SEMICON West Update

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

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

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

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

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

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

SEMI Members Essential to a Sustainable World

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

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

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

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

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

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

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

The Value of Exhibiitng in a Downturn

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

“Less people, but more authority to purchase.”

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

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

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

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

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

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

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

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

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

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

SEMI High Tech U Coverage

A Tale of Two Cities

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

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

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

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

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

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

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

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

(Phot: Dresden Messe)

450 Now, Are You Kidding Me?

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

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

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

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

Revisiting the Depression

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

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

New at SEMICON West—Extreme Electronics

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

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

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

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

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

SEMICON and SOLARCON China 2009

New Killer Apps for 2010 and Beyond

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

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


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

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

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

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

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

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

What's New at SEMICON West

Interesting Text-to-Speech application from Xtranormal

From the Cultural Revolution to the Solar Revolution

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

Event Marketing in 2009: Challenges, Changes and Opportunities

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

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

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

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

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

SEMICON Korea

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

Five Reasons to Exhibit During A Recession

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

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

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

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

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

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

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

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

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.

Awards for SEMICONs

We are thrilled to see that SEMICON trade shows have been recognized as the leading global brand by the publishers of Trade Show Executive at the magazine's inaugural 'Gold 100' Awards ceremony.

This is a big deal.

As the first year for the show, they could have chosen the CES show, CeBit, auto shows in Detroit or Tokyo, etc. but they chose SEMICON. The reasons are because no other global event brand has been so successful over time, or in so many markets. Many trade shows have tried to extend into different markets—Nepcon comes to mind in our industry—but they’ve failed miserably. SEMICONs are unique in the world of expositions in that every serious person in the world of semiconductor equipment and materials is deeply familiar and loyal to their regional SEMICON.

Obviously, credit goes to Stan Myers and his predecessors at SEMI, and also to Dan Martin and Vicki Hadfield, who have managed the brand through the difficult post dot-com period. The folks who came before them and the anchor exhibitors who have developed and supported the brand are also fundamental to SEMICONs’ success.

Understanding this strong heritage, the current team at SEMI is doing our best to sustain the value of the brand and the SEMICON shows. We were recently awarded first place in Brand Design/Development (for large events) by the International Association of Exhibitions and Events (IAEE) in their annual Art of the Show Competition for the SEMICON and FPD brand identity system. The Art of the Show Competition recognizes excellence in promotional materials for the exhibitions and events industry. It includes 13 different categories of competition, spanning three show sizes.

While IAEE has many awards for marketing and design, we consider this award the premier recognition for marketing excellence because it encompasses all the elements of effective brand management--from creative execution of brochures, e-marketing, onsite decoration, and other design elements, to messaging and positioning of our value proposition. What is especially noteworthy in our brand system is the complex and collaborative execution across all SEMI expositions throughout the world, involving all our regional offices. It leverages world class design from a Best-of-Breed agency, while cost effectively implemented across thousands of projects through in-house creative staff, multiple vendors in show decoration and project design, and local teams in all our regional offices.

SEMICON Taiwan

A Crisis in Leadership

You may have heard that the solar energy investment tax credit (ITC) is being caught up in legislative and party politics and many observers think they are doomed until a new Congress convenes in 2008.

Some $500 million in investment and production tax credits will expire Dec. 31 without the renewed ITC. Without the credit, many renewable energy projects, including two solar power plants that will generate about 800 megawatts of power, won’t be built. In fact, Navigant Consulting estimated that investments in wind and solar power in 2009 would amount to $26.6 billion with the credits, but would crash to $7 billion without them.

According to an AP article, Schott Solar plans to add 1,500 jobs and $500 million in investment are in large part dependent on the ITC. The Solar Energy Industries Association says some 20 utility-scale solar power plants are at risk because of the uncertainty in Congress.

