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Semiconductor supply chain dynamics: Future Horizons @ IEF2011

The last decade heralded a dramatic transformation in supply chain dynamics, driven by the complexity challenge of staying on the More Moore curve. On the demand side, the high cost of fabs persuaded almost all integrated device manufacturers (IDMs) to use foundries for their leading-edge wafer supply.

The ever-increasing process complexity and its negative impact on manufacturing yields forced the adoption of sophisticated foundry-specific design-for manufacturing (DFM) techniques, effectively committing new chip designs to a single foundry and process.

At the same time, the industry adopted a much more cautious lagging rather than leading demand approach to new capacity expansion, resulting in under-supply and shortages in leading-edge wafer fab capacity. To make matters worse, the traditional oxide-based planar transistor started to misbehave at the 130nm node, as manifested by low yields and higher than anticipated power dissipation, especially when the transistors were supposed to be off, with no increase in performance, heralding the introduction of new process techniques (e.g., high-k metal gates).

Even before these structural changes have been fully digested, supply chain dynamics have been further disrupted by the prospective transition to 450mm wafer processing, to extreme ultra violet (EUV) lithography, and from planar to vertical transistor design.

Transistor design
Since the start of the industry, adding more IC functionality while simultaneously decreasing power consumption and increasing switching speed—a technique fundamentally known as Moore’s Law—has been achieved by simply making the transistor structure smaller. This worked virtually faultlessly down to the 130nm node when quite unexpectedly things did not work as planned. Power went up, speed did not improve and process yields collapsed. Simple scaling no longer worked, and new IC design techniques were needed.

While every attempt was made to prolong the life of the classic planar transistor structure, out went the polysilicon/silicon dioxide gate; although this transition was far from plain sailing, in came high-k metal gates spanning 65nm-28nm nodes. Just as the high-k metal gate structure gained industry-wide consensus at 28nm, it too ran out of steam at the 22nm-16nm nodes, forcing the introduction of more complex vertical versus planar transistor design and making the IC design even more process-dependent (i.e., foundry-dependent). Dual foundry sourcing, already impractical for the majority of semiconductor firms, will only get worse as line widths continue to shrink. Read more…

This downturn was NOT a classic semiconductor bust and boom, ignore industry fundamentals at your peril: Future Horizons

According to Malcolm Penn, chairman and CEO, Future Horizons, May’s semiconductor sales were up 2.6 percent on April, 3.6 percent for ICs, continuing the steady sequential industry growth that started in January 2009, 17 months ago.

May’s results mean Q2-10 will show at least 8.3 percent quarterly growth over Q1-10, increasing the full year growth forecast to 36 percent. Given last year’s growth was minus 9 percent, mathematically this is a classic industry cycle. It is NOT, he insists.

At this point in the ‘recovery’, it is much more important to look at sequential and quarterly growth rates rather that the 12:12 rates, given the high double digit rates they show are just as misleading and irrelevant as the high double digit negative rates from this time last year.  The reality is they net each other out thereby highlighting the real nature of the current cycle.  This downturn was a pause, the recovery a restart, it was NOT a classic semiconductor bust and boom.

Future Horizons has been telling everyone very publicly that the industry recovery started in March 2009, first in the April 2009 edition of its Global Semiconductor Report, substantiated by a very long and detailed analysis at the Geneva IEF2009 Forum last October.

The recovery, together with ever-increasing substantiating data, has been a recurring theme in its  Global Semiconductor Monthly Report ever since, as well as at the Dresden IEF2010 event in May 2010.

Penn added: “At the same time I have been warning that industry was cutting back existing capacity far too much and too fast whilst simultaneously failing to invest in net new capacity. Our clear message always was that these two factors were a recipe for disaster. The disasters are now starting to happen.

“While we obviously do not expect firms to run their business based on what we say, if the market recovery really has taken firms by surprise, executives from the top down either failed to recognise the significance of the data we were drawing their attention to over the past 15 months or they simply made the decision to ignore it. Ignore the industry fundamentals at your peril.”

Recovery not quite classic!
Future Horizons clearly states that this recovery is not a classic recovery. On being quizzed further, Penn said, “it was a dead stop and restart, just like hitting the pause button on your remote, rather than a crash and rebuild.” This is perhaps the same reason why the recession is now being termed as a market interruption.

