Head and the Heart Served at ISS

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

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

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

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

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

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

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

New SEMI YouTube Channel

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

Gen 8 OLED Fabs Coming Soon

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

What is the forecast for OLED technology?

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

Why are OLED displays expected to be popular?

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

Who are the top suppliers?

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

What is SEMI doing to serve the OLED market?

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

2012: Year of SSL Standards

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

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

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

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

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

Robert Galvin, Motorola (1922-2011)

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

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

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

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

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

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

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

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

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

Better Lighting Through Quantum Dots

GlobalFoundires Fab 8 Tour

GlobalFoundries ITDC Fab 8 from HardOCP.com on Vimeo.

Estimates Vary Widely on Long-Term LED Forecast

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

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

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

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

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

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

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

Renesas Earthquake Recovery

Plastic Electronics

LED Substrate Surprises

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

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

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

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

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

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

OLED Lighting Research from Fraunhofer

Solid State Lighting Systems

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

Crisis Management in the Semiconductor Industry

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

It was a big deal; a major corporate initiative.

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

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

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

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

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

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

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

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

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

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

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

Rick Wallace, KLA-Tencor, on the Industry

Q-Cells Rocks

High Tech U Reunion

SEMICON China, FPD China, SOLARCON China 2011

Semiconductor Industry Earthquake Status

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

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

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

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

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

Corning's Beautiful Vision

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