SEMIspice

Head and the Heart Served at ISS

2012-01-24T15:40:00.000-08:00

When you’re in the event business, it’s easy to suffer from the euphoria affect: the tendency to over-rate the quality of an event based on the immediate relief that everything went as planned and nobody screwed up. In my position, its important to congratulate the staff for a job-well-done and be thankful for the valuable information you receive and opportunity to network with old and new friends--so all well-attended, reasonably-interesting events receive a generally positive appraisal. Nobody wants to nitpick or scrutinize the odd speaker choice in casual post event conversations. Its also easy for organizing committees to self-congratulate themselves on event quality because the hotel performs to expectations, speakers showed up, and no fatal errors were encountered. And of course, as an organizer, attendees and speakers seek you out and congratulate you on job well done and rarely complain about their hotel room thermostats or how they were disappointed in the crème brulie. Attendee surveys typically don’t help much; they are invariably positive (people are polite), inconclusive (people differ on speakers, topics, amenities) and infrequently point to obvious improvements.

Saying that, I think this year’s Industry Strategy Symposium was the best I’ve attended. The reason it was a great conference is primarily because these are uncertain times and ISS did a great job of framing that uncertainty for executive analysis and debate. I believe this was the Committee’s objective in organizing the conference and they had a lot to work with. Past conferences focused on the basic questions of chip market growth and capital spending with a smattering IDM and new technology stories. Today, uncertainties permeate technology challenges, the customer questions, and the economic outlook.

William Holt from Intel and Bernie Myerson from IBM did a great job in illustrating how scaling to the next node has become so complex. Enormous amount of science and process development is now required to fix all the problems produced by the next generation of nanoscale structures. FinFETS, III V materials, graphene, CNTs are all being used to address the secondary effects of scaling and the enormous R&D is for big boys only. John Chen from Nvidia showed data that demonstrated that scaling was becoming less economical and the engine of profitability that worked so well for leading edge chip manufacturers hasn’t been running so well. It was nice to hear the science guys confidently explain that “we’ve always solved unexpected problems” but I wonder if I was the only one who thought that the challenges are mounting in cost and complexity maybe the past won’t repeat itself.

Complicating the supplemental requirements to make next generation chips work, we have the great uncertainty of EUV itself. James Koonmen from ASML spoke directly to the issue of EUV availability, giving a roadmap of sorts that had the audience straining to understand the probabilities of EUV throughput improvement in 2013 and beyond. It may have been the first time I heard the word “industrialization” used in the equipment arena and thought, like India and Africa, sometimes the word “industrialization” means more hope than promise.
Market outlooks ranged from another modest grow year to “global economic collapse.” Duncan Meldrum from HIS and Robert Fry, senior economist at DuPont, saw a flat-single digit growth year ahead, but a promising 2013. Handle Jones saw 2012 more optimistically, but thought 2013 would be a downer. But what’s a little a softening in chip demand when David Townes, managing director of Needham & Company, says “we are past the tipping point in liabilities…the macro conditions for future real capital appreciation is dire.”

This picture of technical and economic uncertainty—this mosaic of incertitude—served as the perfect backdrop to the 450 mm discussions, and other points about the semiconductor industry structure. How we did things in the past are no longer a guide to how to we will progress in the future. Companies have to work together differently now. Negotiations will be complicated and delicate. Executives in our industry will have to make enormously important decisions on where to spend money, how to work with their customers and whether an exit strategy is the best option.

It is exactly in this environment--where the industry direction is not certain, when the right answers are not clear, and the strategic choices are so important-- where a strategic executive conference like ISS becomes most valuable. And in this environment I thought the critical data, informed analysis and key player participation were expertly constructed by the ISS program and Committee.

But heady strategic brain candy does make a great conference alone. I was thrilled to see so many attend the Zone 5 wine party on Tuesday night. It was a big time networking affair with serious conversations being conducted in an elegant space, lubricated with delightful liquids. And finally, a good helping of heart was also served at the gala dinner where Stan Myers was honored for his long, steady, invaluable service to the industry. Seeing James Morgan and Ken Levy speak of Stan and their many years of SEMI engagement and support reminded everyone of the powerful connections we all have to this great Information Age and how we follow in giants footsteps, enabling the future and making the world a better place.

New SEMI YouTube Channel

2012-01-24T15:37:00.000-08:00

We've set up a SEMI YouTube Channel where we've featured some video interview from ISS.

Gen 8 OLED Fabs Coming Soon

2011-12-01T17:15:00.000-08:00

I’m starting to get very excited about OLED technology. Here’s why.

What is the forecast for OLED technology?

Merrill Lynch estimates OLED displays will grow from $4B in 2011 to $20B in 2015 and as high as $35B in 2017. Samsung alone is expected to spend $5B a year on OLED capex annually for the next several years. Only Samsung has announced a Gen 8 plants as of December 1, but most display manufacturers have pilot plants running in 2012. Others panel makers including AUO, CMI, LGD are expected to announce Gen 8-size fabs perhaps sometime in 2012 (for completion in 2013-2015). Japanese makers Sony, Toshiba and Hitachi are expected to announce plans in the coming year, and BOE of China announcing Gen 5.5 and Gen 8 plants for 2014. Given the speed with which LEDs backlighting penetrated the TV market, these Gen 8 OLED fabs could be accelerated. Some people are speculating that Apple iPad will be move to OLEDs (maybe 3D OLEDS) which could further accelerate the industry.

Why are OLED displays expected to be popular?

OLED displays are currently used in smartphones and will migrate to tablet and TVs once Gen 8 production gets established in 2013 and beyond. OLED displays are thinner, lighter, more energy efficient, offer better picture quality, and faster response times than LCD. Plastic substrates and flexible displays will replace glass for cost additional cost savings and feature benefits.

Who are the top suppliers?

According to the Merrill Lynch report, small cap suppliers in Korea are currently serving Samsung at the Gen 5.5 level. At larger sizes, Applied Materials, TEL, Dainippon Screen, and Ulvac are expected to play. Material companies include DuPont and Dow in the US, many suppliers from Japan including Ube Industries, Hodogaya Chemical, Toyo Ink, Idemitsu Kosan, Bando Chemical, and BASF and Merck from Europe.

What is SEMI doing to serve the OLED market?

Many SEMI members who serve the LCD market are also expected to serve the OLED industry. Currently 14 of the top 15 equipment TFT-LCD equipment suppliers are SEMI members. Some SEMI standards are expected to transfer to OLED operations. OLED technology and manufacturing information are key subjects in SEMI FPD exposition conferences (FPD China and Display Taiwan). OLED technology is critical foundation for our Organic Electronics Conference, held in conjunction with SEMICON Europa. OLEDs are also a popular conference topic at SEMICON Japan and SEMICON West. SEMI believes that many of the same processes, services and Standards operations that have helped scale the semiconductor industry will also be relevant to the emerging OLED industry.

2012: Year of SSL Standards

2011-11-23T12:49:00.000-08:00

Next year will mark the most significant milestone in the development of the solid state lighting (SSL) industry with the emergence of critical standards in US, Europe, Japan and other key locations around the world. Important SEMI LED manufacturing standards will also go to ballot next year, but the SSL industry will remember 2012 as the year where key economies began to face the need for end-product standards, certifications, and consumer product labeling.

Beginning on January 1, consumer light bulbs will require the new The Lighting Facts label that has previously been a voluntary label offer by the DOE. The new labels will help educate consumers about lumens and steer purchasing decisions away from “watts” to more energy efficient choices. The label will include a light bulb's brightness (lumens), energy cost, life, light appearance (CCT) and wattage. CFLs will also carry a mercury disclosure. These changes are critical to consumer education, product testing and standard labeling necessary to accelerate SSL adoption with LED-based lighting.

Europe’s Ecodesign Directive requires energy efficiency labeling for lightbulbs, but does not address color quality (2012 will effectively ban all incandescent bulbs in the EU). LED products are expected to earn an A or A++ rating, separating them from CFLs. 2-3 lamp regulations are currently in the pipeline, but regulators are reportedly “struggling” with LEDs. Optical requirements based on luminaire output ratio rather than luminaire efficiency are expected as early as mid-2012. From participants in the ErP process, the philosophy of minimal performance requirements is expected to evolve into rigorous performance, color quality and useful-life standards that are intended to prevent sub-standard LED products from being sold in the EU. Specific testing and enforcement issues have yet to be addressed.

In Japan, LED lamps will be subject to the Electrical Appliances and Materials Safety Act requiring the PSE or “DEN-AN” mark, by July 1, 2012. This is a mandatory, self-inspection, electrical safety labeling requirement. A range of conformity standards from JELMA (JEL), JET, J-IEC, UL Japan, and JIS will be required.

China, Taiwan, Hong Kong will also be introducing voluntary energy efficient labeling for SSL. The China program, announced early in 2011, is just becoming visible in retail. It is expected they will become prominent in 2012. China began voluntary certification program through China Quality Center (CQC) this year and it reveals the importance of certifications and labeling. Of the nearly 1000 applications made for CQC certification, only 20% passed. In street lighting systems, only 11% passed. Of those that passed, 90% were non-Chinese products manufactured by known international leaders. All those products that failed CQC are going to be sold somewhere. All those manufacturers who do not produce or use high-quality LEDs or know how to apply drivers and other systems to luminaires are going to be entering the global SSL market. Unless we want to dampen the market for LED-based lighting like we did with the introduction of CFLs—with poor quality, inconsistent specs, and poor certification programs that kill consumer confidence—we need to support effective, thoughtful, and meaningful certification and labeling programs. Next year will just be the beginning, more mature and effective market development and certification programs will be required support a growing SSL industry.

Robert Galvin, Motorola (1922-2011)

2011-10-20T11:32:00.000-07:00

It is one of the great blessings in my career to come into contact with some of the most brilliant minds on the planet. Bob Galvin, former chairman and CEO of Motorola, was perhaps the greatest person I have ever met.

While the world mourned Steve Jobs, Bob’s passing seemed to receive little notice. But without him, there wouldn’t be an iPhone or iPad and Apple may have disappeared long ago.

Interestingly, my father, who served with Bob on the Board of IIT, said he was the smartest man he ever met. We both marveled at his ability as a public speaker; he could present complex ideas in compelling, intricately organized speeches, without notes or PowerPoint, that left mezmerized and inspired.

I knew him of course during my days at Motorola. He was no longer CEO when I joined the company, but he was the star of many employee events and a living legend.
Motorola at the time was among the most admired companies in the world. A leader in both semiconductors and wireless communications, Bob had created a unique firm based on leading edge technology and managed by rigorous management techniques.

I remember vividly his story about Demming and his first visit to Japan—about how Demming told the Japanese the challenge wasn’t to eliminate waste (that’s easy); finding waste was the key to continuous improvement. I retell the story all the time and use the lesson regularly.

In hindsight, it shouldn’t have been a surprise to see the company flounder without his leadership. Only a once-in-a-lifetime intellect like Galvin’s could have managed the synergies between semiconductors and end-products like cell phones and network infrastructure. He was smart enough to understand the demanding imperatives of different industries, manage the very different business sectors and titan personlities, and probably could have sustained the diversified strategy. But he was special.

He also knew how to leverage the power of people and culture at Motorola. Motorola was a family business and most employees learned the family lessons and respected the family way. At one time, the Motorola culture was a powerful and valuable asset.

When I see the global adulation that Steve Jobs is deservedly receiving, I can’t help but compare to him to Bob Galvin. Steve Jobs used his drive and consumer sensibilities to re-imagine and transform the personal computer and mobile markets. Bob Galvin was essential to creating these markets in the first place. Jobs was a savvy investor in companies like Pixar and a brutal manager known for emotional tirades and personal attacks on staff. Bob Galvin invested his time in helping make the Illinois Institute of Technology (I received my IIT MBA in 87) a great urban university and was a positive inspiration to all he met and led.

Great intellects like Bob Galvin and Steve Jobs change the world. Great people like Bob Galvin change the world for the better.

Better Lighting Through Quantum Dots

2011-08-19T09:27:00.000-07:00

GlobalFoundires Fab 8 Tour

2011-08-17T16:30:00.000-07:00

GlobalFoundries ITDC Fab 8 from HardOCP.com on Vimeo.

Estimates Vary Widely on Long-Term LED Forecast

2011-08-08T15:10:00.000-07:00

There has been a wide-range of estimates on the market size for LEDs in 2020. A frequently-cited Philips estimate has nearly the entire $100+ billion lighting market converting to LED solid state lighting. A recent McKinsey report sees $60 billion in SSL LEDs by 2020 while a Morgan Stanley estimate has the total LED market reaching $70 billion by the end of the decade. On the conservative side, Yole sees the total LED market reaching only $27 billion in 2020, up from $12 billion in 2011.

The reason for these wide fluctuations in market size are varying estimates of how much LED-based lighting will displace conventional lighting in residential and commercial applications. In the near-term, many countries have passed measures to phase out incandescent light bulbs for general lighting. The European Union began phasing incandescent lighting in 2009. In the US, the Energy Independence and Security Act of 2007 requires all general-purpose light bulbs that produce 310–2600 lumens of light be 30% more energy efficient, effectively banning incandescent light bulbs. The efficiency standards will start with 100-watt bulbs in January 2012 and end with 40-watt bulbs in January 2014. By 2020, a second tier of restrictions would become effective, which requires all general-purpose bulbs to produce at least 45 lumens per watt.

While efficiency standards underlie the SSL optimism, the big beneficiary will be compact fluorescent lighting or CFLs. Current CFLs already meet the 2020 US energy efficiency requirements and consumers are familiar with them. While CFLs often produce poor light and contain environmentally harmful mercury, they will be tough to displace with LED bulbs. Consumers won’t easily be swayed by a cost-of-ownership argument; purchase price will probably still be the principal decision criteria for home lighting replacement. CFLs are also easier to buy having benefitted from years of use; buying an LED bulb is still a bit bewildering for the average home owner (what’s lumen, I just want a 60-watt light bulb?). And, CFLs will also decline in price.

