly loyal, and an increase in the number of those considered at-risk.
--Satisfaction with providing exhibits and conferences is lower this year, while scores for providing networking opportunities and solving industry-wide problems are improving.
--Seven new initiatives were also analyzed in 2009, and were each measured by their level of importance and satisfaction. Results show the following attributes as the most important to SEMI members: informing members of new market opportunities in LEDS, MEMS, printed electronics; advancing intellectual property protection; educating the industry on sustainability; helping members in the PV industry; and representing member interests in the 450mm wafer transition.

While satisfaction was stable and many other positive outcomes were evident, the survey confirmed many of the industry trends that are significantly impacting the association. As the industry becomes leaner, the importance of trade shows and conferences are declining. This trend has important financial impacts for the association, including the ability to fund other member services such as standards, advocacy, sustainability and other areas. Clearly, the challenge for the association is to sustain, if not improve, SEMI services in the face revenue challenges from the mature trade shows business.

With the industry in crisis, many of us were dreading the results of the survey. In the midst of the worst industry downturn in history, you don’t generally want to get into people’s faces and ask, “How are we doing?” But we were grateful for the results and the good feedback we received from many, many people.

Qualitative and Quantitative Input

As mentioned above, the member satisfaction survey is just of many feedback loops we use to ensure continuous improvement. Currently, we are engaged in a comprehensive program to meet and discuss the association’s changing role and member priorities with over 50 key members worldwide. This is in response to a Board mandate to solicit executive input to better understand long-range (2010 and beyond) association value proposition and planning considerations. Throughout October and November, every SEMI regional president is meeting with executives from a diverse group of members to better validate our mission and assess the association’s product and service priorities. Many of the outcomes of the annual survey and executive outreach effort are complimentary; survey’s provide statistical significance and is democratic. The one-on-one interviews get detailed insights into member needs and are better at revealing hidden, critical and new insights.

As a marketer, I am proud of the thoroughness and precision of our member satisfaction and continuous improvement process. It doesn’t solve all the problems or overcome complex, macro and historical challenges, but it is a very solid base to our decision-making.

Matt Grimshaw, from Future Fab Connect, had a thoughtful blog post on the future of the semiconductor trade press that I took a few minutes to respond to. Matt is responding to the common perception that there is a "new normal" in the industry and it doesn't look good for the trade press, trade shows or even marketers. Here's how I responded:

Like the trade media, SEMI and our events are also suffering from the demand collapse and reduced marketing spend in the industry. As you suggest, traditional justifications for trade show spending, such as leads for new business, are harder to come by, and marketers are being forced to compete with other functional heads (R&D, Sales, manufacturing, service, etc.) for budget dollars. Not surprising when capital spending in the industry has shrunk to $14-15 billion this year off its 2007 high of $42 billion. This shrinking-of-the-pie means something’s gotta give, and marketing budgets look attractive to executives trying to save jobs, meet customer demands, and keep the dogs on Wall Street satisfied.

More than the immediate financial crisis, however, is the widespread perception that our industry has entered a new era. You hear about about how semiconductors are a “mature” industry; "marketing" i snow done through product roadmaps shared with customers in private PowerPoint sessions, and new technology is sourced through the Internet, bypassing traditional trade shows and trade media. Without clear metrics for ROI, marketers and marketing are being starved, unable to compete with the--presumably--more solid justifications by engineering, sales, manufacturing and R&D for resources. You sum up the common marketers lament by stating, “The chip business is now entering a state of maturity that's pretty much equivalent to late teen angst.”

Well, teenagers, like semiconductor marketers, probably shouldn’t whine about the state of the world. It’s bit immature, unproductive and poor practice for life’s guaranteed ebbs and flows.

I think you’re on track with Option 3—experiment with new ideas—but my emphasis would not be on how to save the trade media or industry trade shows. Nobody cares about me and you. People focused on their business aren’t going to shed a tear if another trade magazine goes belly up or SEMICON West never returns to the scope of the show 5-10 years passed. Companies have to do what they’ve always had to do: differentiate themselves from their competitors in ways that make money. In communications, marketers are going to have to fight for their “differentiation dollars” just like R&D and other departments have to fight for funding, and those guys have no more sophisticated ROI metrics than marketers do. They have anecdotes from a few customers, some vague judgement about competitive positioning, and some interesting ideas from engineering for clever new features that might make a difference in a competitive bid. After all the sophisticated attempts to reduce risk through dubious quantification, these are about the same kind of justifications needed to support trade shows or media promotions.

The fact is, the business is harder for everyone in the industry. Gone are the days when agency-types could sweet talk management into ego-gratifying media campaigns and trade show booth palaces. The vast bulk of marketing dollars that are going to be spent in this industry will be firmly based upon well-informed, thoughtful arguments by people grounded in the technical, application, competitive, and sales cycle specifics of the product category. Trade shows, media promotions, PR, social networks, and even marketing “experiments” will be a part of that spend. Will it be as much as the past? Probably not, but we’re not selling salt or spring wheat; companies will continue to compete by aggressively differentiating their products and communicating those benefits through mediums like trade shows and trade journals.

For those of us who will continue to make their careers in the microelectronics industry, our job is to adapt or die

SEMICON Europa

SEMICON Taiwan

Extreme Innovation at Tong Hsing

My last blog entry was on the challenges of diversification in the micro and nano-electronics manufacturing markets. I compared the natural diversification opportunities of parts and sub-system suppliers with the overwhelming challenges of diversification for highly specialized semiconductor tool manufacturer.

Yesterday, I saw another version of the diversification story on a visit to company that has made leading-edge, niche markets its prime domain. Its business strategy is to find customized applications in promising markets--typically served by hard-to-find, underfunded start-ups—and develop novel and innovative packaging solutions. Entering into long, complex development cycles in risky markets and difficult applications is its forte.

Nestled among the narrow streets of Tauyuan area, between Taipei and Hsin Chu, Tong Hsing Electronic Industries is developing some of the world’s most innovative micro modules and custom semiconductor packages. The company specializes in PA front-end modules, MEMS packaging, thick film and thin film ceramic substrates, and other advanced microelectronic packaging.