Future Horizons has also been warning that industry was cutting back on the existing capacity far too much and too fast, while simultaneously failing to invest in net new capacity. Is the semicon industry still on this path?

Penn added: “Spending has now resumed (since Jan. 2010) and cut backs have stopped, but there’s a one-year time delay before these will start to impact. Why? Lack of industry confidence, driven too much by short-term financial performance, risk averse management and shareholders, lemming factor, etc.”

The long-term ramifications, should the industry fail to invest in net new capacity, are loss of sales and market position/leadership to those firms who did invest (e.g. TSMC, Samsung).

Well, it seems the global semiconductor industry has not learned enough from the previous recessions! Read more…

May 2010 global semicon update: Four quarters of sequential growth, yet still no one believes! Wake up, says Future Horizons

June 1, 2010 Comments off

Here are the excerpts from the Global Semiconductor Monthly Report, May 2010, provided by Malcolm Penn, chairman, founder and CEO of Future Horizons. There are a lot of charts associated with this report. The report also covers market trends. Those interested to know more may contact Future Horizons.

March’s total semiconductor sales came in at $26,533 billion, slightly above our February expectation, closing the quarter at $69,181 billion. This was up 2.8 percent over Q4-2009 and one of the strongest first quarter performances ever in what is normally a negative growth quarter. We have now had four straight quarters of industry growth, yet still no one believes in the strength of the recovery!

Of course, something unexpected can always go wrong but the industry fundamentals have never been better aligned. Just as 2001 ushered in the conditions for the so-called the perfect (semiconductor) storm, 2010 is now wallowing in the inverse effect. Surprisingly, few firms are tough. Most are too timid, too cautious or too scared. Welcome to the brave new world of semiconductor company ambivalence and life-threatening risk aversion. “Hello”.

Future Horizons presented its review and forecast for the global semiconductor market on the first day of their ongoing 19th International Electronics Forum (IEF) 2010 in Dresden, Germany, May 6-8. Our overall prediction was that the 2010 chip market would have a barnstorming year; only a disaster of the Lehmann Brothers scale could now derail the market.

The overall five-year forecast presented was:

* 2010: +31 percent, with still some scope for upwards revision.
* 2011: +28 percent; based on: peak of the structural cyclical boom (could stretch into 2012).
* 2012: +18 percent; based on: normal cyclical trash cycle starting 2H-2012 (1H-2013?).
* 2013: +3 percent based on: market correction in full flow (could be negative, cap ex overspend and inventory build depending).
* 2014: +12 percent; based on: start of the next cyclical recovery (single digit, if 2013 is negative).

This would take the industry to around $300 billion in 2010 with a CAGR of 11.8 percent between 2010-14. It would also signal a 180-degree reversal in the industry’s fortunes following its ‘zero growth’ 2000-09 lost decade of growth. Moreover, despite the apparent bullishness of these numbers, given the now unavoidable 2010-11 fab shortage, the growth upside for 2010-12 is still huge.

The real tragedy however of what ought to have been good news for the industry was: (a) still, no one believes in the numbers; and (b) it was entirely predictable.

We first presented this forecast in January 2009, at the high point of the industry’s economic and business uncertainty. The only change we have made in the last 17 months was to increased 2010’s growth number from 15 to 31 percent number. Whilst all other industry analysts, business leaders, trade associations and economists alike wrestled with what was happening, we alone never lost faith in the industry or what the underlying fundamentals were saying.

This cycle’s forecast was the easiest we have ever had to make. All we had to do for the IEF meeting was to adjust for the fact that the 2009 recovery was faster and steeper than even we had dared to predict. The bottom line? The industry fundamentals may often get distorted by events but they never lie, ignore them at your peril.

We were ridiculed for our optimism in January 2009 and throughout the year when we stuck to our guns. We never stopped believing in the numbers however and never subscribe to industry fashion, trend or sentiment, despite this sometime being out on a limb with industry consensus.

We are proud of the fact only we got this analysis right but equally sad that no one had the courage to listen. This was not forecast luck either; this was simply doing what we do best, making a considered analysis and then believing in what the forecast tells us.