Another hurdle for SSL adoption will be LED and SSL lumenaire quality. According to recent Department of Energy (DOE) Lighting Facts report, 67% of current A4 replacement lamps on market fall below 450 lumens (40W equivalency), 56% fall below acceptable color quality. Only 2 commercially available LED reflector lamps offer comparable light output than 75W PAR 30 lamp. Another report by the DOE (CALiPER Summary report, April 2011) tested 33 LED-based lighting and found “the disparities between high performing and low performing products are striking.”

In addition prominent quality problems in SSL, the report also concluded “to be able discern whether an SSL replacement lamp would performance expectations, a consumer would have to highly informed.” Quality and consumer education also plagued the roll-out of CFLs, retarding the market for a nearly decade.

And the challenges faced with displacing low-cost CFLs appear will more difficult with linear fluorescents. The DOE Lighting Facts report found that LED replacements for 4-ft linear fluorescents produce on average one-half the light output and use more energy.

The SSL industry has a lot to overcome to achieve widespread penetration into CFL and fluorescent applications, the two largest lighting technologies in use today. While most observers believe it will ultimately occur, the speed of adoption is very uncertain.

Renesas Earthquake Recovery

2011-08-08T14:14:00.001-07:00

Plastic Electronics

2011-06-27T09:16:00.000-07:00

LED Substrate Surprises

2011-06-22T16:09:00.000-07:00

Last week at the Taiwan Photonics Festival, Samsung made the announcement they have successfully produced HB-LEDs on 8” sapphire wafers. As most industry leaders are moving to 6”, this step could signal a disruptive era in cost reduction with widespread implications. A move to 8” further distances those still at 2”, 3” and 4” from the price leaders and makes the vast supply of used 8’ equipment (PECVD, steppers, etch, cleaning) for silicon more-readily available for LED fabs.

The announcement may be related to Monocrystal’s cryptic announcement in February that they have supplied 8-inch-diameter, c-plane, epi-ready sapphire substrate to an unnamed LED maker. Monocrystal, the Stavropol, Russia-based sapphire wafer supplier, has been supplying 8-inch sapphire substrates for R&D on RFIC application for two years, but the LED interest in 8” was a bit of shocker.

In January, Rubicon Technology announced 12-inch sapphire substrates were now available at various diameters up to 12 inches, specifically mentioning LED, but without a customer acknowledged. The company describes it as “the largest high-quality sapphire wafer ready for production of LEDs.”

With 6” still in roll-out with assumed yield challenges, I’m not sure anyone was taking 12” seriously in January. But the more believable 8” step is just the sort of killer move that Samsung could be expected to make in LEDs.

Meanwhile, Lattice Power Corp. announced that together with ShineOn Inc., they have demonstrated the world's first high-brightness LED product based on GaN-on-Si technology. Aimed at general lighting applications, Lattice claims the product is suitable for indoor lighting, incandescent replacement bulb, flashlight and even direct-lit LCD backlighting applications. Both Philips and Bridgelux have announced R&D developments for GaN on Si, but not commercial product.

Substrate innovation and size advancements will be a critical competitive factor in LEDs for several years. These and other announcements promise a lot of smoke and fire for the foreseeable future.

OLED Lighting Research from Fraunhofer

2011-06-22T11:45:00.001-07:00

Solid State Lighting Systems

2011-06-06T08:21:00.001-07:00

Interesting video on the application of SSL networks using LED-based lighting.

Crisis Management in the Semiconductor Industry

2011-05-26T17:41:00.000-07:00

About 20 years ago, while I worked for Motorola, the company began a major initiative to develop and implement effective crisis management plans in support of all its operations worldwide. Several of our fabs and factories had various levels of crisis management planning and processes in place, but there was no standard process in place, and in fact, many major operations had no plans in place at all. Like most large companies, Motorola had experienced a range of crises in their operations around the world, ranging from workplace shootings, fires and explosions, and media alarms about product safety or executive behavior. I remember going to a two-day meeting in Las Vegas where facility managers, division heads, PR and community relations folks from multiple business units got together to discuss and formalize a standard process for crisis preparation and planning.

It was a big deal; a major corporate initiative.

Those memories came back a few weeks ago upon hearing Keenan Evans, ON Semiconductor’s Sr. Vice President Quality, Reliability and EHS, discuss the company’s Crisis Prevention and Management Plan, at the ConFab in Las Vegas. ON, formerly Motorola’s semiconductor operations, demonstrated how advanced crisis management planning can help save lives and respond effectively after the devastating Japan earthquake and its after-effects. While it was 20 years ago, I still had the sense that the initial meeting in Las Vegas was the beginning of a process that culminated in a swift and successful response to a nightmare disaster.

Evans provided a great overview of the planning principals and execution details that were effective in minimizing the earthquake’s impact and quickly getting operations up to full production status. He told an interesting story about how good crisis management plans need more than binders, procedures and protocols, but a commitment to regular exercises and drills. It requires the kind of thankless planning and preparation that many people don’t want to do, that don’t get anyone promoted, that you hope you never to execute. Buts it’s the kind nitty gritty work that large, complex organizations have to exist in our complex world.

Evans described a three-tiered response to the earthquake/tsunami. First, an Emergency Response Team was immediately activated to address personal safety through building evacuations and critical risk assessments. Then, the Crisis Management Team worked to accurately assess the impact of the emergency. Finally, Business Continuity Planning actions were put into place to address short-term needs and begin to meet longer term needs.

Within the first hour all global operations were notified of the events through established messaging and Sharepoint alerts. In the next 10 hours, confirmations that all ON fab personnel were safe, as were all ON personnel traveling in Japan. Initial customer inquiries were received in these first hours and status messages were sent to all employees, and posted on the company website.

Between 10-24 hours after the event, the ON Business Continuity Team convened and began to execute pre-established actions plans addressing global supply chains, planning, logistics, security, HR, EHS, facilities, customer service, and insurance. Within the first 24-hours, the BCT began assessment of local infrastructure stability, impact on materials and chemical suppliers, and alternate sourcing opportunities identified. While only one of ON’s facility sustained major damage, power outages and radiation leaks began to be growing concerns.

Despite rolling blackouts, in one week three of ON’s five sites returned to production. The major immediate issue for ON was the availability of bulk chemicals needed for water and waste water treatment. With damaged roads and mass transit, logistics were impaired and several key suppliers had sustained production stoppages. ON dispatched a Global Sourcing Team to identify and qualify additional suppliers in areas considered at risk. To plan for ongoing power outages, rental generators and co-generators were pursued.

While ON was rapidly restoring their production lines, ongoing news coverage of the nuclear event, electric power shortages and radiation leaks initiated widespread customer inquiries and demands for delivery guarantees, special labeling assuring radiation-free parts, and other requirements flooded ON operations. Many of the demands would impossible to meet even under less-pressing time constraints, but diligent communications and customer service were able to restore customer confidence and order schedules.

By week two, chemical supply issues were solved and alternative sourcing of key supplies were put in place. Power stability was addressed with the purchase of several power generators and the implementation of a co-generation system began. Local transportation and logistics began to normalize and radiation levels were confirmed at normal levels at all ON sites.

As April came, all of ON’s sites returned to production and the power situation further stabilized. Customers received daily delivery schedules and even insurance carriers visited ON sites to begin the financial processes. By end of month, the new generator sets were dispatched on site (see photo at right) and the co-generation system was connected. In addition, alternate supplies of specialty substrate materials were secured and alternative BGA substrate sources were in qualification.

The company announced on May 4, “Of ON Semiconductor’s six manufacturing facilities in Japan, five came back to full production capacity and the sixth factory is ramping towards full production.”

In summary, Evans confirmed that ON Semiconductor’s P2R2 approach worked successfully. ON’s inter-site and global production network contributed to restoring production capacities and solid relations with a global supplier base helped assure a rapid recovery. Many of these tactics are in place at other fabs and key suppliers, confirming the ability of the Japan industry to respond effectively to an extreme and unprecedented event.

Rick Wallace, KLA-Tencor, on the Industry

2011-05-25T11:53:00.000-07:00

Q-Cells Rocks

2011-04-08T08:20:00.001-07:00

High Tech U Reunion

2011-04-04T15:05:00.000-07:00

SEMICON China, FPD China, SOLARCON China 2011

2011-03-24T16:01:00.001-07:00

Semiconductor Industry Earthquake Status

2011-03-22T17:52:00.000-07:00

Like all organizations in the semiconductor industry, SEMI has been impacted by the devastating earthquake in Japan. While our people are safe, they are having difficulties with the transportation infrastructure in Japan and coping with many personal hardships and, in some cases, loss of friends and/or family. The Sendai region was home to many important SEMI member company facilities. Our Japan Board members were also unable to attend our recent Board of Directors meeting in China, focusing on the many personal and business challenges this extreme event has produced. Many of our Japan staff are working with members "on the ground" to assist with disaster recovery, including exploring logistics and shipping alternatives and consulting.

An important consideration for SEMI has been how to serve our members with communications and information. We have explored a number of options and have chosen to focus on aggregating public announcements on earthquake impact status from SEMI members in Japan and in other important SEMI members. You can see a sample of this effort currently posted on the SEMI home page here.

There has been significant, and in some cases hasty, speculation on the impacts to NAND memory, silicon wafer shipments, packaging material resins, capital equipment, and other areas. The news media is doing as good a job as they can in identifying and evaluating these issues for their readers. Before any accurate industry assessment can be made, however, aftershocks need to decline in frequency and severity and the electrical power service needs to be restored. SEMI does not feel it productive to add to the speculation by facilitating, contributing or accelerating what may be poor information. Our friends and colleagues in Japan need to do their work first before a full assessment of the demand and supply issues can be fully examined.

I hope you agree with our approach to aggregate authorized information directly from SEMI members, rather than contribute to an incomplete and premature discussion of the earthquake's impact. There will be time for that soon enough.

If you have any advice or comments on how you or SEMI can contribute to the earthquake relief and industry response effort, please drop me note.

Corning's Beautiful Vision

2011-03-22T17:49:00.000-07:00

Great video on the possibilities in flexible electronics, 3D displays, and other emerging and current technologies.

Transistors in Transition

2011-01-31T15:55:00.000-08:00

As the semiconductor industry prepares for the 15/14 nm node and beyond, the most revolutionary change in chip architecture is likely to take place. I have been fortunate to hear of many of these possible developments at recent SEMI events, such as SEMICON Korea (Dr. Yoshio Nishi, Stanford), ISS (Paulo Gargini, Intel) and SMC (Nobu Koshiba, President, JSR).

Two main alternatives now being considered by the leading-edge logic makers: vertical devices (FinFETs), and fully depleted planar transistors based on extremely thin SOI (FD-ETSOI) substrates. Further out, researchers are moving from silicon channels to germanium and III-V materials in heterogeneous ICs. Vertical transistors offer the potential for high performance, while presenting several manufacturing challenges. The transistors based on thin SOI substrates also have advantages and challenges. Can wafers with these thin layers be provided with consistent material thicknesses, at acceptable wafer costs?

Industry researchers are also discussing alternatives to today’s charge-based memories, including resistive RAMs (RRAMs), spin-torque transfer RAMs (STT-RAMs), and phase-change memories (PC-RAMs). Memory companies are confident they can advance NAND flash chips by putting memory cells on top of each other. These cell array transistor (CAT) memories could link 16-32 memory cells, taking NAND well beyond the 20 nm generation.

Nobu Koshiba, President, JSR Corporation, said during the keynote of the Strategic Materials Conference, “We are leaving the Materials Era and entering the Architecture Era…the evolution of CMOS devices will be driven by new architectures.”

Characterizing the new era will be diversified pathways to extend scaling, including 3D IC, extended CMOS through FinFET and other innovative structures, beyond-CMOS technologies such as nanotubes, graphene and other non-silicon possibilities, and new application or “fusion devices.” The pathway for logic may include FinFET structures with gate last integration. Challenges to overcome include metal fill through small structure, strained gate, and high temperature resistant dielectric fills that will require new deposition and material approaches.

In addition to 3D, DRAM and NAND pathways may include MRAM and ReRAM that will require new conduction path formation, resistivity change approaches, and the discovery of resistive film materials which enable high performance memory with simple planer stacking and/or cross point structure. New device structures may require magnetic materials with high thermal stability, low temperature (< 250°C) cure dielectrics, and low temperature (< 250°C) deposition of metal through PVD, electro plating, and/or electroless.

At ISS, Paulo Gargini discussed recent research that demonstrated how Ge can achieve high mobility and high drive current, and how Ge -well field effect transistor would be viable p channel option for low power III V CMOS architecture. Carbon nanotubes, graphene ribbons and other graphene approaches are also getting attention at Intel.

I am not a PhD so I can’t fully appreciate all the issues involved in vertical transistors, III V materials or new memory technologies. I think I do appreciate, however, the implications for the supply chain. Traditional scaling has impacted equipment, subsystems and components on a narrow range of parameters. While it drove an equipment and systems upgrade business coincident with Moore’s Law, many of the changes centered around lithography and structure dimensions. These new architecture changes will affect materials, temperatures and process characteristics in every way possible. The R&D challenges are going to be enormous and the collaboration requirements in the industry are going to skyrocket. Big research breakthroughs are going to trickle down to new equipment specifications, new instrumentation, even new vacuum pumps, and more. We will probably see some new suppliers enter the business, and some old ones lose market share.

It sure makes for an exciting industry--both now as we try to forecast which way the industry will go, and in the future as companies develop solutions they think will be meet new customer requirements.

