I was pointed out to a piece of news on TV, where a ruling chief minister of an Indian state apparently announced that he could make a particular state of India another Silicon Valley! Interesting!!
First, what’s the secret behind Silicon Valley? Well, I am not even qualified enough to state that! However, all I can say is: it is probably a desire to do something very different, and to make the world a better place – that’s possibly the biggest driver in all the entrepreneurs that have come to and out of Silicon Valley in the USA.
If you looked up Wikipedia, it says that the term Silicon Valley originally referred to the region’s large number of silicon chip innovators and manufacturers, but eventually, came to refer to all high-tech businesses in the area, and is now generally used as a metonym for the American high-technology sector.
So, where exactly is India’s high-tech sector? How many Indian state governments have even tried to foster such a sector? Ok, even if the state governments tried to foster, where are the entrepreneurs? Ok, an even easier one: how many school dropouts from India or even smal-time entrepreneurs have even made a foray into high-tech?
Right, so where are the silicon chip innovators from India? Sorry, I dd not even hear a word that you said? Can you speak out a little louder? It seems there are none! Rather, there has been very little to no development in India, barring the work that is done by the MNCs. Correct?
One friend told me that Bangalore is a place that can be Silicon Valley. Really? How?? With the presence of MNCs, he said! Well, Silicon Valley in the US does not have MNCs from other countries, are there? Let’s see! Some companies with bases in Silicon Valley, listed on Wikipedia, include Adobe, AMD, Apple, Applied Materials, Cisco, Facebook, Google, HP, Intel, Juniper, KLA-Tencor, LSI, Marvell, Maxim, Nvidia, SanDisk, Xilinx, etc.
Now, most of these firms have setups in Bangalore, but isn’t that part of the companies’ expansion plans? Also, I have emails and requests from a whole lot of youngsters asking me: ‘Sir, please advice me which company should I join?’ Very, very few have asked me: ‘Sir, I have this idea. Is it worth exploring?’
Let’s face the truth. We, as a nation, so far, have not been one to take up challenges and do something new. The ones who do, or are inclined to do so, are working in one of the many MNCs – either in India or overseas.
So, how many budding entrepreneurs are there in India, who are willing to take the risk and plunge into serious R&D?
It really takes a lot to even conceive a Silicon Valley. It takes people of great vision to build something of a Silicon Valley, and not the presence of MNCs.
Just look at Hsinchu, in Taiwan, or even Shenzhen, in China. Specifically, look up Shenzhen Hi-Tech Industrial Park and the Hsinchu Science Park to get some ideas.
I was watching US president Barack Obama deliver the state of the union address. There was lot of positiveness. First, he urged the Congress to get together and pursue a bipartisan, market-based solution to climate change. He called for the nation to embrace the need for modest reforms in medical healthcare.
The USA’s first priority is making America a magnet for new jobs and manufacturing. After shedding jobs for more than 10 years, the US manufacturers have added about 500,000 jobs over the past three years. Caterpillar is bringing jobs back from Japan. Ford is bringing jobs back from Mexico. And this year, Apple will start making Macs in America again. That should great news for the Americans!
Following the first manufacturing innovation institute in Youngstown, Ohio, Obama announced the launch of three more manufacturing hubs, where businesses will partner with the Department of Defense and Energy to turn regions into global centers of high-tech jobs. He asked the Congress to help create a network of 15 hubs and guarantee that the next revolution in manufacturing is made in America.
America, he said, was poised to control its energy future. The US has doubled the amount of renewable energy generated from sources like wind and solar — with tens of thousands of good American jobs to show for it. He urged the Congress to pursue a bipartisan, market-based solution to climate change.
Four years ago, other countries dominated the clean energy market and the jobs. Last year, wind energy added nearly half of all new power capacity in America. He called to generate even more. Solar energy gets cheaper by the year — there’s a need to drive down costs even further! He urged the US to keep going all in on clean energy, like China. Obama added that those states with the best ideas to create jobs and lower energy bills by constructing more efficient buildings will receive federal support to help make that happen.
