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.
Very interesting, isn’t it? And I am not surprised! TSMC deserves to move up the top 20 semiconductor companies rankings!! It seems that AMD especially needs to really get its act together.
In this list, there are four fabless semiconductor companies — Qualcomm, Broadcom, MediaTek and Nvidia in the top 20, and one foundry — TSMC, perhaps, emphasizing the growing influence of TSMC as well as the fabless semiconductor companies.
AMD slips! Again?
I had written a couple of posts some time back on AMD and Intel, where the former had commented on the EC ruling on Intel, and also how both were at each other’s throats, and had asked the question — how will all of this help the market?
Well, one hopes that AMD will come back very much stronger in the next quarter, despite its uninspiring guidance for 3Q09, saying that it expects its sales to be “up slightly” from 2Q09.
TSMC, Hynix, MediaTek shine
Coming back to the table, the clear movers are TSMC, and no surprises there, as well as Hynix and MediaTek. In fact, with a little better Q3 performance, TSMC could well move up to the third position, overtaking both Texas Instruments and Toshiba.
Look at the last column — the 2Q09/1Q09 percentage change — TSMC has grown by a whopping 93 percent! One other thing! TSMC is reportedly eyeing business opportunities in solar photovoltaics and LEDs in a bid to diversify its revenue channels. Should these happen, expect TSMC to move up higher!
The closest to TSMC in terms of growth are Hynix at 40 percent and Qualcomm at 36 percent, respectively. MediaTek, another impressive mover, grew by 20 percent. Of course, there is Samsung as well, with 29 percent growth.
ST, Micron, Nvidia and NXP have done well too! According to IC Insights, Nvidia replaced Fujitsu in the Q2-09 top 20 rankings. And that brings us to the shakers or those who fared poorly.
Fujitsu, AMD, Freescale slide!
I’ve already touched upon AMD. Fujitsu cited flash memory and automotive device sales to have suffered immensely this quarter. However, it hopes Q3 will be better and said that customer demand was picking up. So, it could well be back in the Top 20 during Q3.
Yet another slip was in store for Freescale. It slipped from 16th position in 2008 to 18th position during Q1-09, and slid further to 20th position in Q2-09. Perhaps, overdependance on automotives has been its undoing.
An interesting statistic from IC Insights — Fujitsu, with -9 percent and Freescale, with -2 percent growth, were the only two top-20 companies from Q1-09 to register a 2Q09/1Q09 sales decline!
Wonderful industry guidance
It is heartening to see 19 of the 20 companies registering positive growth this quarter. It won’t be improper here to commend IC Insights on its wonderful industry guidance!
In an IC Insights study from late December 2008, it was very vocal in advising firms to adopt a quarterly outlook! It also forecast a significant rebound in the IC market beginning in the third quarter of the year!
IC Insights also stood out by pointing out in early July that H2-09 is likely to usher in strong seasonal strength for electronic system sales, a period of IC inventory replenishment, which began in 2Q09, and positive worldwide GDP growth.
IC Insights had marked 4Q08 as the beginning of the downturn/collapse and Q1-09 as the bottom of the cycle. This quarter (Q2) has largely been a replenishment phase for the inventories. Going by that count, Q3 could well see a true seasonal increase in demand. IC Insights also said that during Q4-09, market growth will mirror the health of the worldwide economy and electronic system sales.
There is light, after all, at the end of the tunnel! Wonder why are the industry folks continue to tell each other — we still aren’t having a good time! Maybe, it is time for them to shed their pessimism and from holding back on investments, and move on to show steely optimism, and indulge in really aggressive buying and selling! After all, work and progress will happen ONLY if you work!!
Intel’s misjudgment of the low margins of the Atom in its netbook processor has hurt the company for the second successive quarter, according to the report: “Netbook-Mobile Internet Device Convergence: Strategic Issues and Markets,” recently published by The Information Network (www.theinformationnet.com).
The Information Network had stated on January 7 that Intel misjudged the success of the Netbook and its Atom processor to the tune of about a billion dollars for Q4. Given the low margins announced in its Q1 release, Intel is still bogged down by the Atom.
The Atom used in a Netbook is processed with 45nm feature sizes on 300mm wafers and measures 25sqmm. It is priced at about $29. Intel’s Penryn Core 2 processor is used in Notebooks. It is also processed with 45nm feature sizes on 300mm wafers and measures 107sqmm. It is priced at about $279. There is a price difference of $200 per processor between the Penryn and Atom, but more importantly, a difference of $115,000 per processed 300mm wafer.
“Intel rethought its production schedule in Q1 by allocating capacity for the Atom and for the Penryn, unlike Q4 where the cut back production on the more profitable Penryn,” noted Dr. Robert N. Castellano, president of The Information Network. “We estimate that Intel produced 5 million Atom processors and 50 million Penryns.”