Heinz Ru, senior vice president of marketing and innovation contacted me after reading my name a SEMI press release announcing the Extreme Electronics section of SEMICON West that focused on MEMS, high brightness LEDS and printed and flexible electronics. Heinz had a feeling I would enjoy the Tong Hsing story and he was right.
Tong Hsing specializes in Extreme Electronics, providing advanced packaging to some of the most successful companies and products in the world. Their core expertise is in material science on interconnect applications and they have been enabling some of the most difficult and successful applications in MEMS, including displays, inkjet printers, accelerometers, gyros, and microfluidics. Heinz described a wide variety of successes; their provide modules for fuel cells that fit in your pocket or power your neighborhood; MEMS ink jet heads that can put a printer in your cell phone; high performance PV modules with high-voltage, thick copper substrates. They are the world leader in providing module substrates to HB-LEDS (hundreds of millions of units) from factories in Taiwan and the Philippines. About 80% of their business is from the US.

Their expertise is focused on solving packaging and system problems in ways that can be economically scaled to mass production. They are skilled at process development, yield enhancement, and customized reliability testing. Their mission is to become the leading foundry service provider of RF Modules, SiP and MEMS packaging in Asia Pacific. Tong Hsing is currently focused on doubling the production scale of metallized ceramic substrates used in HB-LEDS, adding production capacity for thick film substrates and hybrid modules used in the automotive industry, and ramping up ink jet printing heads lines.

Unlike many companies in the semiconductor supply chain, Hong Tseng isn’t diversifying into high-risk, niche markets as a way to soften the boom and bust of the chip cycle; this is a company that embraced innovation in emerging adjacent microelectronics markets as a way of life.

The Challenge of Diversification

I began my career in the semiconductor industry in the 1980’s with Omron Electronics, then and now the world’s largest manufacturer of controls and automation components. Omron made thousands of products used in advanced manufacturing including sensors, switches, controllers, vision and RFID systems and a whole lot more. Virtually every industry and every sophisticated machine used sensors and controls from companies like Omron.

For a marketer it was a wonderful learning experience, understanding how our products could be used in different applications by different industries. Trade show were a big part of marketing process. After SEMICONs, I would be off to a pharmaceutical, textile, food, packaging, plastics, or other industry event. We made a several specialized devices for the chip industry, but many of our standard products could be used any industry to sense and control.

Omron (one of the great companies in the world, by the way) is like many exhibitors at SEMICONs who serve many industries with mostly standardized products. Companies that sell motion control, pumps, process equipment, chemicals and many other products aren’t exclusively reliant on semiconductors for revenues. When fab spending declines, they look to other industries to compensate for the losses.

For the top OEMs in the semiconductor equipment industry, diversification is a much more difficult proposition. While their parts and subsystem suppliers are typically highly diversified across multiple industries, being successful at developing equipment for the next technology node requires enormous R&D and engineering resources. Many of these tools cost in excess of several million dollars. You can sell a multi-million machine tool to make aircraft, ships, cars or rocket ships, but you can only sell an advanced tool to a semiconductor manufacturer.

The chart at the bottom of this article illustrates the challenges to diversification for specialized semiconductor suppliers. The semiconductor industry is larger than the flat panel, PV, MEMS, printed electronics, and LED industries combined. Not only is it larger, it is significantly more capital intensive. Historically, semiconductors requires between 15-17% of sales on capital equipment. Advanced chips have well over 100 process steps while LEDs, PV and MEMs often made with integrated system that resemble a batch production operation. Even by 2013, most observers do not expect LED, MEMS and Printed Electronics to spend more than a billion on equipment.

Still many equipment and materials suppliers have had success in supplying to adjacent nano-manufacturing markets. Many top semiconductor equipment suppliers led by Applied Materials and Oerlikon, have successfully transitioned to PV. Veeco and Aixtron are building healthy businesses in LEDs. Many of these companies are looking not at the five-year projections, but betting on visions that extend 10-years and more. Many of them are trading low-share, low-profit positions in semiconductors for high-share, high-profit gambles in smaller markets.

Companies that succeed in leveraging their semiconductor process expertise to adjacent markets will win by:

Innovation- Emerging markets in PV, LEDs and MEMS are often characterized by their resemblance to semiconductors 10 to 20 years ago. They are often non-automated, open loop manufacturing systems that produce low yields and low throughput. As young industries, they have yet to fully benefit from the venture-fueled ingenuity that has characterized a generation of chip companies. Blockbuster innovations and breakthroughs are nearly certain.

Specialization- As many companies have realized in PV, you can’t sell a tool optimized for one application into a new market without significant modification. Winners in adjacent nano-manufacturing markets will take enormous risks to learn and adapt their chip expertise to new applications.

Patience- The emerging markets in LEDs, PV, MEMS and Printed/flexible are long-term plays. Many observers see PV as the beginning of a 30-year run; the high brightness LED market won’t explode until they reach parity in 5 years; and printed electronics may initiate a new era of ubiquitous electronics in retail, clothing, biomed, building materials and more.

Diversification is increasingly an important part of our industry. The economics, science, engineering, and vision that drove the semiconductor industry is transferring to many other microelectronics industries. While they may share the same origin in semiconductors, the solutions and supply chains that serve PV,MEMS, LEDs and other adjacent markets will be of those industries, distinct and unique, like children who leave home in search of their own separate lives and future.

Tony Blair and Jet Li launch the 1000-Village Solar LED Initiative in China

Are You Ready for the Rebound?

The Silicon Valley Lunch Forum was held last week and it confirmed to me some fundamental truths about the semiconductor market. One truth was that what goes up must come down (and must go back up again). Surprise! We live in a cyclical marketplace. Whether it be inventories or consumer demand, capital spending in this industry is on a yo yo, fluctuating with the emotions of financial markets and the ebb and flow of the classic business cycles.

But like the general state of humanity, despite the downturns, chips are always on an upward trend. Just when you think the world is collapsing and we’re heading toward the stone age, the market will turn.

The other truth is that we always forget the first truth.

Bill McClean knows these truths like he knows his mother. He was absolutely ebullient at the Forum. While no one saw the suddenness and depth of the last swoon, in January he forecasted the cycle with the precision of watchmaker. This is his fifth cycle, so he’s been wise to the semi yo yo for at least the last cycle or two.

“Think quarterly,” he says, and points out that the aftermath of every global recession is pent-up demand, with “two great years of semiconductor growth.”

