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.
Tuesday, June 22, 2010
Monday, June 14, 2010
The Center of Gravity os Changing--PricewaterhouseCoopers
“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.
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.
Friday, May 21, 2010
Intel International Science and Engineering Fair
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.
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.
Thursday, May 20, 2010
Something for Everyone at SEMICON West
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.
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.
Thursday, May 13, 2010
Printed Electronics in Europe
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.
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.
Friday, May 07, 2010
In Loving Tribute To Jean LeMoin
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.
Thursday, April 29, 2010
On The Disappearing High Tech Trade Press
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.
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.
Monday, April 26, 2010
A Level Playing Field in SSL?
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.
Thursday, April 01, 2010
Africa's First Fab
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.
Tuesday, March 30, 2010
Grace Semiconductor Manufacturing: Marketing Trumps Technology?
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.
Monday, March 22, 2010
What the LED Industry Can Learn From Semiconductors
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.
Monday, March 01, 2010
Winner Take All
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.
Tuesday, February 16, 2010
Outboarding is Wrong
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.
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.
Thursday, February 11, 2010
Thursday, February 04, 2010
Tien Wu Enjoys Life in the Jungle
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.
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.
Tuesday, December 22, 2009
After Health Care, Good Luck Energy Policy
Immediately following the Copenhagen climate change summit, former governor of Alaska Sarah Palin effectively used Twitter’s 140-character limit to ridicule climate change legislation:
"Copenhgen=arrogance of man2think we can change nature's ways.MUST b good stewards of God's earth,but arrogant&naive2say man overpwers nature," said Palin to the world.
In a recent Op-ed for the Washington Post, she was more specific:
"The last thing America needs is misguided legislation that will raise taxes and cost jobs – particularly when the push for such legislation rests on agenda-driven science," Palin wrote. "Without trustworthy science and with so much at stake, Americans should be wary about what comes out of this politicized conference. The president should boycott Copenhagen."
I don’t want to enter into ideological debates in any country, with any faction, with any member, on any issue. And, I’m not an expert on current US politics and the legislative process. I care about policy--and these comments by Palin illustrate to me why any meaningful and effective energy policy in the US for the foreseeable future will be impossible.
This isn’t good news for SEMI PV Group members serving the solar industry. It isn’t good news for high-technology companies in Silicon Valley and other areas looking to transition from semiconductors, biotechnology, materials sciences, IT, and a host of other segments into Clean Tech. In my opinion, it isn’t good news for higher education, for job creation, US growth stocks, and US innovation.
I presume that energy policy will follow much of the same course as the recent health care legislation. Republicans will fight any comprehensive bill attempting significant change in fossil fuel demand or government spending on renewable energy. They will do so whether or not they agree that reducing reliance on foreign oil is a good thing, whether they believe climate change is a reality, and whether the possibility that US technology companies can lead the world in emerging Clean Tech markets.
Republicans will fight major energy legislation primarily because the dysfunctional political environment forces them too. Because leaders like Sarah Palin make it impossible for them to support solar power and renewable energy (except biofuels, of course). Tragically, good policy is always the first victim of bad politics.
The fact is there is a global renewable energy industry rapidly developing. Leaders in this industry will invariably come from countries that have developed an aggressive public-private partnership supported by appropriate renewables demand incentives in the local market. It’s no surprise that leaders in wind energy come from Denmark, and leaders in solar power and PV equipment often come from Germany. One can argue from a philosophical perspective on the value of free-markets and limited government, but the reality is that companies from Europe and Asia are getting a head start on an industry that likely will be among the fastest growing, lucrative industries of the next generation. While the rest of world is thoughtfully investing in the future, the US is pouring trillion of dollars into classic 19th century industries like banking, agriculture and war.
For those US companies fortunate enough to have reached scale in the past two years (many taking advantage of European subsidies), congratulations, you probably have a great future ahead of you. For those emerging, transitioning and other US companies who will need to leverage a local market and competitive developmental infrastructure to survive on the global stage, best of luck. Maybe policies in states like California can help close the gap.
Health care reform took nearly 50 years to accomplish—and there were easy benchmarks to follow in every developed country in the world. There are also good benchmarks to follow in renewable energy (see the PV Group position paper on solar power). But effective renewable energy policy--with its guaranteed costs, uncertain outcomes and long-term justifications—seem unlikely to emerge from Congress in the next year.
And by then, well, we’ll see…
"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…
Friday, December 18, 2009
Busy Month for Member Consolidation
Soitec Acquires Concentrix Solar
http://www.soitec.com/en/finance/press-releases-418.php
Meyer Burger to merge with 3S Industries (a turnkey solar equipment maker)
http://www.3-s.com/en/media-center/news/ad-hocs/unique-technology-group-in-the-solar-industry-meyer-burger-and-3s-industries-plan-to-merge-.html
Oerlikon and Meyer Burger announced strategic agreement
http://finance.yahoo.com/news/Oerlikon-Systems-and-Meyer-bw-109363783.html?x=0&.v=1
Meyer Burger purchased Diamond Wire Technology
http://www.meyerburger.ch/en/public-relations/news/newsdetail/meyer-burger-concludes-purchase-contract-for-the-acquisition-of-diamond-wire-technology-llc/8a61e506c4/?tx_ttnews[backPid]=3
Singulus has completed their acquisition of Stangl
http://www.pv-tech.org/news/_a/singulus_acquires_remaining_49_stangl_semiconductor_equipment/
TSMC enters into strategic agreement with Motech
http://www.greentechmedia.com/articles/read/tsmc-wants-a-piece-of-motech/
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/
Wednesday, December 16, 2009
Video Interview on Solar Policy
I recently had an interesting interview with an website called Etopia News on our Solar Policy White Paper that was conducted via webcam over the Internet. The interview was surprisingly easy to conduct and capture. I wish I was more articulate (have to work on that), but I am glad for any opportunity to push our message.
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