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Thursday, July 29, 2010

It’s a Growth Industry…Again

I should be the last person who needs reminding that the semiconductor industry is a growth industry. But then again, I’m not only one who needs reminding.

The chart below from Bill McLean of IC Insights illustrates the underlying, long-term strength of our industry. To use his terminology, “demand never dies, it is only deferred.” From 99-04 (including the dot com crash) chip unit volume increased 9.5%, from 05-07 the market grew 14%, since 2008 a 10% trend line is appearing. Chip revenue growth is also firmly in the growth category. In the 90’s, it grew an average of 14%; from 2001-2007, it grew 9%. This year expectations are that revenue growth will be 28-30%. Industry analyst, Jim Cavello of Goldman Sachs said many times during SEMICON West, “chip growth may go up and down, but it averages 10%.” World GDP growth averages from 2-4%, chip have been more than double that, and will be for as long as we can see.

Rick Hill, CEO of Novellus recently told EETimes, "The way we see the semiconductor industry today is a lot like it was back in the mid-90s," Hill said. "There were fundamental drivers driving the business upward, as opposed to the mid-2000s, where it was more of supply-driven expansion in the industry for semiconductors."

He said that the three main growth drivers in the 90’s were infrastructure, fear uncertainty and doubt (FUD), and the PC and similar forces are at work today. Key forces driving demand today, according to Hill are, Windows 7 and telecom infrastructure, cybersecurity (FUD) and shifting consumer demand (primarily China and India).
My opinion is that there are no longer any dominant growth drivers; there are many growth drivers. There are mobile phones, ipods and ipads, TVs, cameras everywhere, smart autos, smart homes, smart everything . It’s ubiquitous, pervasive demand for all things digital. It’s like food and water—growing with human progress—but a growth industry because chip content in nearly everything that touches our lives is increasing. Its not only about lifestyles, its about life itself as semiconductor technology is embedded in cleantech and climate change mitigation in things like solar panels, smart meters, solid state lighting, and electric cars. We need semiconductor technology not only to live well, but to live period.

Now, the reason we need reminding that we work within an exciting growth industry is because of the mega trends and forces that always seem like they are trying to overwhelm us. One of the trends is super-cyclicalality. It’s hard to enjoy the good times when we’re either recovering from the last slump or anticipating the next one. Another reason is the hyper competiveness of the industry. If you’re not essential—as a person, as a product or company—you’re gonna get optimized out. There’s no room for softness or second best. The industry has been bred to seek and destroy inefficiencies, whether they are costs, process steps or people. We’re a paranoid industry, said Andy Grove, always fearful of the slump, the next cut, the next innovation, or the next big thing.

We may be a growth industry, but sometimes we sure don’t feel like it.

Friday, July 23, 2010

Using SEMICON West to Achieve Member Objectives

The recently-concluded SEMICON West is the center a what seems like a thousand meetings, ten thousand products and hundreds of thousands of exhibitor objectives. Much has been said in press releases, media stories, internal memos and conversations about the show in general, as well in presentations on the record at the Virtual West and in the Powerpoint presentations now posted on the SEMICON west website about the industry, and the technologies and products that comprise our marketplace.

What isn’t so obvious is how much SEMI-- the association, not the exposition organizer—accomplished at SEMICON West. The exposition is not only a platform for exhibitor initiatives and industry news, but also for collective industry interests advanced through SEMI-sponsored events and programs. The list of how much the association does at West to push industry interests demonstrates the difference between a private event organizers and an association event organizer. Our mission is not only to provide exhibitors a great place to build brand, learn about trends and technologies, introduce products, and meet customers, but also to contribute to the collective goals of the industry. We don’t make money from these programs and activities--and they are often hard to do--but they represent the heart of our mission.