SEMICON Japan 2010

2010-12-09T16:41:00.000-08:00

LED Market Entering a Lull?

2010-10-14T08:47:00.000-07:00

So, is the red hot LED market about to cool off?

According to DigiTimes, LED chipmakers including Epistar, Formosa Epitaxy and Tekcore expect revenues in September to continue to drop amid dropping demand for TV backlighting, and gross margins for the third quarter of 2010 are expected to drop 4-5 percentage points due to increases in component prices, as well as shortages of such components as sapphire substrates and special gases.

In August, IMS Research estimated that over 300 MOCVD systems were installed in Q2'10 to serve the rapidly growing high brightness (HB) LED market. This segment is benefitting from rapid gains in penetration into the notebook PC, LCD monitor, LCD TV and general lighting markets as well as a healthy subsidy in China. IMS also estimated that LED capacity will need to rise by 352% from 2009 to 2014 to keep up with demand, driving tool shipments throughout the HB LED supply chain.

According to IMS Research SVP Ross Young, "MOCVD is the single hottest category in the semiconductor manufacturing space with shipments expected to rise by nearly 500% in 2010 and to keep growing through 2013. With TVs, monitors and general lighting still early in the adoption cycle and the Chinese government encouraging a healthy LED infrastructure with a generous $1.5M subsidy per tool, this segment should remain hot.

Deutsche Bank and JP Morgan also see the MOCVD market growing through 2011. Canaccord Genuity predicts tool orders to peak in 1H’11.

Part of the reason for the near-term optimism in LED and MOCVD growth was the projected healthy demand from LED TVs. According to DisplaySearch, LCD TV panel makers are targeting aggressive growth for LED panel shipments, with plans to reach 40 percent LED penetration in Q4’10, and to exceed 50 percent in Q2’11. They estimated that Q2’10 vendors have shipped 9.5 million, or 18.5 percent, of the LCD TV panels with LED backlights, which was 110 percent growth quarter-to-quarter.

So what’s with the disappointing LED sales from Taiwan? Accorording to DigiTimes, Epistar indicated that decling September revenues were due to weakening demand for TV backlighting and general lighting, but the company expects revenues to start picking up in October as capacity adjustments for different applications have been completed and production is getting back on track.
Tekcore also believes that its September revenues will drop, while market observers expect the company's revenues to drop by 10-20% sequentially to about NT$200-220 million in September and revenues for the third quarter to increase by 10-12% sequentially to NT$700 million. Furthermore, component supply in the fourth quarter is expected to improve, helping to boost shipments.

Formosa Epitaxy expects its September revenues to drop 10% mainly due to low TV backlighting demand and tight component supply. Although TV backlighting demand may increase due to vendors' launch of new models in the fourth quarter, the small- to medium-size segment will enter the low season.

As the LED market scales to meet higher demand, predicting the point where overcapacity will cause a decline in capital spending and MOCVD tool orders will become an important planning issue for the industry. With over 80 manufacturers of epi wafers, serving increasingly diverse and dynamic markets, capital spending and pricing trends could be volatile for the next few years.

PV Manufacturing in the US and Europe

2010-09-30T15:44:00.001-07:00

To fully leverage the economic and environmental benefits of the emerging CleanTech industry, the US and Europe need an aggressive and comprehensive approach to sustain and grow solar photovoltaic manufacturing. Wall Street may prefer the economic efficiency of manufacturing PV products in China with coal-powered electricity for deployment in Germany and California, but a more functional global market for PV would keep manufacturing next to end markets. It’s not the same as ICs; there are good reasons to take aggressive steps to incent manufacturing investments in Europe and the US.

With over 75% of the world’s installed solar PV energy capacity, Europe is the global center of the high-growth solar industry projected to contribute as much 14% of the world’s energy supply by 2030. The US is closing quickly and expected to surpass Germany in PV demand in the next 3 years. But China is now making over 50% of the solar PV cells and modules, creating a dangerous imbalance between supply and demand. It’s dangerous, in my opinion, because it’s not politically sustainable and will contrain technical advancement.

The SEMU PV Group has been advocating for meaningful and effective public policies that support the growth of the global solar industry since its inception. In Asia, we have been focused on advocating demand-side policies to encourage the development of local markets for solar products, primarily in China, Taiwan and India. In 2008, we produced a White Paper entitled, “China’s Solar Future,” a report containing specific recommendations for the accelerated adoption of PV generated electric power. The report stated, “It is important that China occupy a leading position in the demand for solar power, as well as contribute to global supply.” The PV Group made similar appeals in Taiwan and India, also supported by well-documented White Papers. In the US and Europe, however, supply side policies are needed to increase local production of PV products.

Unlike fabless semiconductor development or outsourced discrete electronics manufacturing, PV products are dependent on the continuous improvement of manufacturing process technology and require the close coupling of R&D and manufacturing. New technologies, material sets and recipes identified in the lab, must be developed and validated on high-volume production environments. Long term market success is increasingly defined by the ability to go “from lab to fab.” These requirements compel a strong link between R&D with manufacturing. Loss of the manufacturing base due to poor financial incentives, lack of financing and other policies that discourage plant locations and upgrades in Europe will create powerful incentives for R&D and other key contributors to the value chain to migrate to Asia. That may be good for Asia, but bad for the Europe and US, and bad for fossil fuel reduction.

For Europe and United States, policymakers need to develop programs that seek a balance PV demand with PV supply--and that means policies that retain and grow the local manufacturing base. Building solar cells and modules in one region and shipping them around the world for deployment in another is not an optimal greenhouse gas strategy. Unlike computer chips, there is a meaningful cost advantage to manufacturing solar PV close to where it will be deployed. It makes good economic and environmental sense to leverage this cost advantage through sound public policies that support local manufacturing.

Trade restrictions and reprisals against Asian manufacturers are not the answer and will ultimately harm all manufacturers and global environmental goals. Libertarian rhetoric and calls for “lower taxes and less regulation” aren’t realistic or substantive. The solution lies in recognizing the unique needs and important economic benefits of manufacturing and crafting sound policies that retain and grow manufacturing in the US and Europe.

Photo caption: SolarWorld 500MW Cell and Module fab in Hillsboro, OR

This Rebound is Different

2010-08-30T10:09:00.000-07:00

As the semiconductor capital equipment and materials market enjoys nearly unprecedented year-over-year growth, many industry analysts see signs of caution on the horizon. The most recent SEMI Book-to-Bill ratio reached 1.23 (meaning that $123 worth of orders was received for every $100 of product billed for the month) and the three-month average of worldwide bookings jumped 220.4 percent above 2009, but a packed audience of industry leaders heard mixed signals related to 2011-2012 growth at the recent Silicon Valley Lunch Forum.

Bob Johnson of Gartner sees capital spending up over 90% in 2010 and continuing to increase in 2011. He sees, “strength through 2012, then retrenchment.” After reaching $35.4 billion in 2010, Gartner’s current cap spending forecast reaches $37.7 billion in 2011 (6.6% growth) and $40.8 billion in 2012 (8.2% growth). Gartner’s current capex estimate for the 2013 “retrenchment” is $34.9 billion, a decline of 14.6% from 2012 estimates.

Gartner’s current data indicates market strength: IC unit volumes and equipment are surging, driven by strong end user markets, especially PCs and mobile phones. Johnson does acknowledge, however, uncertainty caused by recent company announcements. While global economic recovery is strong, US economic growth is apparently softening and uncertain. He also sees volume declines at the packaging, assembly and test houses, and some indication of inventory increases in the supply chain.

Bill McClean of IC Insights is quick to point out that the current weak US economic recovery is not representative of the overall global market environment. Modest GDP growth in the US, Europe and Japan projected for 2010 should not obscure the robust 7.3% growth elsewhere in the world. China’s GDP is projected to grow 10.6% and India 8.5%, and much of this rising prosperity is driving strong global IC demand.

But McClean does acknowledge, “This rebound is different.” Unlike any other year since 1983, after two down years in capital spending, this year’s capital spending surge will be in the first year of recovery, not the second. Capital spending will increase by a reasonably robust 9% in 2011, but far less than the 93% he projects for 2010. Every year in the modern history of semiconductors the largest increase in capital spending has occurred in year two of the recovery. Does this cap spending trend signal a more modest cyclical decline in 2013, or is the industry entering an era with new spending patterns? Typically capital spending will decline after a 50% increase in capex, but this year’s IC wafer capacity will only increase an estimated 1.6% after an unprecedented 7.6% decline last year (capacity has only declined one year in history). And, 300mm IC fab utilization will reach 98.4%, suggesting the market can easily accommodate the recent increase in capital spending.

Both analysts agree that future cycles will be primarily driven by memory manufacturers. Johnson estimates 41% of 2010 capex will come from memory fabs, versus 21% from foundries/OSATs and 17% from other IDMs. McClean ranks six of the top ten capital spenders in the memory segment, representing 55% of the total spending from these top companies. Memory firms have been most susceptible to the market forces that accelerate super-cyclical swings in capital spending. In addition to the traditional cycles influenced heavily by rising then falling ASPs and fab utilization rates, Johnson suggests that capital spending by memory makers will also not have sufficient net cash flow to fund future capex needs.

The cyclicality—or super-cyclicality—of spending patterns is one of the many challenging and unique attributes of the semiconductor industry. In one of the most demanding R&D industries in the world, the IC supply chain has had to endure radical swings in capital spending while keeping pace with relentless Moore’s Law and stockholder expectations. The rapid rebound from last year’s alarming drop in equipment spending (down to less than $17 billion from a 2007 high of over $44 billion) is a testament to the ingenuity, flexibility and resourcefulness of SEMI members. Whether this PhD-intensive industry can sustain another swift drop in spending remains to be seen, but for the next few quarters, a positive market environment looks certain. Beyond that, well, only time will tell.

Manufacturing and R&D Go Hand in Hand

2010-08-12T15:34:00.000-07:00

If you’re making an electronic product with a motherboard than needs stuffing and a final assembly, it doesn’t matter much where you make the product from the company’s perspective. Manufacturing certainly matters when you are talking about national interest and public policy. Here, governments have a strong interest in where large employers put factories, but private interests are just concerned with economic optimization.

For companies, you’re looking for the lowest total cost at guaranteed quality levels and there are plenty of qualified companies around the world capable of performing the function. The long term competitive advantage for most companies is not in manufacturing, but in innovation, design, marketing and other points on the value chain. Manufacturing is a function that can be outsourced, like payroll accounting, communications, insurance and the like.

For most products, there is very little interaction between the factory and product development process so the value of manufacturing location is slight. The calculation is concerned exclusively with the Bill of Materials, assembly costs, shipping costs, quality metrics, and other pure economic considerations.

ICs and solar PV are different. It does matter. R&D and manufacturing are intimately linked and losing one will probably accelerate the loss of the other.

Mike Splinter made this point at the Aspen Ideas Festival when he explained that in our business, “manufacturing isn't just where ideas are put into practice, but a key part of the innovation ecosystem.”

In ICs, how fast you get to the next node, how fast you debug and tape out, how fast you ramp, and how fast to yield will determine your success. Each of these steps requires manufacturing expertise of the highest order. Sure, a lot of chips are made in foundries, but manufacturing remains an enormous chunk of the value chain. There’s not too many fabless companies doing better than TSMC or ASE.

And its not just scaling that is sustaining the value of manufacturing in semiconductors. Since 1975 scaling has delivered around 8000 times improvement in the cost of ICs as transistor feature sizes were reduced from 4 micron to 45 nanometers. Manufacturing efficiencies accounted for another 500 X in cost reduction over this period. Some experts have claimed that technology shrink delivers 30-50% of the yearly cost reduction in chips, productivity improvement brings 10-30%, yield 10-15% yearly (wafer size transition brings another 30-50% cost reduction every 10-15 years.

In this environment, manufacturing capability in inextricably linked to profitability and competitive advantage. You don’t do productivity, yield and cycle time well, you don’t survive. And, if you don’t have R&D deeply engaged in manufacturing, you won’t be competitive.

Same is true for solar. Thin and crystalline solar technologies are similar process technologies to chips. Manufacturing optimization is critical to sustaining long term competitive value. Just a glance at NREL’s tracking of best efficiencies in solar sees a long, steady continuous improvement process. While the NREL data points are from the lab, the process is replicated in the fab; the ability to commercialize incremental efficiency improvements through manufacturing is how, in large part, solar manufacturers’ compete. Having a fab onsite, where R&D engineers can prototype new recipes, troubleshoot new processes, and tweak yield and productivity improvements is an advantage and provides real value.
Large, multi-billion dollar fabs also bring a clustering of best-in-class suppliers to the neighborhood. Specialty gas producers, machine shops, labs, scientific specialties, process technology firms, etcetera, ecetera always spring up around fabs. They innovate too.

So, when Apple builds the iPad at a Foxconn plant in Shenzhen, or HP netbooks in Taipei, is the US at risk of further losing their share of the mobile computing market? Will those companies shift a large portion of their R&D and marketing teams to Asia? Probably not.

But when fabs go up in Asia, PV and IC R&D is probably not too far behind.

Mike Splinter is absolutely right when he says the micro and nano manufacturing is an essential part of the “innovation ecosystem.” The question is whether any of US’s national leaders that flock to the prestigious Aspen Festival really understood him. I know leaders in China, Korea, Taiwan and Japan do.

ASML at SEMICON West

2010-08-11T17:36:00.001-07:00

My SEMICON Week

2010-08-02T16:52:00.001-07:00

SEMICON West--Intersolar from SEMI on Vimeo.

It’s a Growth Industry…Again

2010-07-29T15:16:00.000-07:00

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.

Using SEMICON West to Achieve Member Objectives

2010-07-23T14:41:00.000-07:00

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?

Printed Electronics at SEMICON West

2010-07-20T18:43:00.000-07:00

Best of West Award

2010-07-02T09:58:00.000-07:00

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.