On March 2, Intel and TSMC announced they had reached an agreement to collaborate on technology platform, IP infrastructure, and SoC solutions for the Atom CPU cores. That situation will improve Intel’s margins for Q2 2009.
“While the announcement was slated toward TSMC’s capability to produce Atom cores for Intel’s march into the Mobile Internet Device (MID) market, which is dominated by ARM, it was an opportunity for Intel to wipe production of the Atom off its books. I’d like to think of it as ‘Intel’s Atom Bomb’,” added Dr. Castellano. “It indicates the tech sector is not really that bad off as the numbers suggest, but just a miscalculation on Intel’s part. Indeed, Intel did say that the bottom had been reached in the PC sector.”
It is always interesting to write semicon blogs! Lots of people come up to me with their own comments, insights, requests, etc. One such request came from a friend in Taiwan, who’s involved with the semiconductor industry.
I was asked forthrightly what I thought of the top 10 global predictions, which I had blogged/written about some time back late last year.
Top 10 semicon predictions
For those who came in late, here are the 10 global predictions on semiconductors made at that time (late December 2007.
1. Semiconductor firms may have to face a recession year in an election year.
2. DRAM market looks weak in 2008.
3. NAND market will remain hot.
4. Power will remain a major issue.
5. EDA has to catch up.
6. Need to solve embedded (software crisis?) dilemma.
7. Consolidation in the fab space.
8. Capital equipment guys will continue to move to other market.
9. Spend on capital equipment to drop.
10. Mini fabs in developing countries.
Well, lot of water has flowed since those predictions were made. Let’s see how things stand, as of now. The updated predictions would look something like these:
1. There have been signs of recession, but the industry has faced it well, so far. In fact, Future Horizons feels that if there is going to be a global economic recession, the chip industry (but not all companies) is in the best shape possible to weather the ensuing storm.
2. Memory market is changing slightly as well, though people are very cautious. According to Converge, memory market prices appear to be stabilizing. iSuppli has predicted a poor year for DRAM though!
3. NAND Flash could show some recovery later this year. Yes, Q1-08 QoQ sales seems to have slipped, but the market remains hopeful of a recovery. Even iSuppli warned of NAND Flash slowdown in 2008, while Apple slashed its NAND order forecast significantly for 2008! Keep those fingers crossed!!
4. Power remains a big issue, and will continue to be so. This will remain as we move up newer technology process nodes.
5. EDA is seemingly catching up with 45nm designs. Magma, Synopsys, and the other leading EDA vendors are said to be playing big roles in 45nm designs.
6. Fabless companies are gaining in strength. No doubt about it! The 2007 semicon rankings show that. Also, Qualcomm is now the leader in the top wireless semicon suppliers, displacing Texas Instruments.
7. There have been consilidations (or long term alliances) in: a) fab space b) DRAM space. In the fab space, Intel, Samsung and TSMC have combined to go with 450mm wafer fab line by 2012. And in the DRAM space, there have been new camps, such as Elpida-Qimonda, and Nanya-Micron partnering to take on Samsung. With the global semiconductor market seeing steady decline in growth rate, which would continue, look forward to more consolidations.
8. Investments in photovoltaics (PV) have eased the pressure on capital equipment makers and spend somewhat. In fact, 2007 will be remembered as the year when the PV industry emerged as a key opportunity for subsystems suppliers and provided a timely boost in sales for those companies actively addressing this market. Perhaps, here lies an opportunity for India.
9. Mini fabs — these are yet to happen; so far talks only. In India, a single silicon wafer fab has yet to start functioning, even though it has been quite a while since the semicon policy was announced. Conversely, some feel that India should focus on design, rather than go after something as mature as having wafer fabs. However, several solar fabs — from Moser Baer, Videocon, Reliance, etc., are quite likely.
10. Moving to 45nm from 32nm is posing more design challenges than thought. This is largely due to the use of new materials. Well, 45nm will herald a totally different structure — metal gate/high-k/thin FET/deep trench design, etc. It will herald a new way of system design as well.
Now, I am not a semicon expert by any long distance, and welcome comments, suggestions, improvements from you all.
IC Insights recently published the May update to The McClean Report, featuring the Top 20 global semiconductor companies. Not surprisingly, there have been some significant movers and shakers. The most telling — quite a few of the major DRAM and Flash suppliers have dropped out of the Top 20 list!
First the movers! Fabless supplier Qualcomm jumped up four spots, ranking as the 10th largest semiconductor supplier in Q1-08. Next, Broadcom, the third largest fabless supplier, also moved up four positions, up to the 20th position. Panasonic (earlier, Matsushita), moved up to the 19th position, while NEC of Japan moved up to the 13th position.
