Mobile has emerged as the biggest platform in the history of mankind. Today, the Qualcomm Snapdragon platform is much more than a phone, according to Dr. Sandeep Sibal, country manager and VP – Business Development, Qualcomm India & South Asia.
For instance, there are 40 million mobile Internet users in India. There is a strong demand for data from tier 2 and 3 cities. There are said to be 28 million Facebook users, of which, 30 percent are mobile. About 20 photos uploaded every second, and mobile users are 2x times more active.
Qualcomm boasts of an unparallelled system integration, as having the best-in-class assets is now a key advantage. The benefits of integration include lower system costs, less engineering and faster time to market — over 745 devices launched in fiscal 2010, smaller footprint — about 10-20 percent smaller, and power efficiency — up to 35 percent better.
As for the roadmap breadth and execution, already, over a 100+ commercial devices have been announced that use Snapdragon. There are said to be 200+ more in design, and 30 companies with tablet designs are deemed underway. Snapdragon currently powers eight tablet models.
Snapdragon processors — what’s coming!
Snapdragon QSD 8×50 is the world’s first mobile processor at 1GHz. It features the Scorpion Core, Adreno 200 GPU, 3G connectivity and 720p HD video capture and playback. Snapdragon MSM 8×55 is said to be the world’s first mobile single core at 1.4GHz. It features a single Scorpion CPU 1.4GHz, Adreno 205 GPU, 1024×768/720p/Dolby 5.1, stereoscopic 3D capture and playback, app proc only available, and supports a comprehensive range of 3G.
The Snapdragon asynchronous dual and quad core family consists of the Snapdragon MSM 8×60. It features dual Scorpion CPU of 1.5GHz each, asynchronous cores, Adreno 220 GPU, HD 1080p capture and playback, Dolby 5.1, stereoscopic 3D capture and playback, and a comprehensive range of 3G. Read more…
This is a summary by Malcolm Penn, CEO, Future Horizons. For those who wish to know more, please get in touch with me.
November’s WSTS results were distorted by a billion dollar downgrade (restatement) to the year-to-date numbers. These things do happen from time to time, but one of this size quite rare.
The overall impact was to reduce the year to date market by around half a percent; not so bad per se but, due to its leverage, it reduced the overall year-on-year market growth by a couple of percentage points!
As a result we have downgraded our 2010 forecast to (a still very reasonable) 30 percent. This falls into the category of ‘tweaking the final number’ though … it is not a change to our underlying forecast sentiment or outlook.
Re-statements aside, what then for the outlook for 2011?
Looking at our four horsemen of the semiconductor apocalypse:
1. Economy – grew ~4.8 percent in 2010 (IMF) and is forecast to grow 4.2 percent in 2011.
2. Capacity – effectively sold out; with Cap Ex spending now flat and the book-to-bill below parity.
3. ASPs – have been increasing now since Q2-2009 … six quarters in a row.
4. IC units – are in a ‘steady as you go’ mode with NO excess inventory and NO excess capacity to build any.
In short, whereas this time last year the problem was getting any orders, the problem today is getting semiconductor product. The chip market fundamentals really do not get any better than this, yet industry pessimism it at its highest since the Lehman Brothers collapse.
What concerns us is the industry perception that moving from a 30 percent growth year to single digits in 2011 heralds yet another classic chip market boom turned to bust. It does not.
The same is true everywhere you now look in the food chain … few people or firms will commit anything to any one beyond the immediate deal; business is now turn’s driven, not for strategic long-term vision or gain.
The current Mexican standoff in the 450mm wafer transition debacle is another industry supply chain mismanagement example, with the chip industry saying ‘yes please’ and the equipment suppliers saying ‘no thanks’. Yet where is the SIA and SEMI in this debate? Siding with their members rather than orchestrating a solution.
Likewise, who in the infrastructure is counting and measuring real industry demand? The WSTS in its (lack of) wisdom stopped publishing orders, and the associated book-to bill, data several years ago, despite the latter being one of the key original measurement tools when the system was created under the directionof data visionary Jack Beadle (then with Motorola).
Needless to say it was dropped for all the wrong reasons … to try to keep the financial community offindustry’s backs. As a result, the industry now has no structured order visibility!