What Happened to the Future?

2010-06-22T18:42:00.000-07:00

For many people, especially those in United States, the future is decidedly less appealing than it once was.

The idea of the future as more bountiful, more peaceful, and more enjoyable than the past has been fundamental to most people’s outlook and perspective. It drove our careers, it gave us confidence to invest in families, in homes and education; and made many of us less cranky and more enjoyable to be around. We would live better than our parents, who lived better than theirs. Progress was inevitable.

Technology was a big part of this expectation. In the US, the mission to the moon gave birth to an entire generation of engineers and scientists who grew up believing nearly anything was possible. We directly and personally experienced technology’s progress in communications, entertainment and industry. We remember big, clunky black and white TVs and expect louder, larger, flatter, thinner, brighter, 3D TV in the coming years. We remember vinyl records and how impossible it was to create a playlist or carry around a thousand songs. We remember Pong and grew up with computers that got better every year. We even saw them turn into phones. We saw the Internet go high def and wireless, and technology become fashion accessories. Not only would our kids live better, easier lives, they would be smarter and cooler too.

Of course, the economic backdrop to all this progress was not entirely good. Japan lost a decade, middle class incomes in the US would stagnate for nearly a generation, and Western Europe GDPs would slow to a trickle. But the advance of technology would at least make it all more enjoyable: better movies, better cars, more friends in better touch. Economic statistics didn’t seem to correlate with obvious, tangible improvements to our quality of life that was as conspicuous as flat screen TVs, smart phones and 3D movies.

Yet today with an oil spill out of control in the Gulf of Mexico and global warming apparently beyond the scope of civilization’s grasp, the future—and the future of technology-- is not looking especially bright. Progress itself seems threatening. While chips sales are booming, it’s Asia that’s prospering. Silicon Valley’s unemployment rate is among the highest in the nation. A recent Department of Labor report estimates that the semiconductor industry will lose one-third of its jobs in the coming decade, the second worst employment sector in the country. We don’t see a next-big-thing on the horizon and jobs in technology are moving overseas faster than you can say CLEANTECH.

Of course, this isn’t really an accurate description of the state of the future. It’s a US perspective and technology doesn’t really care about borders. Silicon Valley remains the epicenter of venture capital funding and no one seems remotely challenging Intel, Apple and Cisco—not to mention Google, Facebook and Twitter. Chip sales are booming not because of Y2K, or Windows 7, or the adoption of smart phones by US road warriors. The technology world today rides on the rising tide of the global consumer, a consumer that’s increasingly from India, China, Russia and a hundred places in between. It’s not about the US anymore.

And, he future’s not about less electronics, its about more. The coming energy crunch is not going to put us in caves, its going to be solved by PV, solid state lighting, thin film batteries, and high tech energy harvesting and other microelectronic innovations. Chips are going to power smart grids, electric cars and other essential components of a cleaner, safer world.

Now, who going to specifically benefit from these products and innovations is another story. It won’t be a factor of where you live. It’s a small world and a flat world--and if you’re not smart enough or clever enough, or industrious enough--it’s going to be a cruel world.

The ebb and flow of the technology industry today is not being driven by Fortune 500 IT spending or the latest high priced gadget for that tiny group of mobile executives, its about hundreds of millions of people leaving poverty and joining the urban workforce. It’s about the ubiquitous place that technology has in the lives of average people in Cairo, Mumbai, Chengdu and Johannesburg.

There’s plenty of things disfunctional in the US political economy today, but it doesn’t have anything to do with technology. There’s no use blaming other companies or other countries for not playing fair or having low wages. The US chooses not to have a robust pro-technology policy. The federal government chooses not compete for fabs or with other countries in various technology sectors. It could, but does not. And I’m not sure it really matters to the vast majority of the human population whose lives are enhanced by microelectronics, or the infinitesimally small percentage of people whose brains and brilliance enable the industry to grow and prosper.

If you have a global perspective, if you have a human perspective, “the future” may never look as promising as today. And chips, solar, LEDs, and other advanced technologies have played and will play an enormously central role in that human progress. And that’s a good thing, no matter where you live.

The Center of Gravity os Changing--PricewaterhouseCoopers

2010-06-14T11:47:00.000-07:00

“The center of gravity is changing. The only question is how fast…”

This was the theme of the presentation given to the SEMI Sales and Marketing Council (SSMC) at last Tuesday’s lunch meeting by Raman Chitkara, Sr. Partner at PricewaterhouseCoopers, the world’s largest professional services firm.

As part of our regular monthly networking lunch, SSMC often has outside speakers join the group to share their perspective on important industry issues. This month we were extremely fortunate to welcome Raman Chitkara who has had a ring side seat in the key developments in Silicon Valley, and an insider’s knowledge of many of the leading companies in the semiconductor industry. He’s also leading expert on CleanTech, having been a principal leader in PwC’s informative “CleanTech Comes of Age" report. Raman is also one PwC's experts on China as leader of the "China's Impact on the Global Semiconductor Industry" report.

The center of gravity that Raman refers to is geographic. The move of high tech industries to Asia has been relentless. “As US companies extend globally, they spawn indigenous technology companies,” said Raman. Of the 29 firms that went IPO in the Q1 of this year, 1 was on Germany’s exchange, 3 on NASDAQ, and 24 were in China. The China firms raised over $2.5 billion.

The growing importance of emerging markets is part of this shift in gravity, not just in production, but consumption as well. The growing middle class in BRIC countries is driving world chip demand. Even during the recent semiconductor downturn, electronic systems manufacturers in China continued to increase their consumption of semiconductors at a rate three to five times the worldwide rate. As a result, China is remains the largest consumer of semiconductors for the fourth year in a row. In the past, much of this consumption was from US, Japanese and other global OEMs, now it is increasingly dominated by China electronic manufacturing firms with local sourcing authority. Raman sees China chip manufacturing sector to continue to grow, especially if the success of other international fab ventures continues.

The other major shift in the IC industry discussed by Raman was consumerization—not just in total chip consumption—but the fact that new technologies now appear first in consumer markets, not in business IT. Among the impacts this brings is the decline in vertical integration. “How can you sustain competitive advantage when everyone can get the same chips?” Apple is focusing on software differentiation with emphasis on only a few key components.

Raman sees a convergence of software and hardware services—complete solutions that allow companies to achieve dominant market shares. But he admits, “the rules are still being written…”

Another important impact on SEMI members will be he transition from US GAAP to International Financial Reporting Standards (IFRS). China will make the change to IFRS in 2011, well before the US in 2013. Among this IFRS impact will be on leasing and capital equipment purchasing.

Intel International Science and Engineering Fair

2010-05-21T08:47:00.000-07:00

The Intel International Science and Engineering Fair is the world's largest pre-college science fair competition. Each year, more than 6 million young scientists from around the world vie to attend and 1,500 are selected as finalists to share ideas, showcase cutting edge ideas and compete for over USD 4 million in awards and scholarships. To judge the projects, more than 1,000 science, engineering, and industry professionals volunteer at the Intel ISEF.

On May 14, 2010, Amy Cindy Chyao won first prize at the Intel International Science and Engineering Fair when she was awarded the Gordon E. Moore Award and a $75,000 college scholarship. More than 500 Intel ISEF competitors received scholarships and prizes for their innovative research.

Check out their website and prepared to be inspired.

Something for Everyone at SEMICON West

2010-05-20T16:25:00.000-07:00

Six years ago, SEMICON West was an exposition with a few keynote speeches. There were some SEMI International Standards meetings, a president’s reception and many non-affiliated, off-site meetings by vendors, magazines and other organizations, but few technical or business programs designed to attract specific constituencies.

Today, there’s about 200 hours of business and technical programs formally held in conjunction with SEMICON West. These include free, on-floor TechXPOT sessions, paid technical conferences, and several programs by partnership organizations that SEMI actively supports and promotes. Some of these new programs address exhibitor demands for more on-floor show traffic, or more technical buyer attendees, but the overarching motivation is to serve specific industry segments with meaningful and practical environments in which to collaborate. Some of these collaborations are focused on selling, some are for learning, and some are to facilitate agreements between industry players.

As show organizers, our goal is first to identify specific constituencies that share common information needs, interests or issues. This isn’t as simple or straightforward as it sounds. Companies, titles, subjects and issues overlap. Perspectives on subjects like 22nm and 3DIC include materials and equipment suppliers, buyers and process developers, engineering specifiers and purchasing/supply chain managers. The deeper and more in-depth you get on a topic the narrower the audience; the broader the coverage of a topic, the less technical. At West, our goal is not to compete with narrow technical conferences, but bring key buyer/seller/specifier communities together in a practical way.

How we do this can be seen is in the programs and how they align to important market segments. Here’s the plan so far:

Advanced wafer processing
http://www.semiconwest.org/Segments/Semiconductor/index.htm

Packaging
http://www.semiconwest.org/Segments/Packaging/index.htm

Test
http://www.semiconwest.org/Segments/Test/index.htm

3DIC
http://www.semiconwest.org/Segments/3DIC/index.htm

MEMS
http://www.semiconwest.org/Segments/MEMS/index.htm

LED
http://www.semiconwest.org/Segments/LEDs/index.htm

Printed/Flexible Electronics
http://www.semiconwest.org/Segments/PFE/index.htm

Have we missed anything? What would you recommend? I'd love to hear your ideas.

SEMI Sales and Marketing Council

2010-05-20T16:13:00.001-07:00

SEMI Sales and Marketing Council (SSMC) from SEMI on Vimeo.

Printed Electronics in Europe

2010-05-13T14:47:00.000-07:00

I had an interesting speaking opportunity this week at the Printed Electronics Summit in San Jose where I gave an overview of the European landscape for organic and large area printed electronics (with the volcano constricting travel, I got the European slot).

What I knew, but what I was surprised to see so pronounced, was the scale of European excitement and support for printed electronics. The comparison with the US is not complimentary.

Today, Europe enjoys the world’s largest and most well developed collection of companies, research institutions and government programs engaged in printed and organic electronics. The ecosystem is well organized, well connected and well positioned to prosper from current trends or any breakthrough applications that may develop.

First, the R&D infrastructure in Europe is active, comparitively well funded and well established. Three Fraunhofer institutes, The UK’s The Knowledge Network, Belgium’s IMEC, France’s CEA/Liten to name a few all have active research programs in organic and printed. VTT, the Research Centre of Finland is very active in this area. It has a division called Printocent to create business in Printed Intelligence applications with a program budget is in excess of 10MEUR.

InnovationLab is an application-oriented research and transfer platform of business and science in the Rhine-Neckar Metropolitan region of Germany. It was jointly founded by the six globally active companies BASF, Heidelberger (the largest printing press manufacturer), Merck (leader in organic chemicals), Roche Diagnostics, SAP, and the universities of Heidelberg and Mannheim.

There many other R&D institutions and players in printed and large area organic electronics—in Portugal, Poland, Greece, and many other locations. I’m sure there is university research in the US, but not as this scale and not with this level of organization.

Europe’s printed electronics community is also extremely well organized. The Organic Electronics Association (OE-A) is a working group within the German Engineering Federation (VDMA). Members range from R&D institutes, component and material suppliers to producers and end-users. It is currently comprised of about a 120 companies from Europe—with a few from North America, Asia and Australia. They have produced roadmaps and provide industry advocacy and promotion.

The Plastic Electronics Foundation, based in Brussels, is a not-for-profit organization whose main objective is to promote the technology of printable, organic based flexible electronics into marketable applications and products worldwide. They have been key contributors to the development of a Strategic Research Agenda for Europe as well as a key player in EU funding projects.

Concerning current government support and programs, FP7 is the short name for the Seventh Framework Programme for Research and Technological Development. This is the EU's main instrument for funding research in Europe and it will run to 2013. In printed electronics, research funding is concentrated in organic electronics, under the name, The Quadriga Project, though it has about 20 other projects not affiliated with Quadriga. The 4 projects that form Quadriga are OPERA, Polynet, Polymap and Prodi. The main and common objectives of all four collaborative projects are to foster the position of Europe as a leader in research, and to strengthen the position of Europe as a main hub in this area.

And finally, in addition to R&D infrastructure and government support, Europe also understands the power of regional clusters. Regional areas in Oulu, Finland; Basil, Switzerland; Dresden, Germany, Cambridge, UK; and the German states of Hesse and Baden-Württemberg has funded organizations and activities that actively seek to nurture the development of printed and large area electronics within a close municipal region.

Whether this widespread European network of activities can compensate for the presence of large integrated companies in Asia (Panasonic, LG, etc.)and US (GE) remains to be seen. Also, Europe also does not enjoy the advantages of an active venture capital market like the United States.

But it does look like a rational, purposeful and coordinated policy to position Europe as a leader in an emerging technology industry. In the US, unfortunately there is no rational and coordinated policy to support existing and future high technology industries.

In Loving Tribute To Jean LeMoin

2010-05-07T14:46:00.000-07:00

I usually don't repost things I recieve, but this was an important notice from the MCA Team that deserves all the honor and respect I can give.

Jean LeMoin
1956 - 2010

Dear Colleagues and Friends,

It is with great regret that we announce the loss of MCA's founder and president Jean LeMoin, who passed away suddenly on May 3, 2010. A true trailblazer in the communications field, Jean founded MCA in 1983 as a one-woman shop and grew it into a highly respected boutique agency specializing in the global semiconductor, flat-panel display and microelectronics industries.

Jean launched MCA with an initial focus on semiconductor equipment and materials - one of the first agencies to do so - drawing on her marketing communications experience in the industry to build her client base. Over nearly three decades, Jean and MCA have influenced the industry outlook on many important subjects, launching game-changing technologies and creating new opportunities for outreach and dialogue. In 1994, VLSI Research Inc named her to its Chip Industry Hall of Fame for "pioneering the concept that a PR agency is a mechanism for managing a company's image across a broad front… creating an image that is cohesive with the media, customers, and the financial community." This vision remains a hallmark of MCA's approach.

