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Friday, February 20, 2009

Equipment Bookings Lowest Levels Since 1991

North America-based manufacturers of semiconductor equipment posted $285.6 million in orders in January 2009 (three-month average basis). The bookings figure is about 51 percent less than the final December 2008 level of $579.1 million, and about 75 percent less than the $1.14 billion in orders posted in January 2008.

Bookings are at the lowest levels since 1991.

Sheeeesh, 1991!

Can you remember 1991? It was two years before Marc Andresson developed the MOSIAC browser. The World Wide Web as we know it wasn’t even developed. Few people knew what a modem was. Windows and SoundBlaster and Netscape hadn’t been released.

In cell phones, GSM, or 2G technology had just been invented. No one had ever sent a text message before. the Microtack flip phone was $3000 bucks.

1991. Oh man.

Thursday, February 19, 2009

Obama Signs Semiconductor Industry Bailout

February 20, 2009, WASHINGTON, D.C.— Racing to reverse the country’s economic spiral and decline in technology leadership, President Barack Obama signed the $5 billion semiconductor industry support plan. The plan would provide semiconductor manufacturers tax and other incentives for locating and expanding chip fabs in the US.

So what’s the most surprising aspect to this faked news? The idea that Congress has the semiconductor industry on their radar or that they could understand and agree upon a plan that would stem the tide of technology outsourcing?

A number like $5 billion (Intel will spend a total of $7 billion on capital expenses in the US this year) could have enormous impact. Even though the recent stimulus bill had $30 billion for a smart power grid and energy efficiency measures, $20 billion in tax incentives for renewable energy, $19 billion to accelerate digitizing health records, and even $7 billion to provide broadband to underserved communities, it still seems shocking that Congress would give $5 billion to semiconductor manufacturing.

Internet access, digital TV, Green, roads and sewers, state government all get a piece.

Semiconductors…zilch, nada, zed.

Wednesday, February 18, 2009

Reducing the Cost to Participate in SEMICONS

The global recession and semiconductor industry shutdown has created enormous pressure on SEMICON exhibitors. Virtually every mid-to-large SEMI member has announced layoffs and is experiencing severe financial crisis.

In response to these pressures, SEMI is working hard on aggressive cost cutting and value-enhancements to our shows. Because booth space costs often represent only one dollar in four of the total cost to exhibit, effective show management requires us to work closely (beg, negotiate, hammer, etc.) contractors, facilities, hotels, shipping firms—even exhibit managers—to affect the total cost of participating in SEMI events. For every event in every region, we are looking at across-the-board solutions to reduce exhibiting cost, including making the necessary improvements to our own cost structure to enable stable, if not reduced booth space prices, for 2010 and beyond.

Here are some of the some of the current efforts to reduce costs to exhibitors:

• Renegotiated service contractor and subcontractors contract at SEMICON West resulting in up to 10% savings for many exhibitors
• Moved SEMICON Europa location to Dresden for lower exhibitor costs and higher quality attendance. Service contractor costs have been reduced by as much 50% and hotel rates 30% less
• Developed and introduced low cost turnkey exhibit booth, and executive meeting suite options for West, Europa, China and Singapore
• Conducted exhibitor training sessions on lower cost exhibiting for SEMICON West
• Added new buyers through SOLARCON co-located events in China, Korea and Singapore. Exploring other co-location and partnership options to add audience value and reduce costs
• Went out for bid on international shipping and selected new vendor with lower rates
• Aggressively renegotiating facility contracts for 2010 in West, Singapore, Japan, Taiwan and China

I promise you increased efforts on cost reduction will continue. I firmly believe that the global economic crisis is particularly affecting the trade show industry, shifting the balance of power back to show organizers like SEMI. In a buyers market, we should be able to work with other organizers to pull back labor rates, contractor services, hotel rates, and facilities costs. We plan to actively partnering with other shows and industries to see if something can be collectively done to pull back the total cost to exhibit in every region where we operate.

Great expositions are the product of great collaborations between exhibitors and show managers, and during this time, it is imperative that SEMI wield as much power, influence and ingenuity to help our member exhibitors. As an association, we take our role as representative for exhibitors very seriously and we are working night and day to make SEMICONS the best possible value they can be.

Wednesday, February 04, 2009


Halleluiah. SEMICON Korea was a successful show, achieving both attendee registration expectations and exhibitor satisfaction ratings based on preliminary results (we will have official results and more quantifiable satisfaction ratings at a later date).

During these economic times, this wasn’t a certain outcome. With industry cap spending paralyzed, and the memory market in atrophy, we didn’t know what to expect with attendance in Korea. As you might expect, companies are slashing marketing budgets and exhibitor cancellations are occurring at industry events worldwide. Compounding the normal economic dread, rumors of a Samsung reorganization had us all fearing that no one who show up.

But exhibitor cancellations didn’t really materialize in Korea. The show didn’t pick up the normally late registering marginal exhibitor, but the core exhibitors still came and showed their best stuff. Final results: 460 exhibitors, occupying 1300 booths.

Total visitors topped 23,000, a little more than last year. The crowds were as you expect, the right people came, exhibitors saw who they wanted to, and there was that typical SEMICON energy of folks working the show with purpose. Of course, spending isn’t happening and this makes people glum, but exhibitors had good attitudes and often expressed reasonable expectations for brighter times just around the corner.

Part of the good attendance was the added draw of PV products and services with the inaugural SOLARCON Korea. This co-located PV event featured 100 booths and a complete 2-day conference. Korea is a sleeping giant in the PV world, with strong government incentive fuelling local demand, and emerging equipment, materials, cell and module powerhouses serving the export market.

SEMICON Korea is also unique in that it features a strong solid state lighting segment, drawing additional synergies for this related industry.

For SEMI and many of our exhibitors, SEMICON Korea was seen as a potential bellweather for industry events in 2009, specifically: would buyers come during these difficult times? Fortunately for our exhibitors, the answer is yes. In fact, we may see regional SEMICON events benefiting from the restrictions on international travel. And, there’s always the interplay between money to spend and time to spend it. When orders are booming, some people are too busy to attend events; when demand swoons, they have plenty of time, but no money to spend.