Preparing For Any Possibility
Good news - it would appear that the semiconductor industry recovery has begun! The Worldwide Semiconductor Equipment Book to Bill ratio cleared 1.0 late last year, the first time for over twelve months. Front-end capacity utilisation also increased reaching 92%, suggesting that the industry is running out of capacity. With current capacity close to being fully utilised, and most of the 300 mm fabs only partially filled, there is the potential for a fast ramp depending on the order rate from the semiconductor manufacturers. However, further growth will likely be gated by the ability of the equipment manufacturers to ramp the supply chain and gear up their manufacturing plants to deliver equipment. Some semiconductor companies have already seen a remarkable recovery in stock price last year, with Applied Materials' stock up by 68%, up 97% for ASML, 84% for Axcelis, and 58% for MKS. Price-to-earnings ratios in the mid 40s for forecasted 2004 earnings suggest relative optimism in expectations for growth in revenues and profitability for 2004.
However, in relative terms, profitability in the capital equipment field continues to be weak and is a potential issue to new technology development advances given the short-term focus on the bottom line and the inevitable R&D cuts. The only way around this is for companies to become more open in creating alliances and joint ventures, so that the cost of R&D can be shared, whilst still allowing each member of the venture to develop its own niche service.
While the underlying demand for semiconductors is forecasted to be strong throughout the year, actions by industry leaders however, will determine whether the industry is capable of maintaining this strong growth, or overshooting and propelling itself into another recession. Does an inevitable repetition of the 1999/2000 boom loom on the horizon?
One solution of course is that companies should exercise some caution during this period to prevent the pitfalls of the 1999/2000 boom - avoid over-hiring, over-building, over-ordering and over-heating. However, in the middle of a fast paced recovery, where market share determines overall profitability, suggesting caution ultimately falls on deaf ears as companies scrabble to book orders and expand the organisation to meet the predicted demand.
The key to managing the 'bubble' is accurate forecasting and quality market and industry intelligence. This is where Semiconductor 2004 offers the ideal opportunity to get first-hand market information and forecasts from industry leaders and provides the ideal meeting place to explore potential partnerships.
Semiconductor 2004 is proven as the ideal event for networking and business development opportunities - an essential event in the Global Semiconductor calendar. Semiconductor 2K events previously featured Intel, Philips, Applied Materials and many more, providing a high standard of interesting papers - 2004 is no exception. Principal sponsorship from Scottish Enterprise has assisted in Semiconductor 2004 building on the success of the event since its inception in 2000, provoking discussion and enabling networking within the European semiconductor community.
The chairman for Semiconductor 2004 is Professor Colin Whitehouse from CCLRC, a key figure in linking research and industry. Known for its consistently strong program, this years' event speakers include Malcolm Penn of Future Horizons advising on ‘Riding the Semiconductor Industry Tsunami'. Other speakers from Compugraphics International, Microemissive Displays and YOLE Developpement will also be presenting with topics covering new designs, lithography, displays, III/Vs and MEMS - and IDC will be informing of ‘Future Trends in Fab Design' and Infineon will be speaking on ‘Security in Silicon'.
Opportunities to explore potential partnerships, new directions and exciting future relationships are also on offer at the accompanying exhibitor tabletop event, taking place at the same venue allowing an excellent showcase for vendors to practically demonstrate their latest technology.
In addition, for this year's event there will be three additional modules available, the topics of which are:
• How to Market in China - led by Malcolm Penn, this will explore the needs of this explosive market and how to penetrate and operate in this region.
• Excellence in Marketing - led by Chris Walker, this continues the series of successful Marketing workshops that have been valuable to so many companies over the previous 2 years.
• New at Semiconductor 2004 is a Decision Makers Lunch - a “Limited Edition” as places are restricted to allow more time spent with invited guests at the top level in the semiconductor industry. Sponsored by the NMI, this will provide an opportunity to meet and discuss current needs with leading industry figures.
Not only does Semiconductor 2004 offer the prospect of a tightly packed event full of vital information, it also provides the perfect setting in which to enjoy the experience. Facilitating informal networking and business advantage through cutting edge market information - it's an unbeatable combination.