Next year, he sees at least 15% growth, and possibly 20% growth. “As bad as that downturn was… but it could work in reverse, as strong upwards as it was downwards,”

Bill’s more positive, of course, than most people. Lots of people in the semiconductor industry are still struggling with radical downsizing, more quarters of loss, and trends that point to a leaner, more consolidated industry. “It’s the new normal,” many of them claim and carry a glum about them like Pig Pen from the old Charlie Brown cartoons.

But business is business its time to suck it up and remember how the game is played. Growth and profitability in the industry is going to come from innovation, differentiation, diversification and stealing share the ol’ fashioned way through grit, spit and hustle.

I sense a lot of paralysis out there today. People have been so focused on surviving, they’ve forgotten how to thrive. But winter’s over folks; its warming up and time to come out and play.

If you are not laser focused on competing on the upturn, you will become instinct. If you are not actively, creatively, and aggressively planning to increase share in your key segments, then you are road kill, an artifact, a casualty of time. If you’re waiting for your customers’ spending, your R&D team or some clever refresh of PowerPoint slides to save what remains of your semiconductor business, then you might as well step aside now.


If you’re going to win in this roller coaster business, you have to learn how to get over the queasiness of the downside and enjoy the exhilarating ride to the top of the next cycle.

Hienz Kundert on European Competiveness

Great Feedback on SEMICON West

I’m passionate about getting quality data to make good decisions and get objective insights on SEMI products and services. I obsess over web analytics, attendee surveys, registration data, customer profiles, email open rates and click-throughs, and anything else I can find to enlighten and simplify a complex world.

For SEMICON West we use a number of tools to better understand our attendees and exhibitors and how to serve them. We use both qualitative and quantitative data on both attendees and exhibitors to measure event satisfaction, behavior and other parameters that are important to our customers and event planners.

Our SEMICON West post show report is the primary tool exhibitors use to evaluate the event’s audience. Our report is based on trade show industry standards; in fact, last year our report and data collection process was audited by BPA to ensure the highest quality, most accurate attendance reporting. The post show report is based on “verified visitors,” or those non-exhibitor attendees who actually pick up a badge and attend the show. In addition to sheer volume, the post show report includes demographics on title, geographic origin, product interest, and purchasing authority.

We also use the registration data to understand what specific buyers came to the show and why. We are looking for names of approximately 200 real buyers from fabs around the world to verify their attendance and behavior at the show (its not spying, but don’t tell anyone).

We also send surveys to every attendee and exhibitor asking input on key performance and satisfaction issues, and providing an opportunity for open-ended comments and recommendations. Some of the questions are the same for every SEMICON event so we can compare metrics across many events, and many questions are specific to the event and target specific issues. Our response rates are very high on these surveys, attesting to the desire of most attendees to help see SEMICON West become the best exposition possible. Believe me; I read every survey response.

We also stop by as many exhibitors as possible to get feedback and opinion on show performance. This year we met with 134 exhibitors to get their input on their show experience and ways we could improve the expo and programs. Over 40 Action Items resulted from these meeting that were intended to improve show performance.

While the quantitative feedback key performance metrics are essential, I most enjoy the personal and direct feedback I get from exhibitors. Judy Davies at Verigy was enormously well-prepared and thorough in capturing and documenting ways that SEMI could improve West. Her spread sheet listed over 20 items, each coded with the classic Red, Green and Yellow indicating how we were doing. Of course, not all of this feedback is good. Judy doesn’t hold back in her expectations and she is tough customer to satisfy. But her feedback is vital to helping us improve the show.

At yesterday’s SEMI Sales and Marketing Council, Joe Lonergan at AES Motomation gave the group an honest summary of his experience at SEMICON West. Joe explained to the group that he was concerned about the traffic (many less exhibitor staff), but was (fortunately) happy with the quality of leads.

While negative feedback healps us improve and focuses our effort, I have to admit I really enjoy the good feedback. Catherine Rossi Roos from Roos Instruments was kind enough to write, “I don't think we have such a good show since 2000 when TAP was still in San Jose. I believe our location near the TechXSpot played a big part in the both quality and quantity of our booth visitors.”

Even Pete Singer, Editor-in-Chief of SST and Small Times, said “huge kudos to the staff of SEMI who did an excellent job of lining up great speakers for a variety of tech sessions running throughout the three days of the show.” That was nice.

All of this is just a long winded way of saying, -if you have any feedback on SEMI or SEMICON West, please us (me) know. I promise we will listen and use the information to improve our products and services.

Semiconductor Employment in the United States

According to the Bureau of Labor Statistics, the semiconductor/electronic components industry lost 15.3% of their total jobs since December 2007 (see chart below). That’s three times more than finance and insurance industries, and in the range of furniture and textiles, two low-tech, labor intensive industries that have been racing to Asia for several years. This dramatic employment decline reflects a catastrophic failure of public policy and a historic abdication of responsibility by elected leaders. While Washington debates the need for million dollar bonuses on Wall Street, a trillion dollar overhaul of the health care,industry, and yearly farm subsidies in the tens-of-billions, the global high tech industry is happy to move anywhere they are wanted, nurtured and welcome.

Increasingly that is not the US, and the situation is getting worse, not better.

When honest observers look at the reasons for high tech’s flight offshore, it will be hard to discount the fact that semiconductor, Internet and computer industries rank near the bottom of the list in political campaign contributions. Securities traders, health care professionals, lawyers, insurance companies, and real estate are all in the Top 10 in campaign contributions. Computers/Internet ranks 37, right after railroads and Beer/Wine/Liquor (there is no separate category for semiconductors).

One of the issues that showcase the total disrespect and criminal neglect of high technology by elected officials is the failure to reform of the H-1B visa process. Foreign born nationals who receive their science and engineering degrees in the US should not be forced to leave the country upon graduation. SEMI goes to Congress every year and no one—not one staffer, not one representative—will argue against expanding the number H-1B visas for US graduates of science and engineering. Yet the bills can’t get out of Committee, and can’t get a vote.

The impact on US high technology has been devastating. The US has been skimming the best and brightest minds from across the globe, and prospering because of it. Between 1980 and 2000, the percentage of Ph.D. scientists and engineers employed in the United States who were born abroad increased from 24% to 37%. The current percentage of Ph.D. physicists is about 45%; for engineers, the figure is over 50%. One fourth of the engineering faculty members at U.S. universities were born abroad. Between 1990 and 2004, over one third of Nobel Prizes in the United States were awarded to foreign-born scientists. One third of all U.S. Ph.D.s in science and engineering are now awarded to foreign born graduate students. Today, the number of applications for H-1B visas exceeds the “quota” by at least three times. Foreign born engineering and science graduates now expect to find jobs outside of the US upon graduation.