Both Democrats and Republicans say they are in favor of the credits. By themselves, they are not controversial. Like a lot of issues—especially in our industry—good policies get caught up in partisan politics and the legislative meat grinder. The US Congress is so dysfunctional, they would prefer to hold the ITC hostage rather than yield an election advantage to the other side. They are unable move forward on good policies, they are unable to compromise, unable to govern. It’s something we see at SEMI every year, with every administration, for the past twenty years.

This kind of unconscionable legislative inaction is, in my opinion, part of a large crisis in leadership in the US. Every institution that made America great has devolved into self-interested obscurity, unwilling and unable to play a leadership role in society. Look at Wall Street: eight years after the dot com crash we have the mortgage meltdown and liquidity crisis, both events underscored by near universal, institutionalized, greed-fueled larceny. The financial industry sucks the best and brightest from the best universities into what is essentially a ponzi scheme, where fraudulent value is created and passed down a chain. What role is Wall Street playing today in the big questions of the day: deficits, taxes, human capital, industrial policy? They have no collective role. There is no Wall Street. It’s just individual companies with a self interest.

What about the military? Iraq. Afghanistan. Good job there, guys. Now, stay out of politics.

Education? What university president has a prominent voice on the issues of the day? Do teachers unions care about students?

How about the professions? Is the medical establishment really concerned about health care? Are any textbook journalistic practices relevant in big business media?

I’m just old enough to think that 30 years ago there was a prominent leadership class in all these institutions that was civic minded, independent and courageous. That generation could balance that needs of stockholders, employees and society at large. Everyone knew there was a "greater good" that needed nurturing and managing.

Today, I sense there no such balancing going on. It’s all about what's in it for me, my career and my company. That might be good for some of us, some of the time--but it’s horrific for all us, all of the time.

Europa Moves to Dresden in 2009

We are thrilled about Europa's move to Dresden next year. Qimonda, Infineon and AMD, nearly 60 percent of European IC output, is located nearby. In addition, about 80 percent of Germany’s PC cells are made within 150 km of Dresden and the region enjoys a concentration of research institutions, universities and over 1200 equipment and materials companies. We explored movong there last year when we moved to Stuttgart from Munich but they weren't ready. Now we've finally got the agreement .

University Peak

First Time Attendees

For the second year in a row, 27% of SEMICON West visitors were first time attendees. This is an important number for us at SEMI and we work hard to keep it high.

First timers are important because they represent new influences in the buying decisions of traditional SEMICON products and services, and new markets for SEMICON exhibitors. Buying influences in the semiconductor industry are constantly changing because of reorganizations, new engineering staff, and the increase in ‘ad hoc” or temporary buying teams that are assembled to equip a new line or address a specific issue. In its 30+ years, SEMICON has established itself as key milestone in the semiconductor buying cycle in North America and the world. Sustaining that role requires everyone in the buying and specifying process to learn how the event can help with new vendor sourcing, current vendor evaluations and new product investigations.

Another source of new buying influences are fabless companies, packaging and test houses, and system level OEM (HP, Apple, etc.) that increasingly have an impact on equipment and materials buying. This is particularly important with new packaging technologies such as copper wire bonding and TSV, as well as new materials, test, MEMs, inspection and other categories.

In addition to new buying and specifying influences within existing customers, first time attendees also consist of buyers from new and emerging markets. Clearly, PV was a big attraction at this year’s event, attracting thousands of buyer/specifiers from crystalline and thin film based PV cell manufacturers. Other new markets very prevalent at the West was solid state lighting, MEMs companies, fuel cell makers, and bio-chip makers (I’m guessing on that last one).

For SEMI, the challenge is to reach these first time attendees and get them to the show. These folks aren’t usually on our databases and often don’t appear in our extensive 3rd party lists. We have great partnerships and promotional awareness (advertising, email and editorial) through all the major industry magazines, but we spend a lot of time and effort on 3rd tier or fringe publications just to reach these first time attendees. Our awareness among core audiences is nearly 100%, but diminishes as we reach new titles (such as design engineer, software engineer), new markets such as SSL, and up the food chain to system level engineers in consumer electronics, automotive, health and other markets. We need to work and spend more to reach these new titles, job functions and markets and we do.