The initiatives in manufacturing, energy, infrastructure, housing — will help entrepreneurs and small business owners expand and create new jobs. However, none of it will matter unless the US equips citizens with the skills and training to fill those jobs. That has to start as early as possible, he urged!
Obama has signed a new executive order that will strengthen USA’s cyber defenses by increasing information sharing, and developing standards to protect national security, jobs, and privacy. He called upon the Congress to pass legislation that would give the government a greater capacity to secure USA’s networks and deter attacks.
As Obama said during his speech, “The greatest nation on Earth cannot keep conducting its business by drifting from one manufactured crisis to the next!” Can India, at least, learn?
Finlay Colville, vice president, NPD Solarbuzz, USA, recently presented the 10 key trends for the PV industry. According to him, the 10 key trends are:
1. PV demand growth. The industry has been characterized by strong growth rates of 25 percent to >100 percent Y/Y for the past decade. Now, the industry needs to plan for growth at more modest levels.
2. Globalization of PV demand. The emerging regions emerged for PV demand in 2012.
3. China end-market demand in 2013. China is forecast to account for approximately 25 percent global demand in 2013. The emerging demand is confined to a select group of countries across the three emerging regions.
4. Capacity imbalance reset. The nameplate capacity levels at the 60-GW level are often cited. However, the the PV industry currently has an ‘effective’ capacity of 41-42 GW. Therefore, demand needs to exceed 40 GW for proper reset.
5. Competitive shakeout. The top-10 module suppliers by MW for 2012 only comprised 50 percent of the year shipments. Also, a similar pattern is seen for c-Si cell production. We can expect another two years of shakeout on the supply side.
6. Cost and price rationalization. Every segment of the supply side is subject to price/cost pressure: from poly to BoS supply. Even reducing the silicon/nonsilicon costs of modules to 53c/W level by the end of 2013 may still result in negative gross margins.
7. Supply and demand rationalization. The poly suppliers have been operating at reduced utilization since 2H’12.
8. Evolution of PV technology roadmaps. Strong marketshare gains from standard c-Si multi ingot/wafers. The end-markets are driving module efficiencies and power ratings. The alternative growth methods have not gained traction and are being phased out.
9. Capital expenditure cyclic patterns. The PV process equipment suppliers have been impacted severely by overcapacity and overinvestments of 2010 and 2011. There is a strong chance that 2014 will end up as low as 2013. Also, technology-buy cycles don’t exist as yet in the PV industry.
10. Domestic protectionism counter measures. The effects of trade wars may yet have a profound effect on the PV industry into 2014. There will be direct effect of global overinvestment into domestic manufacturing. The other countries have an impact, but China and Europe decisions are key.
In summary, the PV industry is a 30-GW end-market today, and is forecast to grow to the 40-GW level in 2015. Europe demand is declining, but greater number of countries/territories expected to provide new PV demand. Demand in China during 2013 is essential for local suppliers.
The PV industry is capable of producing 12-15 GW per quarter. Supply and demand need a 40-GW+ market to balance. The shakeout phase is proceeding slowly, and will continue for the next two years. Reducing costs are not yet keeping up with price declines. ASP and ISP stabilization period is needed badly.
The end-market demand has become dependent on low ISPs. Also, multi c-Si based modules are dominating the industry. PV equipment suppliers are unlikely to see meaningful new order intake until 2014 or beyond. Finally, trade wars and domestic protectionism measures are crucially dependent on the EU and China decisions in 2013.
Last week, I was alerted to a news on a local daily, which simply read: Government invites EoI for semiconductor fabs! With all due respect, what is the need for an Expression of Interest (EoI) in the first place? At least, I fail to understand!!
Having spent most of my life in Hong Kong, Taiwan and China, I’ve seen plenty of fabs come up in the past decade, and before. Why? In the 1990s, no one used to even give a second look at Taiwan Semiconductor Manufacturing Co. (TSMC), which [I don’t know if many are aware] started operations in 1987.