Entering 2011 we thus see the industry fundamentals in especially good shape, a fact that can clearly be seen if you redraw the graphs to take out the ‘data crash’ caused by the Lehman Brothers collapse.
* Continuing Cap Ex famine, despite 2010’s 140 percent Cap Ex spending growth.
* Falling Cap Ex book to bill (since August 2010) now less than 1 (December).
* Six successive quarters of flat industry capacity, cruising well below excess capacity threshold levels.
* Supply-chain mismanagement; no trust, no confidence, no commitment … no business?
* Shortages everywhere … from substrates (e.g. 200mm wafers), equipment (try buying an immersion stepper or single wafer epi reactor), to lead frames (especially given the desire to move from gold to copper-based packaging).
* Industrial and automotive products now completely sold out … even memories are starting to get tight.
Do not be misled by the single digit growth number … 2011 will be a very strong year for the chip industry. 2012 will be a double-digit boom.
I had interacted with Dr. Ajoy Bose, CEO of Atrenta, some months ago. It was a pleasure to meet up with Piyush Sancheti, VP of Marketing recently. First, I asked him about the outlook for EDA in 2014.
Outlook for EDA
Piyush Sancheti said: “EDA does not look that attractive from growth point. However, you cannot do SoC designs without EDA. Right now, EDA’s focus is on implementation. The re-use of IP has been doing the rounds for many years. Drivers for SoCs are mobile and Internet of Things. The design cycle for those markets are very short – about three months. EDA business is shifting to IP re-use. The focus is now toward design aggregation.
“We will have done roughly 66 percent of business – net new — on existing customers. There is an industry shift toward doing more on the front end. EDA growth will come from IP-SoC involvement.
“Sub-20nm has challenges. ST says FT-SoI is the way to go. Complexity of process plays a big role, and the amount of chips you put in will also increase. In 14/16nm, we have an investment going on in 3D design. We are extending our 2D tool into 3D tool. We are also investing in the IP qualification. We have standardized a set of design rules in RTL. There are about 30 companies in the TSMC ecosystem.
“Our main focus is IP enablement. SoC acceptance is another key aspect. Our company focus is IP-enablement for SoCs. IP qualification ensures that it meets guidelines. Second, acceptance and making sure all IPs fit in the blocks. Third, integration. We already have this technology and it is driving the business.”
What’s Atrenta’s take on 3D design? Sancheti replied: “The industry has been slow as 3D designs are not yet to a point of business success. Focus on monolithic 3D-ICs will be a paradigm shift for the semicon industry. For mainstream commercial design, 20nm is still mainstream, but 14/16nm does not look mainstream, as of now. Process node is not necessarily a driver of innovation. EDA as an industry will remain in single digit growth.”
How will EDA move into the embedded software space?
Sancheti said: “We’ve looked into that market. But, the price point is significantly lower. Over time, it could be a strategic area for us. Over time, embedded software development and chip design will co-mingle.”
ESL is where the future of EDA lies. Still true? He added that the future of EDA is going up. It has to head toward integration of embedded software and chip development. However, ESL is not the only viable option.
Atrenta has 220 people in India, about 10 people in Bangalore and 200 in Noida. Sushil Gupta runs the India operations. It has tie-ups with IIT Delhi and IIT Kharagpur as well. Atrenta sees lot of scope for work with the Indian start-ups.
The year 2014 is expected to be a major year for the global semiconductor industry. The industry will and continue to innovate!
Apparently, there are huge expectations from certain segments such as the so-called Internet of Things (IoT) and wearable electronics. There will likely be focus on the connected car. Executives have been stating there could be third parties writing apps that can help cars. Intel expects that technology will be inspiring optimism for healthcare in future. As per a survey, 57 percent of people believe traditional hospitals will be obsolete in the future.
Some other entries from 2013 include Qualcomm, who introduced the Snapdragon 410 chipset with integrated 4G LTE world mode for high-volume smartphones. STMicroelectronics joined ARM mbed project that will enable developers to create smart products with ARM-based industry-leading STM32 microcontrollers and accelerate the Internet of Things.
A look at the industry itself is interesting! The World Semiconductor Trade Statistics Inc. (WSTS) is forecasting the global semiconductor market to be $304 billion in 2013, up 4.4 percent from 2012. The market is expected to recover throughout 2013, driven mainly by double digit growth of Memory product category. By region, all regions except Japan will grow from 2012. Japan market is forecasted to decline from 2012 in US dollar basis due to steep Japanese Yen depreciation compared to 2012.