In the recent past, the arguments for high technology centered on the benefits of economic growth, the proliferation of high paying jobs, and national security. Today, the need for a healthy high tech industry increasingly involves global warming and energy security. Here, semiconductors and semiconductor technology are the principal means to replace fossil fuels and create energy independence. Faster, better, and cheaper microprocessors have a direct and immense impact on energy efficiency. The Bureau of Economic Analysis (2007) reports that while the economy as a whole increased energy use by 13 percent over the period 1997 through 2007, the semiconductor industry actually cut energy use by half over that same period.

According to the American Council of Energy Efficiency Economy, the cumulative net electricity bill savings enabled by semiconductors might exceed $1.2 trillion through 2030, supporting some 935,000 more jobs while substantially reducing 700 million metric tons of carbon emissions.

Much of the same technology that made the US number one in semiconductors is also used in photovoltaic and solid state lighting, technologies essential to our energy future.. Rather than leveraging this technology heritage into leadership positions in these critical industries, the US has squandered its lead and is barely a participant in either of these of high growth sectors.

It is astounding that we allow our elected leaders to reap millions of campaign contributions sustaining 18th century industries when the opportunities and benefits in semiconductors and high tech can yield economic growth, quality jobs, energy efficiencies, and cost effective renewable energy for decades to come. Politicians need to be made accountable for economic policies that moves billions into corporate farms, gangster banking and profiteering health care, while it forces ingenuity, innovation and well-earned prosperity overseas.

SEMICON West 09

Historic Milestone? Only Time Will Tell

It was an exciting day today as over 130 leaders from the semiconductor and solar industry packed a small room in the Intercontinental hotel to talk about a possible solar technology roadmap along the lines of the ITRS. The meeting was jointly arranged by the DOE and SEMI PV Group about 10 days ago. The PV Roadmap Workshop sold out in about 2 hours after the initial announcement email. We had about 100 on the waiting list.

The crowd was a mix of semiconductor veterans who have played leading roles in the ITRS process, and skeptical solar industry technologists who questioned how their competitors, academics and other “outsiders” could help them in their race towards grid parity and IPO glory. There were a lot of old timers from the early days of the chip business, and young solar hot shots at the height of their careers who plan to save the world and get rich in the process--exactly the kind of mix of people you hope for, and worry about, when we co-located Intersolar and SEMICON West.

It was hard to anticipate which way the meeting would go. Cell and module makers are still in their early phase of the industry where many believe they enjoy competitive advantage in manufacturing. It’s hard for many current industry leaders to fully understand the benefits of pre-competitive collaboration when they are already outperforming their competitors. Before the crash in October, they could sell whatever they could make. The industry prides itself on a long history of conversion and efficiency improvements, yet the productivity learning curve industry is unimpressive at best (about the same as shipbuilding and machine tools, pretty crappy really).

And PV is nothing like chips. Without the unifying paradigm of the process node, what would drive a technology roadmap? And how would the US DOE drive it, knowing the Germans, Japanese and Chinese would have to be a part of it for it to be effective. Was everyone there just looking for Obama stimulus funds?

All those concerns quickly evaporated. It was a great meeting.

Everyone got a quick update on the technology roadmap efforts in Japan, Europe and the US (EPIA and NEDO/METI from Japan). They saw how these were a mix of R&D efforts, industry advocacy and promotion and not an attempt to coordinate private capital and private ingenuity to achieve accelerated, common objectives.

They also got a fine update on the ITRS itself: how it works, what is applicable to PV and what isn’t, how thin film and crystalline might be able to co-exist under a single framework.

Breakout sessions dove into the details: materials, factory integration, thin film and wafer, cells and modules. We struggled with silicon concepts—wafer, square, or ribbons. We struggled with substrates—how thin, how hard, how flexible, how long. Could this diversity be assembled into a roadmap? Are we too early, too late?

As the breakout sessions reconvened, the question was asked, “Do you think a International Technology Roadmap process for solar was needed?” and nearly everyone raised their hand, high. No one argued against it. I had the feeling that most folks in the room understood the opportunities in a technology roadmap, and the complex, daunting challenges and barriers ahead. This will not be an easy. I sensed that everyone knew a PV technology roadmap will be different than the ITRS, but that the ideas, processes and symbols of ITRS would be the guide.

I don’t think I was alone in feeling that an important step was taken for the industry and for the world. History Being Made? Only Time Will Tell.

Solar Can Initiate a Manufacturing Renaissance in the US

After decades operating under misguided notions of globalization, the global credit crisis and financial collapse has grimly and assuredly dashed the notion that the US economy could prosper strictly as a service economy without a strong manufacturing sector. Countries need to make tangible products for a healthy, robust economy to sustain middle class jobs. Unfortunately, the demise of GM and Chrysler characterize the bleak state of manufacturing in the US. Will solar be similar to automobiles or semiconductors with manufacturing overwhelmingly centered in Asia

The Obama administration’s stimulus package offers the hope of a new era of “green” jobs. But just how realistic are these expectations for a boon in high-pay, high-value jobs in clean and green tech? While the US might still be able to out-innovate the world, won’t manufacturing jobs gravitate to low-cost, low-wage locations in Asia like they do in semiconductors, consumer electronics, and many other industries? China already leads the world in PV cell production. How can the US compete?

The fact is, solar photovoltaic (PV) energy is an excellent job-creator, but will require smart policies to significantly benefit both US employment and fossil fuel reduction. Many observers have concluded that solar energy is the most efficient and efficient job creator among all energy alternatives. Every step in the value chain—from the development, manufacturing, sale, support and installation of solar panels--require smart, well educated, well-paid people. EPIA estimates that 10 jobs are created per MW in manufacturing. By 2030, solar energy is estimated to create as many as 10 million jobs, but how many of these will be in the US; and how many in manufacturing?

One of the primary reasons why, unlike semiconductors, solar can be efficiently and practically made in the US are the simple fact that solar photovoltaic panels are large and heavy. While based on the same technology as semiconductors, solar panels benefit enormously from being manufactured close to their customers. The cost of shipping and installing a PV panel today is as much as 40% of the total cost, growing to 60% by 2020. Germany enjoys a healthy manufacturing base in solar and we saw significant investment in Spain as they established tariff incentives. Every analyst agrees that US will become of most of the biggest consumers of solar energy in the world and the natural advantages of manufacturing close to the customer base favors US-based cell and module production.