Global semicon industry update Mar. ’10: Time for a reality check…pessimism has swung too far, says Future Horizons

January’s WSTS results continued to follow the underlying industry recovery trend, with ICs sales up 4.8 percent versus December (on a five-week month adjusted basis). They were also up 73.7 percent versus January 2009, a relatively meaningless number other than to recall just how bad things were this time last year.

The real significance of January is its potential impact on first quarter sales. Were this run rate to continue through February and March, first quarter sales would be up 8 percent versus Q4-09. That would make 2010 grow a staggering 40 percent on 2009. This is by no means a forecast but it does serve to illustrate the strength of the recovery from the abyss this time last year.

Ignoring the structurally (and typically) wild individual monthly fluctuations – which simply means no single month is a good indicator of the underlying trends – the month on month numbers will not settle down until the second quarter of 2010. That being said, given the likely strength of the first quarter versus Q4-09, our current 22 percent forecast for the total year now looks far too low.

Our 22 percent forecast for 2010 was based on the relatively benign quarterly growth pattern of -1.0, +1.0, +6.2 +2.0 percent; in essence a very weak year. No one we speak with is seeing a negative first quarter, with a consensus now building for at least 3 percent positive growth. That alone would bring the year on year growth up to 28 percent.

At the same time, almost everyone is also boasting a strong Q2 backlog with price stabilisation, even increasing; low inventory levels; and tightening supplies, which places severe doubt on the credibility of our plus 1 percent second quarter growth forecast. Were this to be say plus 3 percent, the year on year growth would be 30 percent.

It does however give us further confidence in our analysis and now places our forecast at the low end of the forecast range. Barring an epic 9/11, Act Of God or immoral banker style disaster, growth of anything less than 22 percent in 2010 is now all but impossible.

We fully expect to be increasing our forecast to around the plus 30 percent level at our forthcoming IEF2010 International Electronics Forum in Dresden, May 5-7 bringing the 2010 market within spitting distance of $300 billion in revenues. Read more…

Global semicon industry update: 30 percent growth now on radar for 2010, says Future Horizons

February 3, 2010 Comments off

Here are the excerpts from the Global Semiconductor Monthly Report, January 2010, provided by Malcolm Penn, chairman, founder and CEO of Future Horizons. There are a lot of charts associated with this report. The report also covers market trends. Those interested to know more may contact Future Horizons.

November’s IC sales continued the year-end rally, down just 2.4 percent on October, up 29.3 percent vs. November 2008. This confirms our earlier prediction that Q4-09 sales would be up around 6.4 percent on Q3-09, one of the strongest year end-closes on record – Q4 sequential growth is typically ‘zero plus minus 2 percent’.

This confirms that 2009 will come in close to our minus 10 percent forecast, most probably at minus 9.7 percent, setting 2010 up for a bumper double-digit growth year. Only a Lehman Brothers-type event can now derail the recovery, the future is bright, and not before time too. For far too long now doom and gloom has spoilt the chip market horizons. Industry faith has been stretched beyond the limit.

Ignoring the structurally (and typically) wild individual monthly fluctuations – which simply means no single month’s data is a good indicator of the underlying trends – November’s result places us comfortably within our minus 10 percent 2009 growth estimate.

Based on November’s WSTS data, it is now very difficult to see anything less than a 22 percent growth year for the semiconductor market in 2010 based on the current industry momentum (i.e. a fourth quarter growth of around 6.4 percent) and a very ‘average’ quarterly growth pattern for 2010. Indeed we are now starting to see the first industry guidance revisions that tend to indicate even this range might be low. If the current growth momentum holds firm, 2010 chip market growth could easily hit 30 percent.

Low double-digit growth is totally out of the question, growth in single digits an absolute impossibility, Figure E3. Either of these scenarios would need a very poor start to the year, which is simply not happening. Order books are strong, inventory levels are low, capacity is tight and demand is holding up. You could not wish for a better start to the year … what a difference from this time 12 months ago. Only a massive economic collapse can now spoil the party.

As we mentioned before, only a massive economic disruption like a Lehman Brothers bankruptcy can now derail the recovery and this is not being forecast by the economists. Quite the opposite, GDP data is trending more and more positively, with an upwards revision at the macro level more likely than not. This is not to say that the economic recovery is not fragile, it is far from out of the woods and many risks still remain.