WSTS estimates that the worldwide semiconductor market is predicted to grow further in 2014 and 2015. According to WSTS, the global semiconductor market is forecasted to be up 4.1 percent to $317 billion in 2014, surpassing historical high of $300 billion registered in 2011. For 2015, it is forecasted to be $328 billion, up 3.4 percent.
All product categories and regions are forecasted to grow positively in each year, with the assumption of macro economy recovery throughout the forecast period. By end market, wireless and automotive are expected to grow faster than total market, while consumer and computer are assumed to remain stagnant.
Now, all of this remains to be seen!
Earlier, while speaking with Dr. Wally Rhines of Mentor, and Jaswinder Ahuja of Cadence, both emphasized the industry’s move to 14/16nm. Xilinx estimates that 28nm will have a very long life. It also shipped the 20nm device in early Nov. 2013.
In a 2013 survey, carried out by KPMG, applications markets identified as most important by at least 55 percent of the respondents were: Mobile technology – 69 percent; Consumer – 66 percent; Computing – 63 percent; Alternative/Renewal Energy – 63 percent; Industrial – 62 percent; Automotive – 60 percent; Medical – 55 percent; Wireline Communications – 55 percent.
Do understand that there is always a line between hope and forecasts, and what the end result actually turns out to be! In the meantime, all of us continue to live with the hope that the global semiconductor will carry on flourishing in the years to come. As Brian Fuller, Cadence, says, ‘the future’s in our hands; let’s not blow it!’
Its been warm and sunny in Dubai, UAE, host to the Gitex Technology Week 2013, at the Dubai World Trade Center. Opening today, the show is literally the live wire for the Middle East technology roadmap.
Well, it seems that this show is all about the Big Data and cloud. On Oct. 21st, there is the Cloud Confex, where enterprises can learn how they can achieve the benefits of transformation. Are the CIOs and the businesses really prepared for Big Data? You can find that out by attending the session on Big Data on Oct. 22nd. There is the digital strategies day as well, on Oct. 23rd, where enterprises can find out more about how to integrate mobile and social media into their business models. This session should help you understand what customers or users do online, and more importantly, why they do that!
There are said to be 1,500 or so exhibitors at Gitex 2013. My attention was drawn to the gsmExchange, said to be the global trading platform for mobile phone wholesale since 2000. You can buy or sell mobiles phones as well as refurbished mobile phones at this portal. You can also buy and sell mobile phone accessories as well. Kaspersky Lab has a large booth, catering to the Internet security and mobile security products. Cisco is showcasing its intelligent network products portfolio.
Elsewhere, there’s news about Datawind, and its low-cost phablet for the Indian market at Rs. 6,999 (taxes extra). Cyberoam is showcasing the next generation firewall (NGFW) and its enterprise security offerings. TP-LINK has launched its flagship 802.11ac wireless router, which is providing up to 1750Mbps of wireless bandwidth and set to change the way we look at home networking.
Olivetti is presenting innovative solutions and products whose features will be of particular interest to banks and post offices, such as the revolutionary MB-2 ADF, an all-in-one product for bank front offices that combines specialised printer functions with those of an A4 scanner, a cheque reader and allows the automatic multi-page documents feed thanks to the ADF. It is also displaying the Oliscan A600, a duplex colour scanner, the M206 and M210 multiservice terminals, and so on.
I saw a booth from Dubai Silicon Oasis Authority (DSOA), which is showcasing the park’s hi-tech ecosystem. Five years ago, when I was in Dubai, the director had informed me that the DSOA was large enough to fit in eight wafer fabs! Where are those fabs, dear sirs? Does it seem that the focus has shifted from fabs to providing incentives and state-of-the-art infrastructure to technology companies looking to set up shop in Dubai? We will try and find out, time permitting.
There is a strong presence of the local government, with large booths showcasing their wares. The Dubai Smart Government has introduced several new applications, such as the mobile gateway app – mDubai, mPay app, HR self-service app, MyID and iProc mobile app, and the suggestions and complaints app. Great work!