A critical component in finding and attracting these first time attendees is our exhibitors. They are the ones who are typically first aware of changes in personnel and in the best position to extend an invite. Its another reason why pre-show promotion by exhibitors is so important.

Inquiry Distribution at Trade Shows

Following SEMICON West, I am reminded of one the truths about trade show exhibiting that exhibitors don’t often realize. This truth is especially important in trade shows like SEMICONs-- where the square footage is large, the products are complex and specialized, and the customers are busy. The truth is:

The number of inquiries you generate has little to do with where you’re located on the show floor. Inquiries are primarily a result of your product category, your pre-show promotion, and the booth execution.

This isn’t a theory.

I was recently given a report that illustrated the number of inquiries generated by every booth of the SEMICON West inquiry system. The report showed that inquiries are randomly distributed across each hall. There is no correlation for inquiries from the back of the hall or the front of the hall. There is no correlation for inquiries for cross aisle and corner booths and inline locations. Inquiries are not correlated between islands, inlines and peninsula configurations.

It’s not even evident that inquiries are correlated with the size of booth!

The data from SEMICON West has shown for the past three years that inquiries are a result of good exhibit marketing. Inquiries are primarily correlated with:
• Conducting pre-show direct mail and email with exciting and compelling reasons to visit a booth (see a demo, learn more about new product, enter a sweepstakes)
• Companies that use SMARTBOOTH in combination with attractive directory descriptions that reach visitors with rational and thoughtful reasons to visit
• Companies that have hot new products or technologies (new, new, new is what visitors want)
• Booths that have open, inviting floor plans and/or demos
• Booth that with an exhibit staff that is trained and managed to capture inquiries

Gadi Singer SEMICON West Keynote Conclusion

Here is the conclusion to Gadi Singer's keynote. I think you find other segments of his speech on Youtube.

Brand Marketing in High Technology

I recently met a person who reminded me of many of the common errors and failed strategies I see in high technology marketing. Many of these failures revolve around the interpretation of the word “brand,” and how if managed properly managed, it can possess magical properties.

This person was a very experienced marketer who had just joined a SEMI member company from an ad agency. This person was very impressive--clearly competent and creative, perhaps even charismatic. But he/she had no experience in semiconductor manufacturing and I didn’t sense an affinity for the technology, industry and product issues that would most impact his/her company and career.

Being from an agency, this person knew how to promote and articulate the value of big, impactful and professional marketing communications. They seemed to be one of those agency-type people who can sell ideas--big ideas. They offer a seemingly new way to compete in the marketplace, based on ingenuity, cleverness, some call it marketing. These are the people who are able to get the ear of the CEO and suddenly get a massive budget for a huge campaign, such as TV advertising or massive trade show spend. You don’t see these kinds of folks in semiconductors anymore, but you see them all the time in computers and IT, and they were abundant during the dot com era.

Their arguments and experience--their frame of reference--usually revolves around the idea of brand. Concepts like brand positioning, brand awareness, and brand equity dominate their conversation. These are important and useful concepts but the people I am talking about are able to use these arguments to captivate a boardroom and justify significant new budget. They are often effective in utilizing solid research into customer insights and their campaigns are usually bold, beautiful and expensive.

These aren’t the people, however, who I see become CEOs or survive long at the VP of marketing level. In fact, when I see the step-function increase in marketing spend—the huge product launch or identity campaign-- I almost am certain that someone will lose their job in the 12-24 months.

I have seen it dozens of times. Hot shot joins company with cool marketing resume: maybe Apple or Proctor and Gamble background or from an agency who did wild stuff for someone like Sun, HP or Intel. They are hired because “they know marketing” and have been previously successful and have clear experience in managing a large budget or successful campaign. Together with an agency, they are able to successfully frame the company’s challenges into a brand issue—not product, or price, sales, or technology or even a promotion issues—but a brand issue requiring a new a massive campaign or new corporate identity.