A believer in giving back to the community, Jean sat on the boards of several industry associations, as well as such non-profits as Ronald McDonald House, the Support Network for Battered Women and Rubicon - organizations to which she also donated agency time in order to help reach those in need.

Those of us who knew and worked with Jean will remember many things about her - her keen mind and technology savvy, her love of the arts and good books, her affinity for Oprah and chocolate, her humorous stories about her exploits with best friend and life partner Kevin McCoy, how she always drank Diet Coke from a wine glass and never put croutons on her salad… Jean was a unique and fascinating personality, and the mark she has left on the communications profession, and our lives, is indelible.

To honor her memory, the Jean LeMoin Women in PR Scholarship has been created to enable a deserving student seeking a career in public relations or communications to pursue her dream. As a respected mentor to young PR professionals throughout her career, Jean's wish was for this effort to continue on. If you are interested in making a donation, please send your contribution, payable to The Jean LeMoin Women in PR Scholarship Fund, to MCA, 2119 Landings Drive, Mountain View, CA 94043.

On The Disappearing High Tech Trade Press

2010-04-29T18:38:00.000-07:00

The demise of Semiconductor International is a major loss for our industry. Our ability to interact and communicate within the supply chain, network and align around key issues and challenges, and just enjoy this fascinating and rewarding business has been seriously damaged. My best wishes go out to all who lost their jobs at SI and I sincerely wish them the best of luck in their future careers.

From a personal point of view, the Reed announcement also hurt since I have had experience placing ads and editorial in several of the discontinued Reed books over my 25 years experience in high tech advertising. I began in the control components and automation industry and placed many ads in Business Design and Construction, Modern Materials Handling and several other of the Reed books to close.

The Reed closures are part of the long-running contraction of business journalism, especially high tech trade journals. There are many reasons for the pervasive decline of the high tech trade press. It’s been my opinion that the one the top reasons—perhaps the top reason—is the incompetence of marketers and their advertising and PR agencies. Especially in high tech, years of ineffectual and amateur work by marketing professionals—and smooth-talking graphic design houses that bill themselves as agencies--has ruined the tech trade media for the handful of professionals who actually know what they are doing.

There was a time when engineers read and valued trade journal advertising. They read ads, just like editorial, looking for solutions and information that would help them in their jobs. Thousands of trade magazines prospered in hundreds of industries because they met the needs of buyers and specifiers. Trade journal advertising could easily be justified by return on investment, proven through cost-per-leads, surveys, and new customer acquisition. Bingo card leads resulted in sales, and products that claimed to be “faster, better, cheaper,” in trade journal ads could steal market share.

That was, of course, before the Internet emerged as a business medium. The bingo card lead system evaporated. The monopoly of trade journals, trade shows and direct mail over mass customer communications was broken. But awful marketing and misuse of the print ads was a powerful factor in the demise of trade journals, especially high tech.

The Internet came about during the go-go nineties when tech was king, business was good, the stock market rising, and young marketers got in control of some serious budgets. With hype fueling the IPO market, so-called image advertising started dominating the tech-rich trade journals. Ad agencies started pushing consumer advertising concepts to inexperienced and ego-driven marketers because they didn’t need to understand the complexity of engineering buying decisions. Complicated technical arguments became reduced to Unique Selling Propositions, communicated through metaphor, similes and graphic design. Word counts were reduced and charts, graphs, and specs were banned in favor of cleverness and attitude. When business was good, agencies refused to do engineering-ads because they didn’t win awards, attract other clients, and appeal to non-technical business people. Marketers who didn’t really understand their products joined forces with savvy, hard selling ad agencies to dumb-down tech advertising, insulting technical buyers who needed substantive, meaningful information from their trade journals to justify their time. Focus groups became obsolete because technical buyers refused to endorse clever creative concepts that were soft on technical why-to-buys and fat on hipster attitude.

During the nineties, the tech trade journal world exploded. Books like Fast Company and Wired became fat with ads from networking gear, chip companies, embedded stuff, and middleware, and other classic high-high tech. Hot shot Internet start-ups and trendy tech brands like Apple set the standard for marketers and agencies, eliminating the complex "techee" engineering ad from the high tech press. No marketer or agency would ever get caught with a specification chart or performance graph in their ads—it was about brand or positioning or Unique Selling Proposition told through metaphor or wordplay. The recession-proof New Economy was running on all cylinders and everyone was riding the wave of historic stock market highs. The best and brightest marketers gravitated to companies with an IPO track or with large advertising budgets to make a name for themselves touting Proctor and Gamble-like brand management concepts, shouted about with big dumb clever ads that captured a position, a mood, or attitude (but not a rational, well reasoned technical argument supported with facts for buying a product). Times were good for agencies and marketers in high tech--you could make good money without knowing anything about technology.

Of course, the dot com bubble burst, scorching the tech advertising landscape like a nuclear winter. Without any rational justification for soft image advertising—without any metrics or case studies of success--the floor dropped out of the print advertising medium. There were no more sophisticated faster-better-cheaper advertising left. Techee ads for engineers by engineers were drummed out of the business. Trade journal readers stopped looking at ads as a source of useful information. Real buyers stopped renewing their subscriptions. An entire generation of marketers and agencies never learned how to use print advertising wisely, spending their time lamenting the emergence of the Internet and hustling their inappropriate, outdated dot-com or consumer creative concepts to the few remaining big egos left with an ad budget. Gen x graphic artists with community college degrees are still calling the creative shots at supposed high tech agencies. The vast majority of people responsible for marketing and selling of products to engineers have moved on from trade journals. See ya, it was good knowing you, fun while it lasted.

From my perspective (without any statistics, just observations)--as part of the fall out from the dot com damaged, tech marketing collapse--high tech B2B marketing seems to have evolved into two career paths: product marketers who manage BOMs and perform project scheduling and management functions; and marketing communications who are younger, lower level positions responsible for web, PR and collateral work. Both paths find it real hard to jump to the VP level and have a big impact on their organizations. VPs of sales and marketing invariably rise up from the sales ranks, further diminishing the role of classic marketing on the high tech industry. The result is a withering of marketing’s influence in high tech industries, further diminishing the role of the high tech press.

The more profound impact, however, on the decline in marketing in high tech has been a rise in product commoditization, killing margins, killing profits and fueling merger and acquisition activity. Commodities emerge from the inability to meaningfully differentiate a product and that’s what marketing is really all about, not big, soft, dumb brand advertising.

A Level Playing Field in SSL?

2010-04-26T10:58:00.000-07:00

I had the great opportunity to speak on behalf of SEMI members at last week’s Department of energy (DOE) Solid State Lighting Manufacturing Workshop. The workshop provided information on the first round of DOE-funded manufacturing projects, engaged attendees in technology roadmap priority topics, and provided an update on federal funding opportunities. Last year, the DOE awarded SSL funding to SEMI members Veeco, Applied Materials, KLA-Tencor, and Ultratech for LED manufacturing research funding.

I spoke on the workshop’s final panel to address U.S. manufacturing equipment and infrastructure needs, a public policy discussion. Last year’s $23 million in manufacturing funding was enabled by the stimulus bill; this year the administration has requested a total funding level of only $26.8 million to include basic R&D and manufacturing.

The main objective of my presentation was to recommend a funding level of $20.0 million for SSL Manufacturing Improvements Program to sustain the funding level provided in the 2009 American Recovery and Reinvestment Act (ARRA). The Obama administration has requested a DOE Fiscal Year 2011 budget of $28.4 billion—the idea that less than 2% will go to SSL is a national disgrace. No other goverment activity will probably displace more foreign oil than SSL support over the next decade. Today, 22% of the nation’s electricity is used for lighting. The DOE projects that by 2030, nearly all residential, commercial and outdoor lighting will be replaced by solid state lighting, reducing energy consumption by 50%.

The US funding level is an embarrassment, and reflects the huge gap between political rhetoric (“America can be the 21st century clean energy leader by harnessing the power of alternative and renewable energy…”) and political action. While significant investment is goes to well-connected, 19th century industries like agriculture and banking, the opportunity to meaningfully participate in 21st centuries in being ceded to China and other well-governed, observant countries.

I based my argument for increased manufacturing funding by the DOE on the fact that the US share of capital spending in LEDs is only around 5% and the only way to positively impact manufacturing jobs in LEDs would be to assist US semiconductor equipment and materials manufacturers with a transition to LED manufacturing expertise. I explained that LEDs are based on semiconductor technology and to sustain the current US contribution to global LED manufacturing is to assure the continued strength of equipment and materials companies.

Sustaining, not growing, the US role in the mega-shift to SSL is about the best we can hope for. There are no LED fabs planned for the US. The Department of Labor estimates that semiconductor manufacturing is projected to lose 33.7 percent of the 432,000 jobs it had in 2008, an industry sector decline second only to department stores. Many of these jobs can transfer to LED and solar manufacturing.

China's investment and financing for clean energy rose to $34.6 billion in 2009, out of $162 billion invested globally, according to the report by the nonprofit Pew Charitable Trusts. U.S. spending ranked second, at $18.6 billion, with European nations also recording strong growth. U.S. spending on renewable energy fell 42 percent in 2009 from the year before, constrained by tight credit and the lack of a strong policy framework, the report said. It is likely to rise faster this year, helped by the enactment in 2009 of production tax credits for wind energy and investment tax credits for solar power, but with climate change legislation stalled in the U.S. Congress, the outlook for faster growth remains uncertain.

In terms of clean energy investment relative to the size of its overall economy, China ranks third in the G-20 at 0.39 percent, well behind Spain, which leads at 0.74 percent. The United States, at 0.13 percent, was 11th, the report said.

Don’t assume that just because cleantech manufacturing is moving to China that the US can retain lucrative R&D jobs and spending in the US. ValueNotes, an India-based business intelligence and research provider, stated that "According to the Chinese government statistics, about 750 R&D centers (foreign-funded) exist in China, located primarily around Shanghai, Beijing and Shenzhen." During the last decade, there has been an over 75% growth in employment of research personnel in China to reach close to one million (compared to about 1.3 million total researchers in the U.S.).

During the question and answer session, an audience participant suggested it was an “unlevel playing field.” I replied that the playing field was perfectly level, but unfortunately the US was simply refusing to play.

Africa's First Fab

2010-04-01T18:12:00.000-07:00

Congratulations to Nemotek on becoming Africa's first Class 10 clean room semiconductor operation. Looks like a nifty, well-run outfit. Nemotek Technologie, based in Morocco, manufactures customized Wafer-Level Cameras (WLC) for portable applications such as mobile phones and laptop computers.

Nemotek from Nemotek Technologie on Vimeo.

Grace Semiconductor Manufacturing: Marketing Trumps Technology?

2010-03-30T13:50:00.000-07:00

Dr. Ulrich Schumacher, CEO and president of Grace Semiconductor Manufacturing, provided a standing-room-only audience with detailed insights and plans into the IC foundry’s strategic priorities and technology mix as part of the keynote address at SEMICON China.

I found the presentation fascinating as a description of some massive marketing challenges for semiconductor firms in an era marked by widely variable manufacturing capabilities.

Dr. Schumacher’s presentation, entitled, “China Foundry’s Opportunities
In a Recovering Market” began with an overview of the China chip gap that underlies the long-term expectations for chip manufacturing in the world’s most populated country. While China became the world’s largest IC consumer in 2007, for the foreseeable future China will be able to produce less than 20% of its total demand. The resulting chip gap underlies what some people think will be continued government support for SMIC, Grace and other companies (the US prefers to “support” the low tech industries of banking and agriculture).

Dr. Schumacher gave the audience a generous overview of Grace’s business operations and history. He said the company has already seen revenues rebound to Q3 2008 levels and forecasts all time quarterly revenue levels in Q1 and Q2 2010. The company’s customers are widely distributed by regions (over 50% of revenues from US, followed by China and Taiwan, each contributing 16%), and by technology: logic (44%) memory (16%) and embedded flash (10%).

Like many semiconductor manufacturing companies today, Grace has no intention keeping pace with Moore Law. They aim to excel with a technology portfolio designed to meet a targeted selection of applications in the consumer, communication, computer, and automotive applications. According to Dr. Schumacher, achieving the low cost position in profitable value-added niches still requires consistent technology innovation and capital investment. It also requires, “highly effective technology transfers based on partnerships and services along the value chain".

To explain the Grace strategy, Dr. Shumacher provided detailed market size, growth and technology trends for key application segments, including microcontrollers, SiGe/RF, SmartCards, touch panel controllers, LED drivers, and power management. The target applications drive a Grace technology portfolio that includes geometries of 0.35µm, 0.25µm, 018µm, 0.15 µm, 0.13 µm, and 90nm. Complimenting the mix of geometries are dedicated technology platforms for NOR, EEPROM, embedded Flash, SiGE, and PowerMos optimized for fast time-to-production, yield and cost.

Like many IDMs and fab-lites, Grace has developed a More than Moore technology strategy that is based on complicated market specialization and segmentation. For companies like Grace—and I think the same situation exists for TI, NXP, Infineon, STMicro and others--financial success with this model will be based not on technology or timing massive capital outlays but on very sophisticated marketing. All the key components in the business strategy are essentially classic marketing problems, such as target market identification and sizing, customer needs analysis, competitive analysis, pricing, etc. The business problem has little to do with technology; many companies have the capability to design and manufacture (through foundry or in-house) mid-tier ICs in top computer, industrial and consumer applications, but few can do so profitably for a sustainable period of time.