Back in the mid- to late-1990s, I had the pleasure of attending several trade shows at the Taipei World Trade Center (TWTC), Taiwan. In fact, I tracked the rise of the Taiwanese and Chinese companies in telecoms and semiconductors. Back then, no one even noticed TSMC, as well as the Chinese backed Semiconductor Manufacturing International Corp. (SMIC). However, the art of manufacturing, which had found its bearings in Taiwan, were steadily shifting to China. I even remember visiting Huawei in the middle of 2000, and later ZTE.
By 2000, many of the Taiwanese firms had moved their operations to China for managing cheaper labor costs. Today, China has assumed gigantic proportions, hasn’t it? Today, even TSMC is in the list of top 10 global semiconductor companies. I had even written a post congratulating TSMC for making it to the top 10 R&D spenders during 2010.
What exactly does this EoI from the government of India set out to achieve? Well, for starters, the EoI should come from the technology companies on whether they are interested to start a fab in India. By the way, do you know what happened to the SIPS or the Indian semiconductor policy announced in 2007? It sank without a trace! A Karnataka Semicon Policy was unveiled with great fanfare last year. The result? No takers!! Read more…
I received a report from IHS iSuppli, which stated that China’s fabless market is likely to double by 2015! Well done, China, and all kudos.
According to the report, there are 3Cs – China, Consumer and Convergence — that China has been focusing on. However, there are three more Cs — Culture, Content and Contribution — that the report urges China to focus on.
The report states: “The companies must accommodate and adjust to the differing cultures of overseas customers. They must learn more about end-content sectors that drive the growth of technology markets. And China’s fabless firms must take advantage of government contributions to the industry, given that Beijing has instituted a range of policies designed to improve the fabless industry in areas including investments, tax rates and capital investments.”
Having taken its own sweet time, the Chinese fabless industry is coming up well, and fast! However, what is the state of the fabless market in India?
If one goes back to Dec. 2009, Pravin Desale, VP and MD India operations, LSI Corp., while speaking at Mentor Graphics’ U2U conference, had said that India has only two (2) fabless firms. If this number, or even a number below double digit is considered to be correct, then India surely has a lot of catching up to do!
Now, who are the leaders in the fabless semiconductor business globally? That’s Qualcomm, Broadcom, even AMD (as per 2010 reports), MediaTek and Marvell. Four of these companies are based in the USA, leaving MediaTek as the only Asian (Taiwan) representative.
Do Indian companies have the necessary experience of designing complete chips from scratch? Perhaps, some may have. Can the Indian companies get the silicon manufactured easily (local manufacturing) and later, debugging it? Here comes the first major gray area! Do the Indian companies have easy access to tools? Perhaps, some, most of them, have that access today!
Now, guess what? The last para — I had written about 7 years ago! ;)
“During the first three quarters of 2010, foundries were under intense pressure to meet customer demand,” said Len Jelinek, director and chief analyst for semiconductor manufacturing at iSuppli. “The pressure is leading to increased revenue, as consumer spending has come back with a vengeance following a dramatic downturn in the fourth quarter of 2008 and for all of 2009.”
By 2014, total pure-play foundry revenue will reach $45.9 billion, managing a CAGR of 9.4 percent from $26.8 billion in 2008. Pure-play foundries are contract manufacturers whose business consists of producing semiconductors on behalf of other chip companies.
Enhancing foundry forecast
I started by asking Jelinek what were the chief reasons for enhancing the foundry forecast. Jelinek said: “The forecast increase is based on the anticipated strength in demand for products in Q2 and beyond. Additionally, it is also simple math. The foundry market had a good Q2, and last year, Q1 and Q2 were quite challenging. So, by having a good first half of the year, the percentage must increase.”
Also, given that there has been renewed demand for consumer electronics products, what are the specific CE products, besides netbooks, mobile phones, that have been seeing renewed demand, and why?