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Semiconductor Manufacturing Strong Due to Economic Recovery

By 2017, the dominant semiconductor revenue opportunity in the Internet of Things will shift from infrastructure to the Things, and that the challenge will be in how to bring thousands of new products to market rapidly and cheaply.

The market for semiconductors looks promising due to the increased silicon requirements for the “pervasive computing era,” according to speaker at the SEMI Industry Strategy Symposium held last week. The group highlighted some of the speakers’ presentations.

Opening keynoter Rick Wallace, president and CEO of KLA-Tencor contrasted consolidation-driven industry mergers to what he characterized as more agile productivity-oriented innovation growth.  He rejected dual-source strategies as the optimal path for the industry and its supply chain and called for industry to make a more convincing appeal to young talent. In a provocative differentiation from competitors, Wallace questioned whether “too big to fail is also too big to innovate.”

Robert C. Fry, senior economist at Dupont, pointed to low but persistent global economic growth and highlighted positive data for global industrial production. He forecast global GDP growth of 3.1% in 2014 — up from 2.4% in 2013.

He also spoke about the increasing correlation between global GDP and semiconductor output, with high tech once again growing faster than the economy. Fry stated that global leading indexes are trending up, but not strongly or universally.  Semiconductor shipments are finally setting new highs again and semi shipments have been trending up for more than a year.

Bob Johnson, research vice president at Gartner, said that in the short term, growth will return to equipment markets in 2014 with annual growth between 16% and 21%. He expects quarterly weakness in the first half of 2014 after a strong fourth quarter in 2013.

Longer term, he sees foundries battling IDMs for supremacy in mobility markets, technology shifts on the horizon with the advent of 3D NAND and EUV, and  450mm implementation beginning by end of 2017.  Also, Johnson said that by 2017, the dominant semiconductor revenue opportunity in the “Internet of Things” will shift from infrastructure to the “Things,”  and that the challenge will be in how to bring thousands of new products to market rapidly and cheaply.

Rod Morgan, vice president at Micron Technology, said that an increasingly connected lifestyle is driving memory requirements with mobile multi-functional devices, with embedded sensors and significantly greater memory consumption. Fast growing memory in a highly interconnected world demand is split across multiple sub-segments. The $16.4 billion mobile memory segment is a portion of the overall memory market (RAM $31.0 billion; Flash $26.6 billion).

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