Increasingly, companies with semiconductor manufacturing assets will have to target specific niche markets to survive. They will have to make very judicious decisions on capital spending and R&D. Maybe these decisions will take the form of Moore-1 or Moore-2, signifying how far off the pace from leading edge Moore’s Law capabilities a manufacturer prefers to operate. Financial health in the mid and low tier IC markets will be driven by margins and capacity decisions that will change quickly overtime. Challenges will always arise as the niche applications reach volumes that allow next node production enabling steep price declines, or during downturns when other foundries will more aggressively compete on price. With a portfolio of production platforms, companies can compete by selectively adapting their niches to keep ahead of competitors and sustaining healthy margins. To do that well, a gutsy commitment to marketing seems a necessity. And, for an industry that shown a high tolerance for technology risk, a business strategy dependent on smart marketing seems like a healthy step forward.

SEMICON-SOLARCON China 2010

2010-03-22T13:21:00.000-07:00

What the LED Industry Can Learn From Semiconductors

2010-03-22T13:16:00.000-07:00

I had the great opportunity to talk about SEMI and the LED industry at last week’s SEMICON China (see picture, standing room only). LEDs are the fastest growing semiconductor technology in the world right now (faster than PV). The market is projected to triple to $20 billion by 2013, and that’s just when the mega markets in lighting begin to open up. Currently, lighting consumes about 20% of the world’s electricity and solid state lighting (SSL) can reduce that by 50%. In other words, SSL is the most important energy conservation technology likely to make a big impact on our carbon footprint over the next decade.

The title of my talk was “Moore’s Law and Haitz’s Law and their Importance to Our Energy Future.” Everybody in the chip industry knows Moore’s Law, but Haitz Law is new to many semiconductor folks. Named after Dr. Roland Haitz, a now-retired scientist at Agilent Technologies, Haitz’s Law states that every decade, the cost per lumen falls by a factor of 10 and the amount of light generated per LED package increases by a factor of 20, for a given wavelength (color) of light.

Like Moore’s Law, Haitz's Law is an observation and prediction about the steady improvement over the years for LEDs. It is not based on physical science or natural law that can be observed in nature and proven by experiment, it a mere expectation of a learning curve or process optimization that will take place over time. It is my opinion that for Haitz Law to continue to be realized--like Moore’s Law in semiconductors--effective industry collaboration will be required.

I made my case by comparing semiconductor manufacturing technology of 1975 with LED manufacturing today. Both industries shared the following characteristics:

• Manufacturing was accomplished by highly proprietary processes using customized or highly modified equipment.
• Different wafer sizes and geometries were widespread (no standards)
• Throughput was only 50 wafers per hour
• Yields were low
• And Equipment Productivity was a challenge

In 1975, Moore’s Law had been realized for twenty years by individual companies, each working independently, without the benefit of technology roadmaps and industry standards. But by 1991, technology roadmaps and SEMI International Standards were essential to sustaining Moore’s Law.

The LED industry has been achieving the pace predicted by Haitz Law to the present time without any industry collaboration, such as technology roadmaps and standards. This is about to change. According to many experts, efficiency gains in lumens per watt will be slowing and limited to approximately 2x improvement before reaching their limit. Cost reduction goals according to the Department of Energy to reach large SSL markets, however, will require a 20X improvement. The performance of white LED devices depends on both the correlated color temperature (CCT) of the device and, to a lesser extent, on the color rendering index (CRI). We are beginning to approach what are perceived to be the practical limits of these parameters. Further cost reductions must come from manufacturing improvements in yield, productivity, throughput and other cost reductions.

The conclusion of my talk was that from what we know from the semiconductors and sustaining Moore’s Law, to continue to achieve cost reductions predicted by Haitz Law, highly developed forms of industry collaboration, such as technology roadmaps, industry forums and industry standards will be required.

Currently, no such industry collaboration activities are underway in the industry. Manufacturers of HB-LEDs are often vertically integrated and extremely protective of their intellectual property. Participating in standards activities, roadmaps and organized supplier dialogs are seen as a threat to the highly proprietary processes that enabled today’s market positions. In addition, everybody in the industry is dealing with enormous demand—including reported shortages in MOCVD tools—to meet today’s demand driven by LCD displays. No one has time.

The PV industry was similarly skeptical of organized industry collaboration 2 years ago, yet today discussions on industry roadmaps are beginning to take shape and standards activities are well underway (there are now 22 SEMI International Standards committees, working groups and task forces established with over 400 participants).

We are only at the beginning of a massive SSL market explosion expected to burst in around 4-5 years. To reach the cost reduction targets for commercial and residential lighting markets some of these issues will have to be addressed. And the social benefits and goals are hugely important and go beyond the interests of any one company. Large scale penetration of SSL in the US alone can replace up to 200 coal fired power plants, spewing tons of CO2 emissions.

To begin the process of industry collaboration and break down the walls of secrecy and suspicion, SEMI has organized a HB-LED Steering Committee to search for ways of achieving meaningful, effective collaboration. For more information on the Committee and what SEMI is doing in HB-LEDs, email me.

Winner Take All

2010-03-01T08:40:00.000-08:00

I had the great opportunity to see the induction of Mr. Richard Elkus into Silicon Valley Engineering Hall of Fame of last week. He currently serves on the Boards of KLA-Tencor and Lam Research. The award celebrates the accomplishments of engineers in Silicon Valley who have demonstrated outstanding professional achievement and have made significant contributions to the Silicon Valley community. Past nominees included William Hewlett, David Packard, Gordon Moore, Steve Wozniak, Ken Levy and TJ Rodgers. Stan Myers was recognized in 2008 and another former boss, Bob Frankenberg, was selected to the group in 2001.

Previously, Elkus was Co-Founder, Chairman and CEO of Prometrix Corporation, which revolutionized the concept of computerized wafer mapping that is now fundamental to the analysis of wafer development and production in the semiconductor manufacturing process. Prometrix merged with Tencor and later with KLA, becoming KLA-Tencor. He spent his first 10 professional years at Ampex Corporation, where he headed the team that introduced the VCR in September 1970.

In preparation for the evening, I quickly read his book, Winner Take All, which thoughtfully explains how industries develop and how nations, not just companies, compete. Over the past thirty years, the United States has basically surrendered entire industries to Asia. Americans no longer make cameras, TVs, MP3 players, computers, cell phones, or DVD players, and increasingly semiconductors. The conventional wisdom behind this loss of industries is cheap labor costs, but the real reason is American economic policy. While Asian leaders develop and nurture high technology industries because of the spillover benefits to the economy and society, US policy makers disregard and ignore it. “Economic planning” is treated as an anathema by US policy makers, somehow akin to the failed Communist economic planners of half a century ago. Rather than ensure the growth of productive and healthy industries like high tech, US policy makers campaign on “free markets” while rigging favors for political insiders and campaign contributors.

The US has an economic plan, it’s just not rational. We spend trillions on nineteenth century industries like agriculture and banking, and let high-paying jobs in high growth industries leave for Asia. Unfortunately, high tech innovation may just follow high manufacturing overseas, forcing the US try to sustain itself on service industries alone. Unless you’re a banker huddled in well-financed bunker in NYC, this isn’t a policy that’s going to do most folks much good. Many of my Republican friends are quick to claim that jobs leave the US because high taxes and government regulation. I think it’s more complicated than that. Innovative, high technology industries require thoughtful public private partnerships to thrive. There is no free market nirvana where taxes are low and jobs are good, health care is cheap, and opportunity is unbounded. There are only well run and poorly run countries. Richard Elkus knows this well.

Outboarding is Wrong

2010-02-16T16:40:00.000-08:00

Great article in the New York Times today about the practice known as “outboarding” where companies set-up shop in hotel meeting rooms during industry trade shows, avoiding the costs of formally exhibiting, but benefiting from the huge efforts by show managers and exhibitors who bring the crowd to the city. I’m sure no one is surprised that outboarding is common at SEMI expositions, especially SEMICON West.

What I enjoyed about the article was its insistence in bringing up the clear ethical issues involved in the practice. The article states:

The industry sees the vendors as parasites who latch onto the host convention and reap the advantages of the often-considerable resources spent on organizing the show and drawing a crowd — without paying their share of the costs.
The vendors, on the other hand, argue that they are suffering in the weak economy and that the rock-bottom rates offered by some hotels help them stretch their marketing budgets.

In the semiconductor industry, some people have been outboarding for so long they don’t even realize the ethical implications of their behavior. They think there is nothing wrong with setting up shop in the Marriott, W or Yuerba Buena for private customer meetings, drawing people away from the exhibitors who are bankrolling the customer draw. Most of these outboarders even congratulate themselves on being so wise and so clever with their marketing dollars, how they don’t have to waste time and effort on exhibiting when they can cherry pick the top buyers to come to their hotel suite or hotel exhibit site. They are often the loudest critics of trade shows, claiming how times have changed, how the industry has matured and how the need to differentiate through exhibits and live marketing has passed.

The fact is these outboarders are trying to reap of the benefits of SEMICON West without paying any of the costs. That’s not ethical in my mind, it’s not what honorable companies and marketers do. And customers know it. They might meet these outboarders and listen to their PowerPoint presentations, but they understand the context. It frames their perspective and reinforces their commodity bias. Cusomers know your freeloading on West. Start-ups may outboard, but leaders don’t. Commodity suppliers might outboard, but not companies serious about extracting the full differentiated value of unique technologies and products.

We try to limit outboarding by trying to reserve as much of the local hotel space as possible. We do this to protect our franchise—our IP if you will—but also to protect our exhibitors who are undermined by the outboarders. We are not as powerful as the CES show and do not have the tools or authority to police outboarders as much as we’d like (hotels hold the cards here).

And we try to give companies ways to participate in West other than exhibiting. We have low cost meeting rooms that can be built to in Moscone, we have had underwriting programs that enable participation with exhibiting, and we think a small booth with a sponsorship for high quality visibility could be a great compliment to a private meeting room. And, we are open to new ideas on how best to make West work for any company.

I certainly sympathize with companies who have survived the recent industry depression and can’t waste any marketing dollars on ineffective programs. At the same time, I can’t sympathize with people who claim trade shows don’t work anymore, yet spend a ton of money on boozy parties and gutless meeting rooms. Just because you can benefit from West without paying for it—just like you can benefit from SEMI without being a member—doesn’t make it the right thing to do.

SEMICON Korea 2010

2010-02-11T10:32:00.000-08:00

Tien Wu Enjoys Life in the Jungle

2010-02-04T17:06:00.000-08:00

One of the best speakers in the semiconductor industry is Tien Wu, COO of ASE, the assembly and test leader. His day 2 keynote at SEMICON Korea was an inspirational mix of insight and intellect. We’ve heard many of the concepts (the chip life cycle, the next big wave, etc.) but rarely packaged and delivered so articulately.

Wu began his talk with claiming that “2009 was a great year…we will always remember it,” and with that contrary perspective he began to ask why anyone would choose to remain in this crazy business. A look at the boom and bust cycles over the last 20 years—basically delivering a long term growth rate of 4-5%, about the same at the global GDP—confirms the industry is in chaos. The only growth comes at your competitor’s expense. Price is used inappropriately; sustained profit is elusive. It’s a 0-sum game; value isn’t created by innovation, it come from someone’s loss.

“It’s a jungle out there,” says Wu. Survival goes to the fittest. The laws of natural selection are more important than Moore’s Law. Not just company’s fight for survival, but countries: we fight against Japan, Japan against Taiwan, Europe against everyone, and everyone against China. Why would smart people and smart money choose to enter this primitive battlefield where long term returns are elusive and survival threatened?

But Tien Wu, like the rest of us, enjoys life in the jungle. He’s not a banker or day trader comfortable moving his money from winter wheat to pharma, from one good bet to another. He sees the bright side. “World PC penetration is only 17%.” Every wave from innovation from computers, to the internet, and now information is bigger than the next. He is excited and challenged by the “long tail.” He’s not afraid of consolidation because its part of the long tail process he’s seen unfold in PCs, communications and information. A few giants dominate those industries, but Apple and Samsung have proven that companies can move from one wave to another.

So what’s next? Life sciences, bio med, green energy, intelligent appliances? Tien Wu doesn’t know or he won’t say. He will point out, however, that with a logo like ASE’s (Sun-Moon-Light) “we are destined to do solar cells.”

The future of the industry will be characterized by the long tail and who can survive serving the increasingly hard-to-reach customers entering the market. It will go to those that can make “the hyper jump” into the new wave, such as solar, robotics, and solid state lighting. It will also go to those who leverage the new regions of China, India and other countries. Semiconductors are only 0.5% of the world’s GDP. Is this where the industry stops? Hardly, it’s where it begins.

Wu concluded his presentation with pointed criticism of the semiconductor industry. “Too nationalistic,” “too functionally limited,” “too insulated.” The industry suffers from the “curse of IT.” Successful companies must break out of the boundaries of IT and find new frameworks to understand and serve the world. The new domains will be understood through the perspectives of art, medicine, energy, culture. His populates his own staff with multiple disciplines and he has strong opinions about maintaining truly global perspectives.

For someone who saw 2009 as a “great year,” it’s no surprise that Wu sees a bright future with a long tail, an evitable hyper jump, and the emergence of immense of new markets in an ever-prospering world. At only 0.5% of GDP, semiconductors “remain the most exciting, dynamic, and yes, chaotic industry.” And out of this chaos, heroes will emerge.

After Health Care, Good Luck Energy Policy

2009-12-22T15:54:00.000-08:00

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

2009-12-18T14:59:00.000-08:00

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

2009-12-16T11:46:00.000-08:00

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

2009-12-16T11:45:00.001-08:00

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

2009-12-05T12:30:00.000-08:00

Thanks Applied for a great event.

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

2009-11-16T11:31:00.000-08:00

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.