Another factor that can to lead to job creation is that the future PV industry leaders will be technology leaders and the US leads the world in The US leads the world in innovation and technology. While much of the world leaders in PV production are based in China and Europe, the vast amount venture capital, patents, and future innovations in solar probably reside in the US. North American companies raised $5.9 billion in “clean tech” venture capital in 2008 accounting for close to 70% of the world investment total. Nearly 100 new cell and module companies have been formed in the US. Bridging the gap between innovation and production—or between “invented in the USA” and “Made in the USA”—should be the chief concerns of policy makers at the local, State, and Federal levels.
America’s manufacturing renaissance in solar energy will also require a large, healthy, innovative supply chain of cell manufacturers, equipment, and materials suppliers. With a head start by European and Chinese suppliers, that US-based supply chain necessary for world leadership and job creation is currently behind, but catching up quickly. Among cell and module manufacturers, First Solar and SunPower are among the world leaders today, and new firms such as Solyndra have interesting prospects for continued growth. Many of the emerging technologies in solar in printed and organic technologies, III-V compounds and DSS are based in the US. And, equipment and materials suppliers such as Applied Materials, Hemlock, DuPont, and KLA-Tencor that helped create the most successful chip industry are also based in the US.

The dynamics that led the chip industry to move production to Asia don’t have to be repeated in solar. While American innovations in notebook computers, digital music players, mobile phones, and advanced semiconductors are today all manufactured in Asia. solar PV can be different. Because of the importance of shipping costs, automation and technology, the emergent solar industry can keep the manufacturing jobs in the US--with the right programs, policies and vision in place.

SEMI PV Group Global Advocacy Efforts

SEMI has never been more engaged in public policy efforts, in more countries, in the past 6-months than it has in the 38 years of its existence. The majority of these efforts have been directed through our PV Group at the dynamic solar energy policies emerging in many regions.

The global photovoltaic solar landscape is comprised of many countries making significant contributions towards reducing the world’s reliance on fossil fuels. Many of these countries are contributing to the supply side of PV power--contributing cells, modules, equipment and materials--and a few countries are making a major contribution to the demand-side, deploying PV systems to generate clean, renewable energy in both on-grid and off-grid applications. In addition to tackling supply side issues involving equipment, materials and feedstock, the PV Group has also addressed the demand side with several recent public policy efforts in China, India, Taiwan and the US to expand the market for solar power.

In May, the SEMI PV Group released the white paper, “China’s Solar Future,” a preliminary report containing specific recommendations for a China photovoltaic (PV) policy roadmap. As the world’s fastest growing developing country, China faces a rapidly increasing demand for energy and the country has also been building a massive PV industry representing all facets of the supply chain, from polysilicon feedstock, ingots and wafers to cells and modules. Virtually all of this PV production has been exported. The report recommends an accelerated adoption of PV generated electric power in China to reach global average level of PV power generation by 2014.

Under the direction and guidance of the Taiwan PV Advisory Committee, the SEMI PV Group urged the swift passage of the Renewable Energy Act to increase the adoption of solar power in Taiwan. The plan is designed to increase demand for solar power, as well as boost research and development and support the development of the island’s green energy industries. In meetings widely covered by the Taiwan press, the PV Advisory Committee met with several legislators and government officials to advance the PV policy agenda.

In April, the PV Group Advisory Committee in India announced an outline and vision for the Indian solar market, including growth opportunities, potential socio-economic development benefits, the current market situation, and India public policy needs. The white paper entitled, “The Solar PV Landscape in India – An Industry Perspective,” suggests that India can play a leading role in the global photovoltaic and solar industry. The paper was developed by India PV Advisory Committee, represented by industry leaders from all sectors of the solar PV supply chain. The report was released by Mr. K. Subramanya, CEO, Tata BP Solar at a special briefing for the media, and included strong demands for policies to increase solar deployment in the country.

In the United States, SEMI and the PV Group actively worked to include several innovation-oriented elements of the American Recovery and Reinvestment Act (H.R. 1). The stimulus package included significant funding increases for key science agencies, including the National Science Foundation, the National Institutes for Standards and Technology and the Department of Energy. The bill also emphasized alternative energy with numerous provisions and new spending intended to increase government use of alternative energies, spur development of the domestic market and create “green” jobs. These provisions include the creation of a new manufacturing tax credit, a temporary loan guarantee program, a new DOE program that will provide grants as an alterative to the investment tax credit, and increased federal procurement. SEMI PV group is currently working closely with Congress on the upcoming energy bill.

In response to member needs and under the direction of PV Group Advisory Councils around the world, the SEMI PV Group will continue to advocate, collaborate and facilitate solutions to both demand and supply side issues in the global solar marketplace.

Join us for the World Premiere of 'MEMS: Making Micro Machines'

World premiere of 'MEMS: Making Micro Machines' at SEMICON West

A film by Silicon Run Productions, funded by the NSF, MIG, SEMI and others

Hosted by MEMS Industry Group (MIG)
Wednesday, Jul 15, 2009 (1:00 PM to 1:55 PM) at Moscone Center North, SEMI Theater

SEMICON West Update

With the industry in the midst of the worst slump of its history, many people are asking me, “What’s happening with SEMICON West?”

It’s not an easy question to answer. From a programs perspective, I think it will be the best West in a decade. We have more content and more original, high quality content that we’ve had in many years. In addition to the TechXPOTS which will be better this year, we have much stronger partner programs. The MEMS Industry Group will hold its Business Strategy Seminar, Convergent Semiconductors will hold an impressive conference on new memory technologies, and Sematech will run a 3D Interconnect Workshop. I am especially looking forward to FlexTech Alliance’s introductory and educational workshops on printed electronics. There will 2-hour Packaging and Foundry Summits, and this ITRS panel discussion will present the critical issues in the industry roadmap. For more on West and the programs, visit http://www.semiconwest.org/

But in terms of exposition space, West will be a smaller show. The floor plan has consolidated into Moscone Halls North and South and the Test and Packaging segments will no longer be located in Moscone West first floor. But Intersolar, our partner solar exposition is growing and compensating for the semiconductor decline. Intersolar now occupies all of Moscone West, tripling the size of last year’s exhibition and bringing the 2009 total floor space to approximately 120,000 net square feet –Intersolar North America 2009 now expects to accommodate around 500 exhibitors. Currently more than 400 exhibitors from 20 countries worldwide are confirmed to exhibit at Intersolar with 15,000 expected attendees anticipated

Concerning attendee registration, things are going reasonbly well for SEMICON West. Through Sunday, May 24, SEMICON registration (SEMICON-only and SEMICON + Intersolar North America) totaled 9,617, which is -22% versus the same week last year, but only -6% compared with the five year average for this week (10,223).