Of the ‘not so good news’, to our minds the biggest single problem is the world’s financial systems remain unreformed and, worse still, unrepentant. This means the same issues that caused the global financial problem in the first place remain unchecked. In 1929, Wall Street’s shamed bankers jumped from their office windows. In 2009 they stood in line for their bonuses. From a chip market perspective, a sound economic base is important but the correlation is poor.

Whereas a collapsing GDP will trigger a chip market downturn, just as it did in the 2001 dot com bust and September 2008 Lehman Brothers collapse, the rates of recovery are independent of each other. For example, the economy recovered faster than the chip market after 2001 whereas the chip market is leading the recovery in 2009.

The extent of the market collapse can be gauged by looking at the peak to trough data, showing over one third of the chip market simply disappearing overnight. Except ASPs, despite this massive decrease in demand, ASPs help firm, in fact they rose a modest 1 percent. One year after the chip market collapsed, units and value have now recovered to 98 and 90 percent respectively of their Q3-08 (market peak) value, with ASPs coming in just 8 percent lower.

This is quite an extraordinary recovery, seeing as it took a full two quarters more for the world to exit recession. It happens though because there was no chip market bubble prior to the downturn.

With the memory market now in full flood of recovery – we can easily see an upside potential of a $60 billion market for 2010 – and memory prices increasing with barely a flinch from the market, 2010 is set to be a very good year for the industry. The only problem is that no one yet believes it.

Confidence has been shattered ever since the 2000 bust, with a glass half empty mindset dominating collective thinking. “Market growth is now single digit; ASPs will keep on falling; Where are the killer products to drag the chip world out of recession; We need to specialise, merge, narrow the R&D scope, cull the product line and above all dump all the fabs; outsource for capital and operating efficiency; etc”.

Well, to coin a phrase once used by Jerry Sanders III, “Nuts!” It was only 2004 when growth hit 28 percent just after an 18 percent growth in 2003. Better get planning now, it’s already too late. Read more…

Nov. 09 update: -10 percent growth in 2009, +22 percent minimum for 2010, says Future Horizons

December 31, 2009 Comments off

Here are the excerpts from the Global Semiconductor Monthly Report, November 2009, provided by Malcolm Penn, chairman, founder and CEO of Future Horizons. There are a lot of charts associated with this report. Those interested to know more may contact Future Horizons.

As a result of September’s sales exceeding the high end of even our best-case expectations, Q3-09 romped in with a massive 19.7 percent quarterly growth forcing us to once again revise upwards our 2009 forecast.

We now have 2009 pegged at only a 10 percent decline, a long way off from the minus 28 percent number we were staring in the face this time last year. Plugging this new base line into our 2010 forecast increases the growth outlook to at least 22 percent. If Q4 continues the Q2/Q3 momentum, this could even go much higher still. This is not wishful thinking … the market recovery has now broken through its escape velocity. Only a global economic disaster of cataclysmic proportions can now derail the chip recovery dynamics.

Ignoring the structurally (and typically) wild individual monthly fluctuations – which simply means no single month’s data is a good indicator of the underlying trends – September’s result means our recently revised minus 14 percent growth estimate for 2009 is far too pessimistic. We are now officially increasing this to minus 10 percent.

Partly this reflects the fact the Q4-08/Q1-09 market decline was far too steep and partly it is the result of the maths whereby all future monthly 12:12 growth numbers will be measured against a dynamic whereby the 2009 numbers are trending up whereas the 2008 numbers are trending down, amplifying the impact of the 2009 positive monthly trends.

The big question to our mind is: “Why is it that everyone seems absolutely convinced that 22 percent growth for 2010 is simply not possible, expecting instead something in the 10 to 16 percent range?” The reasoning is usually accompanied by comments along the lines “chips are becoming cheaper” and “there are no killer applications to drive (sustain) the recovery”, meaning such a strong growth forecast is a “reflection of wishful thinking and not market reality”.

We disagree! First from a forecast perspective, the difference between 16 and 22 percent growth is not so statistically significant, so what we are really looking at is two distinct forecast scenarios … 10 to 14 percent (which includes the WSTS and most of the independent forecasting firms) and 16 percent plus, which at the moment comprises primarily ourselves. Read more…

Future Horizons signs me as its India affiliate!