Invariably what happens is the campaign or new identity is launched with great fanfare to great applause. It may even get associated with a successful jump in sales for a quarter or two or three. But at some point the business cycle turns or the competition catches up. Memories of the big campaign or product launch fade. The issues that again dominate the critical business meetings are about features, technologies, cost, and price. Talk about brand fades, the brand magic disappears, the marcom budget gets cut.

What happens to the lead marketer, the hot shot, in this scenario? Sometimes they get blamed for the eventual business turn. Sometimes they leave to pursue a fresh opportunity and a new budget (often with an agency). Sometimes their relationships with the product people and other folks in the business--who resented the new ideas, the big campaign and the access to the CEO—get so strained that they get shown the door.

Rarely do they survive. When they do survive, sometimes they become the “make no waves” cynic, the obstructionist who’s always quick to say “been there, done that” and sucks the life out every meeting they attend.

Believe me. People in high-tech who get their companies to do big campaigns on behalf of a brand just don’t stay long.

I suppose that sometimes they grow and mature, bring new energies to new problems, bring a detailed commitment to optimizing the full marketing mix. But you don’t see those people very much. They don’t talk about brand. They talk about the detailed, complicated stuff that it takes to build and ship a product. These are the people that VPs and CEOs

I don’t why this person I met reminds of those marketers and agency types who are quick to justify investments in concepts as ethereal as brand, but he/she did. I really think great marketers talk and represent their product as complicated, multifaceted, sophisticated, changing things that meet customer needs. Not a brand.

Top Ten Reasons SEMICON West was a Huge Success

During a dismal market environment, verified visitor attendance was up nearly 20% at SEMICON West. What were the reasons? Here's my list.

10. Better website—This was our second year that SEMICON West was supported by a dedicated website. The results were more web visits, more page views, more time spent per page, and more opportunity for attendees to find what they need at the SEMICON West.

9. Better media partnerships—We have expanded our media partnerships to a broader circle of international media companies, expanding our reach in advertising, email and web.

8. Better email marketing—Through best of breed technologies and metric-based management, we are able to target and optimize our email messaging much better than the past.

7. Industry partnerships—We are fortunate to work with great partners such as IMAPS, MEPTEC, Lithography Workshop, Southwest Test, ITRS, FOA, SPIE and others, who are able to offer more and better reasons to attend SEMICON West.

6. Refreshed brand image—This year’s theme--Infinite Possibilities—was supported by a new look and feel and brand execution that emphasized new, new, new.

5. Better segmentation—One of the things we have successfully done is break the show down into separate segments. From program design, to sales, to audience recruitment, we really manage seven events, one for wafer processing, materials, assembly/packaging, test, enabling products (systems and components), emerging technologies, and PV.

4. Systems Integration—New exhibitors like Synopsys and Cadence and programs on DFM significantly increased the number of attendees interested in the design-production-test-flow

3. Intersolar--Solar energy and PV manufacturing is hot right now and Intersolar delivered the key decision makers and conference topics. But don’t think PV was the only reason for the jump in attendance; only 11% of the total verified visitors were interested in solar exclusively.

2. Still the place to be--SEMICON West remains the central place to see the entire industry on display and to meet key suppliers and colleagues. International attendance, including top VIPs from nearly every large foundry and IDM in the world, was up this year.

And the number one reason for the attendance improvement…

1. New products and suppliers--Attendees are in desperate need for new ideas and new suppliers and West was expected to deliver both. The industry is in transition with high k/metal gate designs, productivity needs, packaging innovations, lithography roadmap questions, and many more uncertainties and SEMCION West is a good place for answers. The number of visitors interested in core products such as CVD, PVD, etch and CMP nearly doubled. Visitors come to SW to see our exhibitors’ products, ideas solutions and solutions and this year they really delivered.