2009-10-19T13:26:00.000-07:00

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

2009-10-14T17:00:00.000-07:00

SEMICON Taiwan

2009-10-14T16:59:00.000-07:00

Extreme Innovation at Tong Hsing

2009-09-29T17:27:00.000-07:00

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

2009-09-28T00:26:00.000-07:00

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

2009-09-09T11:56:00.000-07:00

Are You Ready for the Rebound?

2009-08-28T16:57:00.000-07:00

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

2009-08-24T15:41:00.000-07:00

Great Feedback on SEMICON West

2009-08-12T18:30:00.000-07:00

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

2009-07-27T14:22:00.000-07:00

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

2009-07-20T20:46:00.000-07:00

Historic Milestone? Only Time Will Tell

2009-07-12T23:54:00.000-07:00

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

2009-06-22T10:49:00.000-07:00

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

2009-06-12T08:34:00.000-07:00

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'

2009-06-05T10:11:00.001-07:00

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

2009-05-29T13:31:00.000-07:00

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

2009-05-20T16:20:00.000-07:00

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

2009-05-15T12:02:00.000-07:00

“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

2009-05-12T19:50:00.000-07:00

A Tale of Two Cities

2009-05-04T16:12:00.000-07:00

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?

2009-04-27T18:55:00.000-07:00

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

2009-04-21T14:36:00.000-07:00

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

2009-04-13T16:15:00.000-07:00

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

2009-03-29T16:21:00.002-07:00

New Killer Apps for 2010 and Beyond

2009-03-27T15:49:00.000-07:00

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.

What's New at SEMICON West

2009-03-26T18:00:00.000-07:00

Interesting Text-to-Speech application from Xtranormal

From the Cultural Revolution to the Solar Revolution

2009-03-19T02:51:00.000-07:00

Samuel Yang, Vice General Manager of JA Solar was among the recent speakers at this week’s SOLARCON China and he told an interesting story about how people during China’s Cultural Revolution survived and adapted during times of great stress. He told the story to reflect on today’s difficult economic situation. During this time, education was disdained; professionals and academics were sent to re-education camps to learn the values of the collective commune. Families adapted by learning to educate their children at home, often in secret. When times changed, the country was stronger, having instilled a broad based, grounded respect for knowledge and educational achievement.

Drawing parallels to today, he said that now is the time to focus on internal strengths. He said that individual companies can’t control the macroeconomic environment, they can only adapt to opportunities all around them. He used another uniquely-Chinese example to make his point by describing how the mythical Chinese warrior may lose a battle, but will retreat to the mountains to develop his skills for a triumphant return.

The most common mantra in the West for dealing with the global recession is the oft-quoted remarks by Craig Barrett at Intel: “Every time you have a recession, you try to save your way out. Never works. You have to invest your way out of a recession.”

Every culture, every individual, every business is dealing with the economic crisis in different ways, some effectively, some less so.

There are many personal and organizational responses to the catastrophic recession: work harder, focus on core competencies, diversify, learn new skills, customer-focus, cut costs, etc. These common responses are certainly valid and rational. They can be accompanied with elaborate details, complete with project schedules, pert charts, balance sheets, business scenarios, and action plans. What they often lack though, is passion.

The semiconductor industry was built on passion. Pioneers of the industry knew they were building the Information Age. They knew they were part of a unique time in the human story, comparable to the Renaissance, the Reformation, the Industrial Age, the Age of Democracy. There was greatness all around them and they knew they were making history.

This passion was the foundation of SEMI. It drew leaders together, not just through mutual business interest and shared objectives, but through the shared experience of extraordinary times, accomplishing remarkable achievements that extended beyond themselves, their companies, even their industry, and impacting the entire human experience.

Much of this passion, this knowledge of greatness, is leaving the industry. The Information Age is nearly 30 years old. A new generation of leaders is desperately trying to survive. A common perception exists that even when the rebound occurs, the industry will never be the same. As the industry association, SEMI could never be more valuable, more effective, better staffed, better managed, more global than today, but the binding emotional spark of an earlier era, the shared reward of participating in a historical era, is distant and cloudy.

But a new age is upon us where great genius, great urgency, great opportunity, and great need are dawning. Solar energy will remake the world, maybe even save it. Unsubsidized grid parity is fast approaching and will occur in most regions of the world by the end of the decade. By 2050, solar power could deliver over 50% of the world’s electricity, bringing light, heat and hope to billions of people currently without grid connected power. It is the leading solution that could protect the world from devastating climate change.

It is a mission every bit as an important, worthwhile, life affirming, and valuable as that which drove the semiconductor industry and the Information Age. It is this generation’s call to greatness.

Not all SEMI members currently participate in the solar industry, but many are extending their knowledge of wafer processing and thin film manufacturing to PV. Many are asking the association to take a leadership position in PV, to address both the shared business interests of the industry, as well as provide the emotional connections of joining a monumental global challenge. They are asking us to invest scarce resources into PV and transition away from semiconductors to the emerging opportunities and overwhelming demands of the nascent solar industry. These are difficult, gut-wrenching decisions for SEMI, not without enormous risk. These same risks are being faced by many SEMI members who are peering into the future of semiconductors and are uncertain and fearful of the shape of what they dimly see.

Especially during these trying times, individuals and companies have to make difficult decisions. Sometimes the right decision is to work harder, work smarter, retrench, right-size, and retreat into the mountains to save yourself for future battles. Yet greatness doesn’t retrench. It seeks to change the world in ways that few can foresee. The founders of the semiconductor industry knew this. The leaders of the next great epoch in science and technology know this as well.

Dow Corning Rocks

2009-03-17T15:52:00.001-07:00

Event Marketing in 2009: Challenges, Changes and Opportunities

2009-03-11T19:00:00.000-07:00

I had the fortunate opportunity to participate in a panel discussion on the state of the events business, hosted by the International Association of Exhibitions and Events (IAEE). The title of the two-hour discussion was Event Marketing in 2009: Challenges, Changes and Opportunities and was focused on the economy’s impact of on the event industry and how exhibit, event and show managers were responding.

It was a timely topic and I really enjoyed to opportunity to discuss SEMI plans and my own personal feelings about what I see as a radical shift in the events industry. Joining me on the panel were event superstars representing a diverse cross section of perspectives and industries.

- Sandra Toms-LaPedis, AVP/ GM RSA Conference (information security industry)
- Scott Schenker, VP Client Services George P Johnson (global leader in event marketing; top auto show and corporate events marketer)
- Debra Rosencrance, VP Meetings and Exhibits for American Academy of Opthalmology

In terms of how SEMI was responding, I reiterated my mantra that I have been droning on about with exhibitors, suppliers, employees, wife, kids…
Our response to dead economy is in 5 key areas:

Diversification into solal
Increased emphasis on new and emerging markets, both industry (solid state lighting, printed electronics, MEMS, nano and others) and geographically (Russia, India, China)
Focus on global sales coordination and efficiency (we have reorganized to realigned our sales and outreach team to work faster, smarter and more as a team)
Forming mutually rewarding partnerships with other events and associations (Synergy!)
A relentless commitment to lowering the total cost to exhibit for our members and customers

This last point on cost reduction efforts was my main point and something I wanted to shake up the room with. I told the audience that I was representing thousands of exhibitors who were under enormous pressure to improve show ROI in this economy and that SEMI was totally committed to helping exhibitors reduce the total cost of exhibitors. In pursuit of this, we are going to our hotels, service contractors, facilities, shipping companies, and our own operations and telling them the world has changed, you must reduce your price to our exhibitors. We are doing this on a worldwide basis and we are not being nice about it. We are being successful.

We even welcomed anyone who could partner with us to pressure the city and Moscone Center to gain concessions from the unions. I believe that now is the time to seek real change with the labor situation in San Fran and press for rationality in rates and process.

This is also a critical time in the careers of many exhibit and event managers. Every recession seems to hit marketing budgets first, especially trade shows. And when trade shows are canceled, exhibit managers and trade show coordinators are often the first to get laid off. I have seen this up close and personal for nearly 30 years and it’s a killing zone right out there today. You don’t see too many old timers in this business; they get crushed, weeded out.

Young, talented people often get their start through event marketing. They develop skills, professional expertise, they benchmark leaders, understand best practices and learn how to integrate events to an integrated marketing system. And then the recession gets them. When the shows go, they follow. They are seen as chained to their medium, not to their businesses. They know more about laminates and event lighting than they do about their products and customers. Trade shows are a cruel business and people who aren’t grounded in business fundamentals and prepared for other roles, functions and responsibilities will eventually get caught when times go sour. And they always go sour, sometime.

So, I hoped to share some of those observations and practices with this great group of committed professionals. I hope it helped someone. It made me feel better.

Partnerships: Now More Than Ever

2009-03-02T17:47:00.000-08:00

One of the most effective and efficient ways to serve SEMI members is to work with other member organizations and associations. It can be effective because other associations can deliver real benefits to SEMI members, such as program content, research reports, technical insights and initiatives, and other valuable services. It can be efficient because SEMI staff can work with one partner, and impact an entire segment of members sharing the common interest. Identifying potential partners and finding common purpose is a critical area that SEMI needs to excel at.

SEMI is a very wide-ranging industry association that spans numerous technologies, industry segments, countries, and professional societies. We are wide but very thin. Many professional and industry organizations are very deep, but narrow in their geographic and technology reach. This reflective harmony provides a natural basis on which to work with many organizations in a win-win relationship. Our reach compliments their depth. By working together, we can both achieve goals that we could not separately.

SEMI works with dozens of industry organizations, media companies, research firms, and technical societies. Our relationship is often based on cross promotion; SEMI promotes a partner's event or organization in exchange for promotion or support of SEMI events and services. Many partners provide technical guidance on SEMI program content at conferences and expositions and some partners offer member discounts on their products.

A recent partnership with the MEMS Industry Group is a good example. Currently SEMI places MIG events on our calendar and is promoting MEMS Marketplace, an online portal that will serve as a matchmaker for companies in the entire MEMS supply chain, in our newsletter. In exchange, MIG will promote SEMICON West to their membership and provide guidance on TechXPOT program content. We have several other industry partners at SEMICON West, including Si2, IMAPS, MEPTEC, International Engineering Consortium, Southwest Test, BITS, OIDA, and more. We partner with IEEE on the Advanced Semiconductor Manufacturing Conference, and we should do more them. In PV, we work with EPIA, JPEA, ITRI, SEIA, and many renewable energy organizations.

Sometimes SEMI will partner with a private event organizer like Solar Promotions to put on Intersolar, or with a market research company such as Yole Developpment, when we are confident it will benefit SEMI members.

The driving motivation behind these mutually rewarding agreements is member value; if helping another organization achieve their goals, even with a potentially competitive event, helps SEMI members, that we should find a way to work together.

If there is an organization that you think SEMI should work with, please let us know and we’ll do our best to find a common ground in advancing member value.

Equipment Bookings Lowest Levels Since 1991

2009-02-20T16:58:00.000-08:00

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.

Obama Signs Semiconductor Industry Bailout

2009-02-19T16:34:00.000-08:00

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.

Reducing the Cost to Participate in SEMICONS

2009-02-18T08:26:00.000-08:00

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.

Craig Barrett on the recession

2009-02-07T12:50:00.000-08:00

SEMICON Korea

2009-02-04T17:52:00.001-08:00

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.

A Solar Farm in your hands

2009-01-31T10:17:00.001-08:00

Five Reasons to Exhibit During A Recession

2009-01-26T19:50:00.000-08:00

One of the most prominent quotes in our industry during this recession is by Craig Barrett who said last September, "You can't save your way out of a recession, you have to invest your way out."

This is true for marketing as it is for any other functional area. Successful companies move forward, during good times and bad. They differentiate, they compete, they showcase their committment, strength and vision. They work to create and influence the future, not fall victims to it.

And for many companies, marketing in the semiconductor industry involves exhibiting at a SEMICON event. There's just not that many alternative mediums, mechanisms and tools out there to influence customers. For many companies, exhibiting is hard during this nuclear winter. Everyone is cutting cost costs and cutting staff and ROI in trade shows can be elusive. But the same reasons you exhibit in good times are at present during tough times. Sometime they are even more present. Here's my five top reasons to exhibit during a recession:

1. Now more than ever, companies need to differentiate their products and company in the marketplace to protect their margins and market share. The industry is consolidating and customers are looking for suppliers that provide meaningful, long-term benefits that other companies can’t match.

2. Now more than ever, suppliers need to prove they are sustainable and can survive these tough times. Companies need to demonstrate their R&D and product roadmaps are not being sacrificed to cost cutting. Customers have never been skeptical about suppliers’ schedules, capabilities, financial viability, and commitment to the semiconductor industry.

3. Now more than ever, companies need to compete aggressively to win 2009 and 2010 sales opportunities. Numerous studies have shown that companies that continue to invest in marketing during recessions gain market share.

4. Now more than ever, suppliers need to collaborate with their customers to position their products for the eventual upturn. Customers are responding to the downturn by thoroughly examining their processes, products and key vendors. Active, credible, engaged participants in the customer planning process will be the big winners in the next upturn.

5. Now more than ever, companies need to be efficient and effective in their marketing and new product introduction plans to achieve meaningful results. In the semiconductor industry, companies that utilize integrated marketing programs that combine pre-show communications, event-based marketing and product introductions, and post-show messaging and strategic sales follow-through will ramp up sales faster and more efficiently than companies who have gutted their marketing and sales support programs.

Heard at ISS

2009-01-14T20:17:00.000-08:00

Demand is being destroyed on a very large scale.

The US Dollar- The best looking horse in the glue factory

This too shall pass.

When the bottom falls out, the impact can be both real and psychological...it can be both cyclical & generational...Do pre‐crisis assumptions still hold?

We are bullish on stocks... semicaps should lead recovery

Moore’s Law doesn’t apply in analog and it hasn’t hurt prosperity.