We added 1,423 visitors in the past week, versus 1,727 the week prior. Including the 1,055 Intersolar-only visitor registrants, total visitor registration for both events through Sunday totaled 10,672. In the past two days, even with the Memorial Day holiday, we have added over 500 new SEMICON visitors, which is ahead of our average daily pace. And Intersolar audience recruitment hasn’t kicked in yet. Last week, Intersolar distributed their first visitor promotion email, which accounted for a significant portion of the week's accelerated registration.

While the industry is mired at equipment booking levels not seen since the early 90’s, innovation continues on productivity, 22nm geometries, new materials, wafer sizing, and a host of other areas. At the same time, the MEMS, solar, high brightness LED, printed electronics and other markets are just emerging. SEMICON West is still the place to be to participate in the next waves of innovation in advanced manufacturing. As the industry and region changes, so must SEMICON West and we’re committed to evolving the show in new ways. If you have any ideas or comments, please let me know.

SEMI Members Essential to a Sustainable World

I was thrilled and proud to see the recent report that confirmed that semiconductors are at the vanguard of the world’s most significant steps to reduce fossil fuel consumption and mitigate climate change. The report by the American Council for an Energy Efficiency Economy (ACEEE) claims a significant relationship between economy-wide productivity growth and the use of semiconductor-based technologies. Since 1990, the United States has expanded its economic output by nearly 62 percent but the demand for energy has grown by less than 20 percent during the same period. The report claims that this decoupling of economic growth and energy consumption is a function of increased energy productivity— primarily achieved through semiconductor technologies. Faster, better and cheaper microprocessors, computers, and telecommunications equipment have accelerated both the adoption of these technologies and their growing networked use. This, in turn, has ignited changes in the way that we manufacture products, conduct business, and maintain social activities.

And of course, I believe that technical achievements in manufacturing equipment and materials are the primary drivers for the proliferation semiconductors. Semiconductors have been around for decades. What has made them faster, cheaper and better are the manufacturing efficiencies delivered by SEMI members that have made Moore’s Law a self fulfilling prophecy. By enabling a miraculous 4,000,000X reduction in cost since 1975, no other industry has had such a positive and wide ranging contribution to world energy efficiency and no other industry is expected to contribute more to fossil fuel reduction in the coming decades.

The report states: “Compared to the technologies available in 1976, we estimate that the entire family of semiconductor-enabled technologies generated a net savings of about 775 billion kilowatt-hours (kWh) of electricity in the year 2006 alone … [H]ad we expanded the size and scope of the U.S. economy based on 1976 technologies, it appears that the U.S. would be using about 20 percent more electricity than actually consumed in 2006.”

What the report doesn’t state is that semiconductor technology—or to be more precise, manufacturing technology—is also displacing fossil fuels by enabling the production of solar PV, solid state lighting and fuel cells. Some estimates predict that by the year 2030, PV systems could be generating approximately 2,600 TWh of electricity around the world, enough to satisfy the electricity needs of almost 14% of the world’s population. In environmental terms, it would reduce annual CO2 emissions by 1.6 billion tons, equivalent to the output from 450 coal-fired power plants. Today, virtually every mass-produced PV cell in the world is made with equipment and materials from SEMI member companies.

Solid state lighting produced by high brightness LEDs (typically GaN/InGaN chips) is another critical component of the future energy equation. It is estimated that 22% of the nation’s electricity is used for commercial lighting, equivalent to 8% of the nation’s total energy and approximately 130 million tons of carbon emitted into our atmosphere. The Department of Energy (DOE) estimates that an efficient solid state lighting technology could save the U.S. about 620 billion kilowatt-hours per year (or approximately 50-70 power plants) by the year 2025. Like solar cells and semiconductors, the equipment and materials used to make solid state lighting are developed and made by SEMI member companies. Without continued developments by SEMI member companies, white LEDS won't reach the cost targets necessary to diplace conventional lighting.

Almost every solution contemplated to solve our energy problems are enabled by semiconductor technology made faster, better and cheaper by SEMI member companies. Many of these of solutions are just now being developed, such as nanotechnology fuel cells and energy harvesting chips that are powered by kinetic energy. Smart grid technologies enable a more cost-effective deployment of decentralized but cleaner renewable energy resources— such as solar panels and wind turbines. These “green” technologies are also enabled by a variety of semiconductor technologies, including sensors to measure temperature or other variables; communications chips to receive and transmit data; memory chips to store the information; and power management chips to adjust energy loads.

The importance of SEMI member companies can’t be overstated. Without their manufacturing expertise, developments in the lab can’t be commercialized for widespread use. Without their achievements, the gigawatts needed in solar and the double digit economic productivity increases can’t be realized. Without their contributions, the only equation that works in our energy future is one that requires drastically lower lifestyles, radically reduced economic progress, and an end to developmental progress in Asia, Africa and elsewhere. Fortunately, the companies that comprise SEMI are marshaling some of the most brilliant and ingenious people from around the world to address the planet’s most critical problems.

The Value of Exhibiitng in a Downturn

“We need the continued visibility so that clients know you are still there and potential clients don’t think you have gone under.”

“Less people, but more authority to purchase.”

“The decrease in attendance has lent to increase in quality and size of prospects who do engage.”

“Not being at the show leaves people to wonder if we are still in business.”

“(We exhibit in a downturn to) gain additional market share in this economy and try to outlast the competition.”

“For increased exposure with new customers. Renew relationships with existing customers.”

“Maintaining our company profile of strength and consistency, so when the market strengthens we are the first choice.”

“(There are) fewer attendees, but typically they are high quality decision-makers.”

These are the opinions of real exhibitors. They continue to see trade shows as an important investment in new business and enhanced profitability. Particularly in the semiconductor industry, trade shows remain the most cost effective marketing medium and sales tool available today.