December 2, 2009 2 comments

Recently, Future Horizons signed me up as its India affiliate. It is indeed, an honor to be an affiliate for any leading research and consulting house, and I am grateful that Malcolm Penn, chairman and CEO, thought that I would fit the bill.

I have known Malcolm for several years now. Although I know making any forecast is really tricky stuff, and nine times out of ten, one is bound to go wrong, owing to market conditions and other unforeseen happenings, I’d still stick my head out and say — hey forecasters, you do a great job!

Even I’ve asked Malcolm several times as to whether Future Horizons would be revising its forecasts. And yes, it has, it does and will probably continue to do so in the future. That’s the nature of the global semiconductor industry!

There is a lot of semicon related activity going on in India, besides solar/PV. Just take a look at some of my recent  posts on embedded, some of the initiatives undertaken by the ISA to promote the Indian industry overseas — particularly, in the UK and Japan.

With so much new activity in India, am sure that a lot of Future Horizons’ publications, its well known International Electronics Forum (IEF) and the Start Up Service will appeal to this market. I am new, rather a greenhorn, and will seek the industry’s guidance and support in playing my role as a Future Horizons’ affiliate. And no, I won’t be writing anything for Future Horizons. Of course, I will continue my posts on the global semiconductor industry forecasts with Malcolm, as I do with several others — here, on my blog.

Personally, I’d love to see an international semiconductor conference hosted in India. Am tired of hearing friends overseas telling me: Hey, there’s this big show being held in the USA or Taipei. Are you attending?

Incidentally, I was very pleased to be able to attend SEMI India’s Solarcon 2009 last month in Hyderabad — a truly global event with a galaxy of international speakers. So, I turned around and asked my friends — hey, why aren’t you attending?

I hope Malcolm can some day bring IEF to India, with the help of the India Semiconductor Association. It will really act as a major boost for the Indian semiconductor industry.

On another note
Today, it is exactly a year since my blog and I won’s World Title for the Best Blog in the Electronics Hardware category in Dec. 2008! Alun Williams from recently told me: “There is no EW blog awards this year, by the way. We’ll do it bi-annually, so you get to keep your crown for another year!” Thanks to Alun and

Thanks for all of your kind support, dear readers, friends and well wishers, who have cared to stop by my blog now and then. Some of you also leave comments from time to time. I personally don’t know most of you who leave comments, but many thanks to all of you for doing so.  Hope that you continue to find my blog and my work useful.

If there’s something missing in my blog, do understand that I have several constraints, and also do not have access to lot of companies, regions, shows, etc., as I’m merely a blogger. Nor am I part of any large media house! Nor am I any authority on semiconductors, solar or telecom, and so on and so forth!

If, at any stage, I am forced to stop writing, or otherwise, this blog belongs to all of you!

Have a merry X’mas and a very Happy New Year, lest I forget to wish everyone. 🙂 Best wishes and good night!

Excerpts from Future Horizons’ IEF 2009 — II

November 1, 2009 Comments off

Presenting excerpts of some more key presentations made on day 1 and 2, resepectively, at the recently held International Electronics Forum 2009 (IEF 2009), in Geneva, Switzerland, from Sept. 30-Oct. 2, which was held under the auspices of the Geneva Chancellerie D’Etat & Istitut Carnot CEA LETI.

May I also take this opportunity to thank Malcolm Penn, chairman and CEO, Future Horizons.

“ICT: Key For Global Competitiveness” — Enrico Villa, chairman, CATRINE

Enrico heads up the Cluster for Application and Technology Research In Europe on NanoElectronics (CATRINE) and through his organisation Europe is preparing for our future with development projects in nanotechnology, microelectronics, photonics, biotechnology and advanced materials.

Electronic and information systems are worth $87 trillion and growing, which is about 10 percent of global GDP. Such systems have penetrated all aspects of life, created millions of jobs and has been a motor of productivity growth.

Microelectronics is a key enabling technology for electronics and ICT, and as a consequence the semiconductor market grows at twice this GDP. The role of electronics will increase in the future and will have an impact in society due to its use in healthcare, aids for an aging population, easing transportation bottlenecks and lowering energy costs.

To meet these targets electronics and ICT must be affordable to the population at large – meaning that semiconductors must meet the trend of doubling performance every two years, reduce price per function by 40 percent per year and aim for R&D nearly 20 percent of sales.

