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Applied Materials CEO on semicon sustainability and energy management

November 2, 2007

“The Indian semiconductor policy is really ground breaking. Hopefully, it will build great business.” These comments from Michael R. Splinter, president and CEO, Applied Materials, were enough to indicate how much the Indian semiconductor policy, announced recently by the government of India, has caught the attention of global semicon majors.

Mike Splinter was delivering his lecture at the Thought Leader Series organized by the India Semiconductor Association (ISA), where he also highlighted the needs of sustainability and energy management from a global perspective.

According to him, some things never changed in the semiconductor industry, such as: technical innovation being the most viable lever for productivity, end of optical lithography being imminent, no imminent change in fab economics ($/die), growth in complexities of products and applications.

“Through all of these times, the Moore’s Law has persisted. The complexity of products have increased,” he added. Another thing that hadn’t changed was the growing need for sustainable practices.

Citing statistics, he said that the semiconductor industry was growing 5 percent this year, while the semiconductor equipment industry was growing at 3-5 percent during 2007. “Memory continues to grow very rapidly. NAND flash is a killer app,” Splinter noted.

India, according to him, has a major role to play in the semiconductor domain. India’s strengths lie in world class IC design and R&D capability, growing market for consumer electronics (CE), and an increasing need to address both global and industry challenges — in terms of sustainability and energy use.

Challenge of sustainability
Touching on the growing importance of sustainability, Splinter cited The Economist, which reported that $70bn had been spent globally in clean tech research and funding. Further, the IPCC reported that the evidence of human caused global warming was equivocal.

While economic growth was driving demand and the BRIC (Brazil, Russia, India and China) countries were accelerating it, there was also an increasing use of chips in consumer electronics products. This translated into an increasing use of energy. “All of these factors, together, make sustainability even more challenging,” added Splinter.

Splinter gave an example of LCD TVs, which are likely to grow 65 percent this year. Now, 90 percent of the power in LCD TVs goes into the backlight. If new technologies could be developed, those would certainly assist in saving more power. Another example was that of servers, laptops and TVs together accounting for 8 percent of global power consumption. That’s a lot of power, if the global power is estimated at 5TW or so. It needs to be reduced as well.

So what is the waste and energy impact of consumer electronics? For starters, there are increasing energy consumption and recycling challenges. Next, manufacturing requires a lot of water, energy and materials. Another impact is the waste management within the manufacturing value chain. Splinter said, “The environmental impact can be reduced by clean tech products and sustainable manufacturing.”

Need for energy efficient chips
Energy definitely needs to grow faster than the global economy. There is also a need to think about the environment and waste management. There is a need to increase the energy efficiency in chips, instead of solely focusing on performance.

Splinter said the time had come to take major steps, such as producing energy efficient chips. Applied Materials itself will be working on reducing the energy consumption in all of its practices. The semiconductor equipment maker will also be adopting clean energy in all of its facilities. The time has come for all to work together on energy use, Splinter added.

On solar, he noted that it had not yet managed to achieve scale. However, Germany had strongly pushed it, providing manufacturing incentives. “The scales are now starting to happen in Europe, especially, Germany,” he added. “There is pretty good motivation and incentive to deploy solar here, in India, as well.”

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