There are large booths mostly, especially from Etisalat, the Middle East’s leading telecommunications operator and one of the largest corporations in the six Arab countries of the Gulf Co-operation Council, Intel, which is showcasing its enterprise solutions, and Huawei, which is targeting the data centers, as well as enterprises.
There will be more updates tomorrow, as I’ve to rush for a meeting.
Future Horizons hosted the 22nd Annual International Electronics Forum, in association with IDA Ireland, on Oct. 2-4, 2013, at Dublin, Blanchardstown, Ireland. The forum was titled ‘New Markets and Opportunities in the Sub-20nm Era: Business as Usual OR It’s Different This Time.” Here are excerpts from some of the sessions. Those desirous of finding out much more should contact Malcolm Penn, CEO, Future Horizons.
The global interest in graphene research has facilitated our understanding of this rather unique material. However, the transition from the laboratory to factory has hit some challenging obstacles. In this talk I will review the current state of graphene research, focusing on the techniques which allow large scale production.
I will then discuss various aspects of our research which is based on more complex structures beyond graphene. Firstly, hexagonal boron nitride can be used as a thin dielectric material where electrons can tunnel through. Secondly, graphene-boron nitride stacks can be used as tunnelling transistor devices with promising characteristics. The same devices show interesting physics, for example, negative differential conductivity can be found at higher biases. Finally, graphene stacked with thin semiconducting layers which show promising results in photodetection.
I will conclude by speculating the fields where graphene may realistically find applications and discuss the role of the National Graphene Institute in commercializing graphene.
The key challenge for future high-end computing chips is energy efficiency in addition to traditional challenges such as yield/cost, static power, data transfer. In 2020, in order to maintain at an acceptable level the overall power consumption of all the computing systems, a gain in term of power efficiency of 1000 will be required.
To reach this objective, we need to work not only at process and technology level, but to propose disruptive multi-processor SoC architecture and to make some major evolutions on software and on the development of
applications. Some key semiconductor technologies will definitely play a key role such as: low power CMOS technologies, 3D stacking, silicon photonics and embedded non-volatile memory.
To reach this goal, the involvement of semiconductor industries will be necessary and a new ecosystem has to be put in place for establishing stronger partnerships between the semiconductor industry (IDM, foundry), IP provider, EDA provider, design house, systems and software industries.
This presentation looks at the development of the semiconductor and electronics industries from an African perspective, both globally and in Africa. Understanding the challenges that are associated with the wide scale adoption of new electronics in the African continent.
Electronics have taken over the world, and it is unthinkable in today’s modern life to operate without utilising some form of electronics on a daily basis. Similarly, in Africa the development and adoption of electronics and utilisation of semiconductors have grown exponentially. This growth on the African continent was due to the rapid uptake of mobile communications. However, this has placed in stark relief the challenges facing increased adoption of electronics in Africa, namely power consumption.
This background is central to the thesis that the industry needs to look at addressing the twin challenges of low powered and low cost devices. In Africa there are limits to the ability to frequently and consistently charge or keep electronics connected to a reliable electricity grid. Therefore, the current advances in electronics has resulted in the power industry being the biggest beneficiary of the growth in the adoption of electronics.
What needs to be done is for the industry to support and foster research on this subject in Africa, working as a global community. The challenge is creating electronics that meet these cost and power challenges. Importantly, the solution needs to be driven by the semiconductor industry not the power industry. Focus is to be placed on operating in an off-grid environment and building sustainable solutions to the continued challenge of the absence of reliable and available power.
It is my contention that Africa, as it has done with the mobile communications industry and adoption of LED lighting, will leapfrog in terms of developing and adopting low powered and cost effective electronics.
Personalized, preventive, predictive and participatory healthcare is on the horizon. Many nano-electronics research groups have entered the quest for more efficient health care in their mission statement. Electronic systems are proposed to assist in ambulatory monitoring of socalled ‘markers’ for wellness and health.
New life science tools deliver the prospect of personal diagnostics and therapy in e.g., the cardiac, neurological and oncology field. Early diagnose, detailed and fast screening technology and companioning devices to deliver the evidence of therapy effectiveness could indeed stir a – desperately needed – healthcare revolution. This talk addresses the exciting trends in ‘PPPP’ health care and relates them to an innovation roadmap in process technology, electronic circuits and system concepts.