In an example given public lighting is 13 percent of energy costs – a change to semiconductor LEDs can save a third of this energy. Enrico sees moving from ideas to products is one area where Europe is weak, but thankfully projects Jessi/Eureka/Catrine/Medea+ are bringing together cooperation between European players.

This has enabled European companies and universities to work together and create critical masses to make global products. This is born out in the fact that Europe has several global-sized semiconductor companies and two European equipment-material suppliers that are world leaders.

“Raising The Bar On Semiconductor R&D Management, Execution & ROI” — Ronald Collett, CEO, Numetrics Management Systems

Working with the company PRTM Ron is tasked to raise the management competence within the semiconductor industry so companies can compete in the global arena. The semiconductor industry is going through a profound change with the vertically chip companies disintegrating and outsourcing their manufacture. Headcount has fallen, there are fewer start-ups and everybody is cutting costs.

Companies that will survive are those with well differentiated products and superior product development ability. PRTM has produced an integrated framework of product development capabilities, which compares company actual performance against industry best practice and timescales.

It is a fact that 60 percent of semiconductor projects slip in time by at least one quarter and 16 percent slip by more than one year. The system allows ‘fact-based planning and decision making’ and allows management to get no surprise shortfalls in revenue or margin.

At a detailed level, the engineer can make a fact-based project cost estimation and can reliably make staffing requirements and schedules. It allows ‘what-if’ project analyses and calculates risk. The immediate impact is usually a reduction of projects, but a better time-to-market and ROI. An industry shakeout is inevitable and demands will overwhelm all, but the best.

“Building Complex Embedded Software Applications On Leading Edge Silicon” — Martin Orrell, General Manager, Multimedia Technologies, The Technology Partnership

TTP is an independent product development company involved in a wide range of products including embedded systems in medical devices, PC peripherals, MP3 players and automotive, industrial and traffic control.

Martin’s view is that one of the difficulties in embedded design is to recognise that the hardware and software boundaries tend to blur. Using software rather than hardware has its advantages, particularly where the standards and specifications have not firmed up, but software often costs more than the customer planned.

Costs can be saved by the re-use of silicon and software IP, the starting platform and roadmap, trimming the specification and through innovation. TTP has a wide range of experience and can often view a customer project from a different perspective and Martin gave a number of good examples of case studies where this was the case.

To finalise, two tips were given to product developers: More complex software does not mean higher project costs and silicon targeted for a different market can enable innovative opportunities in your own market. Read more…

Excerpts from Future Horizons’ International Electronics Forum 2009 @ Geneva

October 18, 2009 1 comment

Here are excerpts of some key presentations made on day 1 at the recently held International Electronics Forum 2009 (IEF 2009), in Geneva, Switzerland, from Sept. 30-Oct. 2, which was held under the auspices of the Geneva Chancellerie D’Etat & Istitut Carnot CEA LETI. I hope to be presenting full reports as well.

May I also take this opportunity to thank Malcolm Penn, chairman and CEO, Future Horizons, as well as Gemma Fabian.

“Powering Out Of Recession With Innovation”’ — Maria Marced, President, Europe, TSMC

Maria Marced emphasised both investment and collaboration as a way forward for the semiconductor industry to recover from this recession. Based on the fact that every known recession has been followed by a strong recovery in demand the Taiwanese wafer foundry TSMC is expected to increase its earlier projected dollar investment plans substantially. Its new manufacturing GigaFab (Fab12-Phase4) will eventually be able to supply 150,000 wafers per month.

It will also being investing in people and will be adding 30 percent more R&D engineers to its existing 1200 worldwide and will also be adding 15 percent to its existing design technology engineers.

Maria stressed that it is innovation in our products and continued R&D that will improve semiconductor company margins. R&D costs and time-to-market can be reduced by processing equipment suppliers, IDMs and fabless companies collaborating with foundries for future success in finer geometries. TSMC has already announced that it has set up a development laboratory in a partnership with IMEC of Louvain, Belgium.

There were some questions about possible overcapacity as some plants in China were coming on line, but Maria thought differently as TSMC was already running at 90-95 percent of capacity today. There even could be a shortage of processed wafers in 2010.