I am very optimistic about where we are going.

Things will get worse, could get a lot worse

Start each day with a smile and get it over with.

You can’t save your way out of a recession, you have to invest out of it.

The semiconductor suicide hot line is open.

Demand is only deferred, not destroyed.

Do not let a crisis go unused. This is our moment!

The economy accelerates trends.

Option #1: Wait around for the next “killer” app.
Option #2: Create the tools to enable innovation.

Real men build power plants

Favorite Slide:

300 mm Prime: Now More Than Ever

2009-01-09T13:59:00.000-08:00

Worldwide semiconductor manufacturing equipment sales have declined to levels not seen since 2003 and the industry anticipates a second year of double-digit decline in 2009. According to the year-end edition of the SEMI Capital Equipment Forecast, sales of wafer processing equipment are expected to decline by about 28 percent in 2008 to $22.95 billion, and drop another 21 percent in 2009 to $17.91.

Gartner predicts total equipment spending in 2008 will reach US$31.1 billion (down 30.6% from 2007) and fall 31.7 % in 2009 to $21.2 billion. iSupply forecasts capital spending by chip makers on equipment will decline to $35.2 billion in 2009, down 17.6 percent from 2008, the lowest level of spending since 2003. The outlook for 2010 is uncertain at best.

Under these market conditions, chip makers are looking for practical improvements in fab productivity and focused on overcoming enormous challenges in keeping pace with Moore’s Law. Equipment manufacturers are simply trying to survive and channeling scarce R&D dollars into new product and technology solutions that customers will buy.

To address these industry priorities, SEMI formed the Global Equipment Suppliers Group (GESG) to address critical technology and business issues that affect the semiconductor industry. The initial focus of the GESG was to support of the industry wide effort on 300 mm Prime, a broad set of product, process and technology initiatives designed to enhance 300 mm fab productivity.

The SEMI Board of Directors also commissioned a the Equipment Productivity Working Group (EPWG) to address 450 mm wafer transition and work with ISMI on various studies, as well as performing independent analysis and surveys of critical technology roadmap issues. The mission of these two special interest groups is to maintain a forum for equipment suppliers to address issues facing the industry and to develop an organized global voice to influence technology roadmaps, device maker and foundry planning, supply chain collaboration, and related issues.

In 2007, the International SEMATECH Manufacturing Initiative (ISMI) announced its 300mm Next Generation Factory (NGF) Program to support the industry’s need for lower costs and reduced cycle time in 300mm wafer manufacturing. The ISMI 300mm NGF Program promised to take a wider look at 300mm productivity with a broader set of initiatives with some of the work transportable to older 200mm and 150mm factories.

Initial projects comprising the 300mm NGF Program included First Wafer Delay/Setup Reduction, Predictive, Preventative Maintenance (PPM), Equipment Data Quality, and
Fab-wide EDA proliferation.

Since the ISMI NGF announcement and the formation of the EPWG and GESG, considerable time, money and attention has been devoted to the economic viability and justifications for a next generation wafer size. In June of 2008, EPWG released a report that analyzed the economics of 450 mm wafer transition. Among the report’s conclusions were that the semiconductor business today is consumer-driven, and needs to be capable of handling short-run, rapid-change products with very short cycle times were paramount. The report also concluded that reduced cost for 300 mm wafer processing was driven by the use of factory automation, advanced process control systems, and mini-environments (FOUPs).

Current market conditions reinforce these conclusions and call for a renewed efforts to advance industry-wide productivity solutions under the current 300 mm Prime and Next Generation Fab framework. Much of the resources placed on 450 mm wafer transition have detracted from the 300 Prime efforts that could have widespread benefits throughout the industry. Agile fabs and cost reduction are what the industry needs today, not expensive gambles on wafer size that transition that further threaten Moore’s law and the economic viability of the global semiconductor industry. This is what we are spending time and attention on in SEMICON programs; it's what the industry needs to be focused on in our limited opportunities for pre-competitive, and cusotmer-supplier, collaborations.

For more information, see the SEMI website at www.semi.org/productivity

Trade Shows and the Recession

2008-12-31T14:41:00.000-08:00

Take a look around you. The industry is in the worst depression in history. After a dismal 2008, capital spending will be down 20-30% in 2009 and 2010 seems a lot a farther than 365 days away. Customers are consolidating and new fabs are not getting built. Top tier suppliers are dropping employees by the busload. Fab capacity is rising. Companies are going under; careers are being lost.

So, what you should do with your marketing and trade show budget? Cut it to the bone right? Save money, save people. Hunker down and live to fight to another day, right?

Not so fast.

Professor John Quelch of Harvard Business School says in an article, “How to Market in a Recession”:

“This is not the time to cut advertising. It is well documented that brands that increase advertising during a recession, when competitors are cutting back, can improve market share and return on investment at lower cost than during good economic times….”

The fact is the market doesn’t care about the macro business environment. Buyers are people just like you and me who make decisions and form opinions based on the same criteria they always use. During a recession, they may not have as much money to spend, but they are still forming judgments about you and your competitors. When they do buy, their judgments and opinions will be used to pick winners and losers. They will form these opinions based upon your sales pitch, your data sheets, your reputation, your product positioning, your pricing, and a lot of other things. They will form these opinions with or without trade shows. Some of the factors you can control and some you can’t.

During tough times, you can exclusively rely upon your great products and technologies and assume your customer will use the exact feature/benefit calculations as your product planning team. You can rely upon your sales people and assume they are better than your competitors. Who needs marketing? It’s a recession and we can’t afford it.

But smart business people know that products without marketing are commodities without margins. You better be the low cost producer or go home.

Marketing is the active process of differentiating your products in ways that are understandable and meaningful to your customers. Sales people alone can’t deliver differentiation. Technology alone can’t deliver differentiation and neither can company reputation. Smart companies that invest in product differentiation are also usually the ones who make sure they are telling their customers about the value of the diffentiation in creative, compelling and convincing ways. Usually this means more than a Powerpoint sale spitch and email price negotiation. That;s how you sell salt, not advanced technology.

So what’s the best way to deliver meaningful, margin-creating, share-building differentiation in this industry?

Don’t know. It depends on the product, the company and customer.

But I do know what happens to trade shows during a recession?

The weak competitors fall away. Good firms exhibit and pick up business.

SEMICON Japan

2008-12-03T23:27:00.000-08:00

I am writing from Day 2 of SEMICON Japan and it’s a beautiful day with Mt Fuji out my window. You would hardly notice there is world economic crisis going on.

While the industry slump is omnipresent, the aisles are packed and some encouraging news about the economic rebound has been heard in a few, isolated places. During the Market Symposium, both iSupply and Bill McClean of IC Insights were optimistic that the eventual rebound will start mid 2009. This outlook was shared by Masashi Marumachi, Corp SVP at Toshiba and Frank Huang, Chairman of Powerchip. McClean is especially optimistic on the second half recovery start, seeing low oil prices, coordinated global economic stimulus, low inventories, and historical precedents as solid indicators. This is considerably better outlook than some doomsayers who suggest the upturn won’t occur until 2010.

Some data on SEMICON Japan:
1476 exhibitors (1548 in 2008, a record year)
4450 booths (down from 4602 in 2008, again a record)

Several exhibitors have reduced expenses by limiting the number of tools exhibited and many exhibitors have reduced staff attendance (especially international exhibitors).

Still too early too predict visitor attendance. Probably down 10%. Web traffic is up 25%; maybe folks who aren’t here are vicariously attending through the Internet.

While the business climate has dampened the mood, innovation is on the move with many product announcements, especially TSV, mask making, flip chip, metrology.
SI featured a few.

As always, the Semiconductor Technology Symposium has diverse and outstanding content. All key segments of the industry are covered with full-day and half day programs. This is enabled by a great facility at Makuhari (deep content requires lots of rooms) and the great contributions from the active participation of many committees.

What I am most proud of in the programs is how they draw upon what you should know, what you need to know, and what you what you like to know but don’t have leading edge understanding of the most advanced scientific and engineering concepts in the world today.

What you should know is best illustrated by the outstanding keynotes on sustainability and the industry’s role in combating climate change.

What you need to know are the latest products and solutions that can be used to solve real production and design challenges in today’s fabs.

And what you would like to know is how the winners of the 15th annual STS Awards for outstanding technical presentations will affect your company and business.

This combination of industry advocacy, updates on the latest advances in equipment and material solutions, and advanced peer-reviewed technical papers is the mix we try to achieve to at every SEMICON. While most SEMICONs do not feature peer review technical papers, they do try to present the “what’s next” topics, developments and ideas that are just over the horizon. It’s this combination that make SEMICON so unique in the exposition world and so central to our industry.

Applied Materials Silicon Valley Turkey Trot

2008-11-17T16:32:00.000-08:00

Please join me for a fun run on Thanksgiving Day at the annual Silicon Valley Turkey Trot, sponsored Applied Materials.

Start times for the 10K and 5K races are 9:00am. Proceeds go to local charities.

To make it easier to participate, I will reimburse you for registration fees (lust let me know ahead of time). In addition, if you can run the 10K faster than 50 minutes, I will donate $50 to your favorite charity.

For more information, http://svturkeytrot.com/

UPDATE 11/29/2008: Despite spending Wednesday touring wineries with my family in Napa Valley, I woke up early Thursday and ran a 48:36 in the 10K. It was obviously a very slow field, becuase this placed me 8th in my age group (0ver 100 runners) and about 220 out 2500 runners. I've run faster, but never placed this high in a big 10K. Like I said, weak field.

Launching a New Event Brand :SOLARCON

2008-10-31T10:29:00.000-07:00

The growth and importance of PV manufacturing has driven the need for SEMI to create a new event brand: SOLARCON. Each of the SOLARCON events in Korea, China, and Singapore will be co-located with existing SEMICON events in the regions. Each of these events had a prominent PV exhibitor and attendee base and strong program this year, and exhibitors were near-universal in the support for continued growth in the PV area.

In co-locating with SEMICON, SOLARCON will leverage the existing visitor and show infrastructure, allowing exhibiting companies serving the photovoltaic and microelectronics markets to reach both communities without needing multiple exhibits in multiple events. The co-location strategy also continues SEMI's commitment to grow existing shows and partnerships while reducing the proliferation of new stand-alone events.
The thinking behind the branding was that PV is a distinct and separate community from semiconductors and it needed its own identity. While manufacturing leaders understand the synergy between PV and chip making—and do not want more events to dilute the audience--the PV industry is too diverse and large to feel entirely comfortable depending on a “semi-com”. While increasingly the PV industry is being populated with veterans from the chip industry, they also attract many young engineers who have no relationship SEMI and SEMICONs.

The name SOLARCON is an obvious “frankenword” combining solar with the CON from SEMICON. The result is a hoped-for brand extension that provides security and stature, with the necessary identification with solar industry. It seems like a simple and easy name, but we struggled with considering many alternatives and whether to focus on PV rather than solar.

The new name will allow us to better target and differentiate our exhibitor and attendee marketing and program development.

The new events and dates announced are:

SOLARCON Korea, January 20–22, 2009, COEX, Seoul, Korea
SOLARCON China, March 17–19, 2009, SNIEC, Shanghai, China
SOLARCON Singapore, May 20–22, 2009, Suntec Exhibiton Centre, Singapore

The SOLARCON events in Korea, China, and Singapore join other SEMI and PV Group-sponsored and supported PV events including PV Japan, Intersolar (Munich), and Intersolar North America, the latter co-located with SEMICON West in San Francisco.

We have just announced a new president and office and India, so you might see the announcement of SOLARCON India very shortly.

SEMICON Europa

2008-10-15T15:45:00.000-07:00

Exhibitor feedback was surprisingly good at this year's Europa. Key customers were attendance and and Programs's attendance equalled last year. Despite the economic climate, most exhibitors said the show performed well for them. AMD's announcement and special supplier forum was a big success.

Great Europa slide show, here.

MEMS Ingenuity

2008-10-06T22:47:00.000-07:00

I was at the International MEMS/MST Forum all day yesterday and the one fact that jumped out at me was that approximately 250 MEMS companies make less than $35 million dollars. This industry has a long tail.

MEMS is a technology that represents an enormous amount of creativity and manufacturing ingenuity. There is a spirit entreneurialism at work that reminds you of the early days of the PC and the dot.com era. People have ideas and dreams and skills and they believe they can make a difference. They believe they can be the first to see a need and work out the engineering and get on the cost curve and beat the big guys. The industry isn’t yet about scale, it’s about cleverness and taking on risk. While the market numbers are still dominated by the big LDP and printer apps from TI and HP, the MEMS business is still characterized by one-off devices where someone sees a better a way to marry a sensor with a microprocessor and do it better than companies with thousands of engineers and tons of capital.

The process of creating a device seems to be often one of basement creativity and engineering on-the-fly. First you have the application: integrating pressure, temperature, motion and other inputs with a control system for an automobile, a cell phone, a camera or one of the hundreds of other devices that interact with people and an analog world. Everyone who uses a cell phone or power tool or industrial device could probably think of ways to marry functions among parts or create new features or functionality. Then there is the real tough engineering of developing a faster-better-smaller-cheaper package with a dependability and robustness that can attract a big customer. Getting the first products to market seem to entail a whole lot of trial and error—devising new manufacturing methods and packaging techniques that need to be customized by the device, by the process and by the fab. Testing the part often requires that development of an entirely new testing protocol and specially designed equipment. You don’t do this stuff on computers and with formulas. You need to get your fingers dirty.

There will be a shakeout in the market and many of these small companies will be overwhelmed by economics, competition, fate, bad luck. And new processes, design tools, processing equipment and test systems will make the market more efficient, more standardized, more about scale and optimization. But while MEMS have been around for a while, it’s still a business characterized by dreamers and doers and hands-on engineering and that’s a good thing.