Some time ago, Cadence Design Systems Inc. had announced the EDA360 vision! As per Jaswinder Ahuja, corporate VP and MD of Cadence Design Systems India, the Cadence vision of EDA360 is said to be well and alive. The organization has been aligned around the EDA360 vision.
The EDA360 is a five-year vision for defining the trends in the EDA industry, based on what Cadence is observing in the industry and the direction in which, it feels, the industry will go.
At Cadence, the Silicon Realization Group is headed by Dr. Chi-ping Hsu. The SoC Realization Group is headed by Martin Lund, and Nimish Modi is looking after the System Realization Group. Cadence’s focus has been on in-house development and innovation. Tempus has been a major announcement from the Silicon Realization Group.
What’s going on with EDA360?
There has been a renewed thrust in the SoC Realization Group at Cadence. Already, there have been three acquisitions this year — Cosmic Circuits, Tensilica and Evatronix. Cadence is buying the IP part of the business from Evatronix. This acquisition is ongoing and will be announced in June 2013.
On the relationship between the electronics and the EDA industries, Ahuja said the electronics industry is going through a transition, and that the EDA industry needs to change. The importance of system-level design has increased. Companies are currently focusing on optimizing the end user experience.
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?
How will the global semiconductor industry perform in 2013? After a contrasting spell of predictions for 2012, I see no change in 2013! So, what’s the answer to the million-dollar question posed as my headline? 🙂
After a disappointing and challenging 2012, global semiconductor executives believe that the worst is nearly behind them, and they are making investments to position their companies for a sustained, broad-based, multi-year recovery in 2013, as per a KPMG global semiconductor survey.
On Feb. 3, the Semiconductor Industry Association (SIA) announced that worldwide semiconductor sales for 2012 reached $291.6 billion, the industry’s third-highest yearly total, ever but a decrease of 2.7 percent from the record total of $299.5 billion set in 2011. Total sales for the year narrowly beat expectations from the World Semiconductor Trade Statistics (WSTS) organization’s industry forecast.
The World Semiconductor Trade Statistics (WSTS) estimated that the global semiconductor market in 2012 will be $290 billion, down 3.2 percent from 2011, followed by a recovery of positive 4.5 percent growth to $303 billion in 2013.
The worldwide semiconductor revenue is projected to total $311 billion in 2013, a 4.5 percent increase from 2012 revenue, according to Gartner Inc. The worldwide semiconductor revenue totaled $298 billion in 2012, a 3 percent decline from 2011 revenue of $307 billion, according to preliminary results by Gartner.
The outlook for the global semiconductor industry in 2013 will likely be 7.9 percent, according to Future Horizons. It means, the industry will likely grow to $315.4 billion in 2013. The Cowan LRA foreasting model put out the following sales and year-on-year sales growth numbers for 2012 and 2013: $292.992 billion (-2.2 percent) and $309.244 billion (+5.5 percent), respectively.
Databeans expects 2013 will see a rebound, with the semiconductor industry growing by 7 percent from 2012 totals to reach $313.04 billion. IDC forecasted that the worldwide semiconductor revenues will grow 4.9 percent and reach $319 billion in 2013.
IHS iSuppli claimed that the semiconductor silicon revenue will close 2012 at $303 billion, down 2.3 percent from $310 billion in 2011. The projected decline comes in contrast to the 1.3 percent gain made last year.
IC Insights forecasted 6 percent IC unit growth for 2013 based on expectations of global GDP to rise to 3.2 percent. According to IC
Insights, in 2017, China is expected to represent 38 percent of the worldwide IC market, up from 23 percent, 10 years earlier in 2007. Does this mean the USA and Europe are loosing their sheen?
The global semiconductor industry may record only 1.5 percent growth In 2013, as per The Infornation Network. There is, however, the possibility for a snap-back in revenues for 2013, irrespective of macroeconomic factors, such as what occurred in 2010.
Over the next three years, industry analysts estimate the global industry will grow approximately 6 percent 2013-2016 CAGR, according to Somshubro Pal Choudhury, managing director, Analog Devices India Pvt. Ltd.