“Feeding The World’s Insatiable Appetite For Memory – New Technologies, New Markets, New Applications” — Brian Harrison, President & CEO, Numonyx

Brian Harrison of Numonyx, a memory company jointly owned by STMicroelectronics and Intel, made a robust case for its latest technology Phase-Change Memory (PCM). Describing the history of non-volatile memory Brian showed its dramatic growth driven by both a continuously reduced cost-per-bit and new applications that needed its ability to support firmware that could be updated ‘down the wire’ or ‘across radio networks’.

The industries’ most recent entrant, PCM, is claimed to be a disruptive technology that will enable the next wave of innovation. In the right application it will replace both DRAM and flash memories — replacing these because of either speed, size, retention reliability or lower energy or a combination of all virtues.

Numonyx is already sampling 128Mbit 90nm product and has cost reduction 45nm process in development that is aimed at 1Gbit products. Samsung is also working on products in this field. The two companies are collaborating on package and interface standards.

“Agile Customer Support-Models For ‘More Moore” — Jean-Marc Chery, Executive VP & CTO, STMicroelectronics

Finer and finer geometries are still possible and there seems no immediate end, to the progress of process development. Jean-Marc needs a variety of processes to cater for broad application markets, that include automotive, industrial, medical and radio, so STMicroelectronics needs to maintain leads in low-power CMOS, smart power, analogue, discretes and MEMs markets.

To maintain this present agile supply chain and fund future development the company believes in growth in its own fabs in Crolles, Agrate, Tours and Catania, which gives it a key competitive differentiator. It then leverages these internal resources to deliver its business units the best price and foundry-like supply by using multiple sources.

As an example, STMicroelectronics joins European development programmes and works closely with laboratories such as CEA/LETI and other European institutes and universities. It is also involved in process development with the International Semiconductor Development Alliance (ISDA) which involves AMD, Chartered Semiconductor, IBM, Infineon, NEC, Samsung, and Toshiba. A 28nm CMOS process is being developed, which will be ready for volume production in 2010 at four sites.

What matters to Jean-Marc is keeping the ability to produce silicon subsystems for its chosen markets and this can be done either on-chip or by using 3-D integration techniques, such as stacking RF chips on top of digital CMOS within a single package. He finds these technologies important to keep in-house rather than going to an open-market foundry, although he does not rule out joint manufacturing plants with ISDA members. Read more…

Semicon recovery likely in H2-09 after sharp recession: Future Horizons

April 24, 2009 Comments off

This is what I’ve received and heard a few minutes ago! If it does happen, as stated, there can’t be any better news than this for the global semiconductor industry!

According to Malcolm Penn, chairman, founder and CEO of Future Horizons, a recovery is expected in the second half of 2009 after a sharp recession!!

Future Horizons is predicting this recovery in the second half of 2009 in the Annual Semiconductor Report that was released today.

“There have so far been ten chip-market recessions and all but two have resulted in negative industry growth,” said Malcolm Penn, Chairman, founder and CEO of Future Horizons. “The year 2009 will mark the industry’s 11th recession; a further period on negative growth is inevitable at an estimated minus 28 percent, similar in magnitude to 2001.”

He added: “This semiconductor recession is unlike previous recessions and is directly attributable to the worldwide financial problems; it is not a structural problem of the industry itself. This factor will help to mitigate the global recession’s impact on the industry. On the other hand, all markets and all regions were impacted quickly and at the same time. This leads us to predict a minus 28 percent negative growth in dollars for the global semiconductor market over 2008.”

Future Horizons believes that the industry is in structurally good shape to enter a recession. This should make the 2009 downturn shorter than it might otherwise have been, depending on when the confidence in the global economy stops falling and that is expected to be during 2010.

Today, businesses prefer the ‘stop everything/do nothing’ approach, resulting in the dramatic fall in Q4 semiconductor demand, but this cannot continue forever. Future Horizons expects a gradual return to ‘business as usual’ — whatever the new ‘usual’ turns out to be — in Q2 2009, once a degree of confidence returns to the markets.

It is impossible to predict when the recovery will start, but it eventually will and, given the extent and abruptness of the Q4-08 decline, an overshoot is inevitable making the recovery process faster coming, possibly as early as the second half of this year.

I will be in conversation with Malcolm Penn later today, hopefully, and will carry another post on this subject, should that happen. Stay tuned, folks! 🙂

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