Passive marketing through advertising, web, and arming sales people with brochures and Powerpoint presentations won’t change customer perceptions and behavior. To effectively influence people, effective marketers know that you need to imprint your key messages on customers through interaction and engagement. Sales calls and meetings can’t deliver these effective environments because customers control the situation and will discount—if not actively fight—your attempts to differentiate your products from your competitors. Customers already have a supplier opinion and ranking and won’t believe your key messages and sales people. They won’t read your brochures and webpage and will resist all your efforts to position your new unique product features and technology. They will try to drive all sales meetings to a commoditized price and delivery conclusion.

Trade shows gives marketers the most effective way to differentiate their companies and products, and change customer perception and behavior. You control the environment in a trade show engagement and your sales messages have the supercharged credibility of 3 dimensional authority, underscored by demonstrated corporate commitment. They allow you to accelerate the sales cycle in measurable ways.

These are tough times, but they don’t change the way people learn, customers behave, or how good marketers differentiate their products for greater share and higher margin.

SEMI High Tech U Coverage

A Tale of Two Cities

I had the pleasure of hearing interesting perspectives on the industry dynamics and synergies of two of the world’s largest technology clusters: Silicon Valley and Dresden, Saxony.

At the Silicon Valley Lunch Forum on April 23, Art Zafiropoulo, Chairman and CEO, Ultratech Inc. gave a nice talk on the history and future of Silicon Valley. Like many observers, he traces the Valley’s tech origins to the founding of Stanford and the invention of the oscilloscope in the famed garage by Hewlett and Packard. With the founding of Fairchild Semiconductor, tech DNA started spreading, duplicating and intermingling. The Valley enjoyed a unique mix of geography, higher ed, specialized expertise, and eventually money that served as a magnet for innovators like Art the world over. A critical mass was established that kept the Valley in the forefront of the computer revolution, the communications revolution and the Internet revolution. He contrasted collaborative, flexible, open Silicon Valley culture with the insular and vertically integrated approach taken in Massachusetts along the Rt. 128 corridor and many parts of the world.

Art still sees the Valley as a center of innovation, but not manufacturing. The region still enjoys the output from best educated people in the world, but suffers from a variety of economic ills generated by the high tax, high spend policies of the State and national government.

Dresden, Germany is one of the great economic success stories in Europe. While only recently behind the “curtain,” Dresden is now home to the most dynamic high tech cluster in Europe (Don’t forget Grenoble, France).

While many people know in chips know Dresden and Saxony as the EU home of Infinion, AMD and Qimonda, its also the center of the world in photovoltaics. We recently a visit from Dagmar Vogt, CEO of Vogt Group, and Harold Bender, VP of Applied’s solar business in Europe who painted a compelling picture on why SEMI needs to be centered in the Saxony-Berlin region. Many of the same dynamics that accelerated Silicon Valley are present in the Dresden region.

The Dresden-centered solar industry encompasses nearly all of Saxony, including Leipzip and Thalheim, which many now call Solar Valley due to the many solar firms located there, including Q-Cells. Actually the region extends beyond Saxony to include Berlin, Arnstadt, and Alzenau. There’s competition between cities, but also synergy and internetworking. Like Silicon Valley, the area enjoys tremendous education and R&D resources from the University of Halle, Helmholtz Centre Berlin for Materials and Energy (HZB). IMEC, Fraunhofer ISE, and EU institutions like the European Renewable Energy Council (EREC).

While Silicon Valley is less of a manufacturing center, Saxony enjoys many advantages as a manufacturing center including low rents and wages.

What distinguishes both areas, however, is the synergies, the intermingling of smart people from business, industry and finance that makes both regions go. It is not the guided centralization that you see at Hsinchu Science and Technology Industrial Park in Taiwan or Shanghai, Pudong, but the informal dynamics of different industries and specialties combining to accelerate progress. SEMI tries to leverage this dynamic wherever we can when creating and developing expositions and conferences. We know that it’s what you plan and expect from a program that generates delight and the “a-ha’ moment, it’s the unexpected that frequently comes from outside your immediate industry and specialty that spurs innovation.

(Phot: Dresden Messe)

450 Now, Are You Kidding Me?

The International Sematech Manufacturing Initiative (ISMI) 450 mm wafer program announced in April equipment performance metrics (EPMs) for nearly 30 tool types. The EPMs were developed from supplier feedback obtained in two 450 mm equipment workshops, and ISMI has said they will be refined further

Beginning later this year, ISMI says the 450 mm program will put together an equipment demonstration line to process 450 mm single-crystal test wafers at 32 nm design rules. ISMI or speculation claims that Intel Corp, Samsung and TSMC will fund the project pilot lines capable of 22 nm processing by 2012.

ISMI reportedly claims that test wafer equipment development and demonstrations are on track starting by the middle of 2009 and that prototype 450 mm equipment is being developed now at various supplier sites. It is also claimed volume production could occur as early as 2014 or 2015.

Out of respect and timing, SEMI is not making public statements about the ISMI announcements, but the idea that they are spending time and money on 450 when the entire industry is suffering historical and unprecedented challenges is beyond me. Both Samsung and TSMC are shedding employees and nearly all the chip makers, as well as the the entire supply chain, are in intensive care. Nobody can afford R&D work on advanced scaling, much less wafer transition. Fab capacity is at historical lows and ISMI is spending money on 450? Are you telling me that ISMI members like Global Foundries, TI, UMC, National, Qimonda, Micron, and Toshiba want to see their precious membership dues being spent on 450? Does ISMI really want to publicly celebrate their efforts in 450 at this particular time, when any membership dues are probably controversial? During these tough times, how can the majority of ISMI members support 450 programs, at the expense of more broadly beneficial initiatives such as equipment productivity, energy conservation, and other areas that are immediately relevant to the industry's bottom line? This has got to seriously rankle a broad swatch of ISMI membership.

Revisiting the Depression

When the Depression hit, there were two cereal companies--Kellogg and Post. When consumer demand dived, Post did the predictable thing: it reduced sales, marketing and product development expenses. But Kellogg doubled its ad budget, moved aggressively into radio advertising, and heavily pushed its new cereal, Rice Krispies. By 1933, in the worst of the depression, Kellogg’s profits had risen almost thirty per cent and it had become the industry's leader.