TSMC, the leading foundry, moved up one position, registering the highest — 44 percent — year-over-year Q1-08 growth rate, besides being ranked 5th. Nvidia, the second largest fabless supplier, was another company registering a high YoY growth rate of 37 percent, and moved into the 18th position. Some others like Infineon, Sony and Renesas also climbed a place higher each, respectively. The top four retained their positions — Intel, Samsung, TI and Toshiba.
And now, the shakers! The volatile DRAM and Flash markets have ensured the exit of several well known names such as Qimonda, Elpida, Spansion, Powerchip, Nanya, etc., from the list of the top 20 global semiconductor companies, at least for now.
Among the others in the list, the biggest drops were registered by NXP, which dropped to 14th from 11th last year, and AMD, which dropped two places, from 10th to 12th. Two memory suppliers — Hynix and Micron — also slipped two places, to 9th and 15th places, respectively. STMicroelectronics also slipped from 5th to 6th. IBM too slipped out of the top 20 list.
The top 20 global semiconductor firms comprises of eight US companies (including three fabless suppliers), six Japanese, three European, two South Korean, and one Taiwanese foundry (TSMC). Also, looking at the realities of the foundry market, TSMC’s lead is now unassailable. If TSMC was an IDM, it would be No. 2, challenging Intel and passing Samsung, said one analyst, recently, a thought shared by many.
IC Insights has reported that since the Euro and the Yen are strong against the dollar, this effect will impact global semiconductor market figures when reported in US dollars this year.
There are some other things to watch out for. Following a miserable 2007, the global DRAM module market is likely to rebound gradually in 2008 due to the projected recovery in the overall memory industry, according to an iSuppli report. That remains to be seen.
Some new DRAM camps — such as Elpida-Qimonda, and Micron-Nanya — have been formed. It will be interesting to see how these perform, as will be the performance of ST-backed Numonyx.
Further, the oversupply of NAND Flash worsened in Q1-08, impacted by the effect of the US sub-prime mortgage loan and a slow season, according to DRAMeXchange. The NAND Flash ASP fell about 35 percent compared to Q4-07. Although the overall bit shipment grew about 30 percent compared to Q4-07, the total Q1-08 sales of branded NAND Flash makers fell 15.8 percent QoQ to US$3.24bn. Will the NAND Flash market recover and by when?
If there is going to be a global economic recession, the chip industry (but not all companies) is in the best shape possible to weather the ensuing storm!
According to Malcom Penn, CEO, Future Horizons, we are dealing with a semiconductor industry in ‘deep trauma.’ He was delivering the company’s forecast at the recently held International Electronics Forum (IEF) 2008 in Dubai, predicting a 12 percent growth this year despite signs of a wobbling US economy.
Is there a need to get back to the industry basics? “Semiconductors are a peculiar business; the only sane strategy is to bet the company regularly,” once remarked Dr Gordon Moore.
Penn noted that the current industry status is somewhat confused and uncertain. Short-term issues are dominating the agenda.
Longer-term structural trends are unclear. The traditional IDMs are currently going through a mid-life ‘new business model’ identity crisis, and the start-ups are struggling to even reach critical mass! And all of this has been happening amidst intense economic uncertainty
“Now is the time for strong nerves and determination,” Penn said. According to him, the underlying industry fundamentals are sound and there is no end in sight to the ‘make-lunch-or-be-lunch’ ethos.
The emerging economies like India and China have so far been less affected by the financial market’s turbulence. In fact, the emerging and developing economies were shifting the global growth dynamics.
Chip industry in best possible shape
A forecast health warning is: IF the global economy collapses, it will take the chip market with it. However, Future Horizons feels that if there is going to be a global economic recession, the chip industry (but not all companies) is in the best shape possible to weather the ensuing storm.
The ASPs are an enigma wrapped up in riddle. The course of ASPs (like love) never runs smooth. Wobbles happen! ASPs are also the perennial (and least understood) industry wild card. ASPs are generally driven by new IC designs, and that takes time (sometimes three to four years). Post-2001, value recovery lost one generation (130nm impact). The ASP recovery ‘wobbled’ in 2007 (memory and MPU price wars). Barring a recession, Future Horizons forecasts that ASPs will recover in 2008 (it has already started).
12 percent growth likely
Future Horizons’ 2008 forecast summary and assumptions (as of May 2008) are — ‘12 percent’ growth — ’10 percent’ units / ‘2 percent’ ASP. There may be no global economic recession, although US/UK/Eurozone might wobble — which they are! No significant inventory correction will probably take place, but there are always Q4>Q1 adjustments, and there’s nothing special about that either.