Late 2012, I was speaking with Dr. Wally Rhines, chairman and CEO, Mentor Graphics. He said: “After almost no growth in 2012, most of the analysts are expecting improvement in semiconductor market growth in the coming year. Currently, the analyst forecasts for the semiconductor industry in 2013 range from 4.2 percent on the low side to 16.6 percent on the high side, with most firms coming in between 6 percent and 10 percent. The average of forecasts among the major semiconductor analyst firms is approximately 8.2 percent.”
WSTS also anticipates the world market to grow 5.2 percent to $319 billion in 2014, with healthy mid single digit growth across most of geographical regions and semiconductor product categories, supported by the healthier economy of the world.
Lastly, Forbes said that 2013 will be a turning point for the global semiconductor market.
It always gives me great pleasure chatting with Dr. Walden (Wallly) C. Rhines, chairman and CEO, of Mentor Graphics, and vice chairman of the EDA Consortium, USA. 2013 is just round the corner. What lies ahead for the global semiconductor industry is a question on everyone’s lips! How will the EDA industry do next year? For that matter, what should the Indian semiconductor industry look forward to next year?
Three trends for 2013
First, I asked Dr. Wally Rhines regarding the trends in the global semiconductor industry. He cited:
* Growth in communication ICs.
* Growth in the third dimension.
* Accelerated design activity at the leading edge.
Growth in communication ICs: On the macro level, silicon area shipments continue to grow gradually, as do semiconductor unit shipments. However, there’s a major shift in application segments from computing to communications. Communications used to be only one third the size of computing in terms of semiconductor usage.
Communications are expected to surpass computing in terms of semiconductor consumption by 2014 thanks to the rapid growth of wireless applications, the incorporation of computing into communications devices like smart phones and the addition of communications to computing devices like tablet computers.
Growth in the third dimension: Shrinking feature sizes and growing wafer diameters will continue to contribute to the annual 30 percent decrease in the average cost per transistor and average 72 percent unit growth of transistors, but they will do so at a diminished rate. Fortunately, other avenues are emerging that can help sustain the semiconductor industry’s remarkable rate of growth. One largely untapped opportunity is in the third dimension, i.e. growing vertically instead of shrinking in the XY plane.
DRAM stacks of eight or more die are already possible, although they are still more expensive on a cost per bit basis compared to unstacked devices. Complex packaged systems made up of multiple heterogeneous die, memory stacked on logic and interposers to connect the die are evolving rapidly. Layers in the IC manufacturing process continue to increase as well.
Accelerated design activity at the leading edge: Another interesting trend is the recent surge in capital spending among foundries to add capacity at the leading edge. This wave of spending will result in excess capacity, at least initially, which may force foundries to lower prices to boost demand. In fact, capacity utilization data in the last few months shows a dramatic decline in utilization at 28/32nm and 22nm nodes, suggesting that excess capacity is already happening to an extent.
While differences in 28 and 20nm processes—such as double patterning—create challenges, the existing capital equipment is largely compatible with both processes. Such a high volume of wafers and the large available capacity will lead to increasingly aggressive wafer pricing over time. As a result, cost-effective wafers from foundries will encourage totally new designs that would not have been possible at today’s wafer cost.
Industry outlook 2013
So, how is the outlook for 2013 going to shape up? Dr. Rhines said: “After almost no growth in 2012, most analysts are expecting improvement in semiconductor market growth in the coming year. Currently, the analyst forecasts for the semiconductor industry in 2013 range from 4.2 percent on the low side to 16.6 percent on the high side, with most firms coming in between 6 percent and 10 percent. The average of forecasts among the major semiconductor analyst firms is approximately 8.2 percent.
“However, most semiconductor companies are less optimistic in their published outlooks. This seems to be influenced by the level of uncertainty that exists because of unknown government actions and market conditions in the US, Europe and China.”
Any more consolidations?
It would be interesting to hear Dr. Rhines’ opinion on any further consolidations within the industry. He said: “It is common misperception that the semiconductor industry is consolidating. A closer look at the data shows that the semiconductor industry has been doing the opposite. It has been DE-consolidating for more than 40 years.
“Take the #1 semiconductor supplier, Intel. Intel’s market share is the same today as it was a decade ago. And, the combined market share of the top five semiconductor suppliers has been slowly declining since the 1960s. Similar trends also apply to the top ten and top 50—both are the same or lower than they were a decade, as well as decades, ago. In fact, the combined market share of the top 50 semiconductor companies has decreased 11 points in the last 12 years.