In this nifty article from the New Yorker, James Surowieki also reminds us how Chrysler overcame Ford in the 1930's with a big brand push behind Plymouth, and how Kraft bet big on Miracle Whip. And remember, in 2000-2001 with the dot com crash and when 9/11 paralyzed the world, the iPod and Xbox were introduced, and the Pocket PC made their big push to overtake Palm. When others try to save their way of out of bad time, winners compete with new products, new ideas, and new plans. When others try to survive to fight another day, leaders make their own history.

New at SEMICON West—Extreme Electronics

Last week we announced Extreme Electronics--a “show-within-the-show" that features exhibits, online and onsite networking events, and a series of mini conferences focusing on emerging market opportunities in printed and flexible electronics, MEMS, high brightness LEDS, nanoelectronics, and other areas.

EE was created to give extra visibility to emerging markets and applications for semiconductor manufacturing technology. SEMICON West always has benefited from exhibitors and program content in emerging markets, but this year we wanted to make it the center of attention this year--not because traditional markets are so dismal—but because these areas represent distinct communities with distinct needs and requirements. Many of the exhibitors that specialize in these areas felt lost at SEMICON West and they wanted to dedicated marketing, advertising and email outreach activities dedicated to these smaller, but growing, niches. SEMICON West is already the biggest manufacturing show in the world for MEMS, high brightness LEDS, PV, nano, and probably printed electronics, but it didn’t feel like it to both attendees and exhibitors. Hopefully, this new approach will better serve these important, emerging areas.

One of the reasons why West has been successful in these markets is the critical mass of suppliers and buyers already in attendance. Last year West attracted over 4000 R&D engineers, 4500 manufacturing and production managers, and over 6000 senior executives from the world’s leading companies—many of whom are also entering new markets like MEMS, printed electronics and solid state lighting. Because many of the technologies and products needed in these applications are also used in conventional semiconductor manufacturing, a critical mass of exhibitors also are already participating.

We are also trying to jump start an online community in these areas that can serve buyers and suppliers throughout the year. We are utilizing the SemiNeedle social networking site to establish groups and engage in real-time discussions about technology and business issues related to these emerging markets. The discussion groups may be accessed via the SEMICON West website at www.semiconwest.org.

Extreme Electronics will be located on the SEMICON West show floor in North Hall at Moscone Center. All SEMICON West 2009 registered attendees may attend Extreme Electronics sessions and participate in the online Extreme Electronics communities for free. For more information about Extreme Electronics at SEMICON West 2009, please visit www.semiconwest.org.

SEMICON and SOLARCON China 2009

New Killer Apps for 2010 and Beyond

What are the hot new future applications that will help drive semiconductor manufacturing volumes in the upturn? What are the killer apps that will drive the market like the Internet, mobile phones and ipods? Here’s my take on a few (its a wireless world):

Ultra wideband- UWB is a radio technology that can be used at very low energy levels for short-range high-bandwidth communications such as Personal Area Networks (PANS), sensor networks, and cable replacements for audio video, printing and other applications. At least a dozen mainly venture-backed companies have been pursuing UWB for uses such as wireless USB links on consumer and computer gear. To date, relatively high prices as well as performance and regulatory hurdles have limited the market for the wireless links. We want this market to take off; we know it someday will. But when? With the recent demise of a couple of the early leaders, the jury is still out on UWB.


Zigbee- ZigBee is a low-cost, low-power, wireless mesh networking standard for wireless control and monitoring applications. The low power-usage allows longer life with smaller batteries, and the mesh networking provides high reliability and larger range. The initial markets for the ZigBee Alliance include consumer electronics, energy management, home automation, building automation and industrial automation. The technology is intended to be simpler and less expensive than Bluetooth. ZigBee chip vendors such as TI, Freescale and Ember typically sell integrated radios and microcontrollers with between 60K and 128K flash memory. The standard, and the chips that support it, will probably play a critical role in the Smart Grid deployment, as well as related home automation products. Zigbee has a broad range of applications and looks like it has some momentum. Looks like a winner to me.

NFC- Another interesting short-wave wireless technology is Near Field Communications (NFC). NFC seems to have evolved from RFID and will be an enabling technology for mobile payment systems. Operating at 13.56 MHz and transferring data at up to 424 Kbits/second, communication between two NFC-compatible devices occurs when they are brought within four centimeters of one another. Because the transmission range is so short, NFC-enabled transactions are inherently secure and intuitively safe.

NFC can be used with a variety of devices, from mobile phones that enable payment or transfer information to digital cameras that send their photos to a TV set with just a touch. The possibilities are endless, and NFC is sure to take the complexities out of today’s increasingly sophisticated consumer devices and make them simpler to use. Mobile payment systems make sense, but until I see they them widely used in places like Singapore, Hong Kong or Helsinki, I wouldn’t bet on them in the short term.

Cloud Computing--The concept of Cloud Computing received a fair amount of talk at SEMICON Japan by folks like Terry Higashi and Takeo Hoshino of METI. The concept revolves around Internet-based services, large server farms and ‘software as a service.” While it might the drive the need for better chips to enable lower power computing, I don’t see it driving volumes. The trends toward connecting everything to the net—including refrigerators, ATMs, industrial machinery, security cameras, etc.—is already in full swing. I don’t see it providing a step function increase in chip volumes, but it will fuel a more accommodating world for Netbooks and Internet appliances.

WIMAX- According to Infonetics Research, combined worldwide equipment revenues were up only 3% from Q1'2008 to $402 million, and we assume they went into the crapper in Q4. Before the financial collapse, Infonetics predicted that by 2011, 110 million users of WiMAX technologies are forecasted. The WiMAX Forum now claims there are over 400 WiMAX networks deployed in over 130 countries. Developing countries have been the engine for WiMAX market growth, with Central and Eastern Europe, the Middle East and Africa, Central and Latin America, and parts of the Asia Pacific being hot-beds of activity. Intel is the current leader in chipsets, but there are nearly 20 companies are now producing baseband chip-sets for mobile WiMAX and there are probably 15 suppliers of WiMAX radio transceiver chips (Forward Concepts). That bodes well for easy adoption by handset makers and network managers. Bandwidth-makes-sense. Count on WiMAX for a nice contribution in chip volumes over the next 5 years.

Other more familiar applications that will drive semiconductor volumes in the future will be solid state drives, Wi-Fi (see a lot of upside), mobiles phones (both high end and low end), and handheld electronics like ipods (more video) and ebooks. The real driver though will be general economic health, especially in developing regions.