There could be lower fab capacity expansion due to 2007/2008 capex slowdown, which is inevitable and irreversible. There is also a possibility of a more stable memory price erosion — which means, back to the learning vs. bleeding curve, and prices have since hardened. If the global economy holds, the 2H-08 growth will likely be strong. This, if the capacity, ASP and units are all pulling together, which is said to be happening.
Therefore, Penn feels it is too early to call for a (major) downward revision. Q1 08 was a lot stronger than conventional wisdom feared.
“That’s the rational analysis, but semiconductors aren’t rational. It could just as easily be another single digit growth year,” Penn added.
Danger signs to watch out for
So, what are the danger signs one should watch out for? These would be capacity — it is hard to see how this can spoil 2008, provided unit growth holds up, but there is a need to watch capex. Another factor is demand — the current IC unit demand is sustainable provided the economy holds up, so there is a need to watch the inventory.
Next comes the economy! The current outlook continues to be uncertain with risks all on the downside. ASPs are the key to recovery, but always the first line of defence. ASPs could still derail 2008, but the trends are encouraging.
What’s driving the market?
In semiconductor 7.0 — or the 7th decade of the transistor revolution, the same things, as always, are driving the market. These are: technology, legislation — energy saving/conservation and structural — the relentless analog to digital conversion. All of these are combining to do what the chip industry does best — enabling something that was previously impossible. Penn contends, “This industry has nowhere near run out of steam!”
New applications continue to drive the market, with automotive, industrial and medical, mobile phones, and PCs and servers, dominating. The PC market is dominating, but going nowhere fast. Mobile phones have become more interesting, but have conflicting priorities. The challenges are: how to protect the existing cost structure and subscriber base and how to add useful and affordable value-add services! Evidently, “chipset suppliers love the high end, market loves the low end.”
There is definitely an increasing automotive semiconductor content. A solid annual growth has been prediced (CAGR 2006-11) for vehicles — 5.5 percent, systems — 11.5 percent, and semiconductors — 13.3 percent. Some other new areas are motor control and energy, as well as lighting and photovoltaic, besides medical electronics. Robotics is yet another interesting area.
Key industry issues
It is clear that more chips per wafer equals less cost per chip and more transistors per die equals more functionality. Several billion transistors gives phenomenal design flexibility as well. Considering total ICs and MOS ICs, in the MOS capacity build out by technology node, there has been no change in volume ramp profile despite the hype.
As for the evolution of the technology node, definitely, 45nm is a revolutionary step from 65nm. In all likelihood, 32nm will be a natural evolutionary. However, Penn cautioned that 22nm would be another ‘difficult’ transition!
There is no doubt that 65nm will be tomorrow’s leading-edge workhorse, having the same basic Si gate/SiO2/MOSFET structure. Nevertheless, 45nm will herald a totally different structure — metal gate/high-k/thin FET/deep trench design, etc. Also, 45nm will herald a new way of system design.
Is fabless right?
Is Fablite a valid option? While there is nothing wrong with being fabless, people are just not sure whether the best starting point is being an IDM. Teamwork has to be perfectly orchestrated as competition is tough.
As for the market share dynamics, the top 10 companies (IDMs) have been losing share. Fabless share has been growing, but it is still relatively small.
Coming to the realities of the foundry market, TSMC’s lead is now unassailable. Were it an IDM, it would be No. 2, challenging Intel and passing Samsung. Moving more into design looks inevitable.
Finally, execution, and not technology, is everything! Execution has and will continue to make the difference. Applications (software) will play the role of the key differentiator as well, and it has value. Design is the means to an end, and not the end.
From the chip industry’s perspective, the electronics market was traditionally Japan, North America and Western Europe. It now encompasses the entire Asian rim, China, Eastern Europe and India. Far from maturing, the chip industry itself is still in its volatile, high-growth phase, with at least a further 20 years of strong growth in prospect. Penn said, “The underlying growth drivers for chips has never been better.”
Back to basics
We started with the need to get back to industry basics. We end in the same way! Stick to basics like:
* Don’t invest in low cost areas just because they are cheap — they have a habit of becoming high cost tomorrow, plus the hidden extras.
* Don’t make outsourcing decisions just because they are easy — especially if there’s no way back.
* Don’t make strategic cut-backs just to trim the bottom line — some decisions, e.g., R&D, take a long time to impact, then it’s too late.
* Stop looking for high volume/high value market niches — they don’t exist, need to learn how to compete
* Do show strong leadership
* Do have a long-term plan and stick with it — even if it negatively impacts ‘the next quarter’ balance sheet
* Do show a commitment and determination to succeed
* Do stay focused and resistant to external meddling
* Do execute ruthlessly — this is the key competitive differentiator)
* Do … just do it with passion — it’s the passion that makes the difference