I think the list below is an impressive list of activities—all done to support our best understanding of how to meet member needs:

• Advance investor and financial market education through Bulls and Bears presentation, and market data programs
• Held over 80 standards committee and task force meetings—the breadth of industry sectors and subjects are too numerous to count
• Held the annual SEMI Membership Breakfast to introduce new Board Members and publicly discuss SEMI yearly financial results
• Held North American Advisory Board meeting to gain input for SEMI programs and priorities, especially public policy
• Held SEMI LED steering committee meeting to gain input on SEMI global LED activities and priorities
• Conducted first annual PV Fab Managers Forum to bring together solar manufacturers and suppliers to seek common ground and mutual issues
• Hosted the annual Environmental Health and Safety luncheon to reinforce the industries commitment to sustainable business practices
• Updated members on the SEMI public policy programs and lobbying efforts in Washington DC
• Organized and hosted an Import-Export policy discussion with Dept of Commerce at SEMI headquarters in San Jose
• Provided member education through 200 hours of free seminars and workshops
• Held an Energy Conservation Workshop, a Climate Protection Council Meeting, Sustainability Practitioners Seminar, and other activities to assure our industry remains the model for EHS Best Practices worldwide.
• Sponsored industry special interest meeting by the Chemical and Gases Manufacturers Group, Silicon Manufacturers Group, and Collaborative Alliance for Semiconductor Test (CAST).
• Advanced member interests and education on California and Federal energy policy through workshops and meeting attended by government officials, legislators and members
• Helped advance the protection of intellectual property through PAIM III (Product Authentication Information Management) programs and meetings by Secondary Equipment, Services and Technology Group
• Helped improve industry planning and forecasting through the Market Symposium and meetings with SEAJ
• Helped advance science and math education through High Tech University planning and fundraising

I know I missed a few things. Can you help me remember?

Friday, July 02, 2010

Best of West Award

One of the fly-on-the-wall pleasures I get from helping manage SEMICON West is the unique ringside seat I get for the “Best of West” awards. We created the award a few years ago to recognize “important product and technology developments in the microelectronics supply chain.” The judges include some of the brightest minds in the universe and it’s a thrill to hear them to discuss the merits of various submissions.

Join me to announce the winner during a special ceremony on Wednesday, July 14, 2009 at 1:00pm (TechSITE North, North Hall, Moscone Center).

This year’s finalists are:

-JVX7200™ SiGe Metrology Tool from Jordan Valley Semiconductors Ltd. combines advanced high-resolution X-ray diffraction (HRXRD) and X-ray reflectivity (XRR) channels to provide composition, thickness, strain, relaxation characterization and metrology for epitaxial layers such as SiGe and SiC, which are required for strained silicon processes. Additionally, the XRR channel can provide valuable information on other thin-films, such as those found in high-k gate stacks. The tool is capable of providing rapid, in-line measurements and analysis on both blanket and product wafers.

-VHX-1000 Digital Microscope from Keyence Corporation is the first system that integrates the functionality of stereoscopes, metallurgical microscopes, measuring microscopes and scanning electron microscopes into an all-in-one imaging, measuring and report-generating microscope. The VHX-1000 has the ability to quickly and easily capture fully-focused, high-resolution images for analysis, providing solutions for some of the most common difficulties in modern material inspection.

-NSR-S620D Ultra-High Productivity Immersion Scanner from Nikon Corporation incorporates the Streamlign platform and a 1.35 numerical aperture lens to satisfy the aggressive demands of double patterned lithography at 32 nm, with extendibility to 22 nm applications. The S620D targets 200 wafers per hour, maximizes yield with 2 nm overlay and superior CDU, and enables rapid installation.

A disappointing aspect of the Awards is how few exhibitors take advantage of the free opportunity. The only serious requirement is that it must be a new product introduced this year. It amazes me that so many exhibitors--big companies with living, breathing marketing staffs--don't submit an entree. Its not that they don't have new products; I see their press releases, websites, hear from analysts, and see their presentations at other industry events.

Maybe they are just afraid to lose (entrees are confidential)? Maybe they are too busy preparing Powerpoint presentations, going to meetings, and immersed in booth planning details. I don't get it. If I had a new product that people sweat blood and tears to develop, and spent money to promote it at a trade show, I would be livid that no one could take the time to enter it into the Best of West award program.