Further Growth for Semiconductor Equipment and Materials
The SEMI Industry Strategy Symposium (ISS) opened with the theme "Riding the Wave of Silicon Magic." The sold-out conference of the industry's C-level executives highlighted favourable forecasts in the year's first strategic outlook for the global microelectronics manufacturing industry. The underlying drivers for growth and the next wave emerging from the Internet of Things (IoT) were discussed from several perspectives.
Opening keynoter Scott McGregor, president and CEO of Broadcom, traced the history of the industry's more than 50 years of exponential improvements in silicon speed, power and design since Moore's Law in 1965. McGregor sees the next wave of Silicon Magic as a $15 trillion opportunity that will provide ubiquitous, nonstop, seamless high-speed connectivity. Still, McGregor believes that three key issues challenge the industry's growth. First, patent reform, as patents are the foundation of the innovation economy and the global patent system does not meet today's industry realities. Second, interoperability and standards, as IoT is raising the stakes for data privacy and security. Finally, STEM education, as in the future, all businesses will be tech businesses.
In the Economic Trends session, presenters took on both macroeconomic and detailed industy-specific forecasts:
"¢Nariman Behravesh, senior economist at IHS, presented the macroeconomic view of 2015 and the global implications brought on by the sharp drop in oil prices. IHS predicted that the U.S. will grow in the 2.5-3.0 percent range in 2015 while other regions will be mixed: the European recovery will be slow, Japan's economy will regain weak momentum, and China growth will continue to slow, but remain stronger than most.
"¢Mario Morales, VP at IDC, presented the 2015 semiconductor outlook. IDC saw the semiconductor market grow 7 percent in 2014 and projects 3.8 percent growth in 2015. Market growth will be led largely by automotive and industrial segments.
"¢Andrea Lati, principle analyst for VLSI Research, presented the 2015 semiconductor equipment outlook. VLSI saw semiconductor equipment sales coming in at 17 percent growth in 2014 and forecasts 8 percent growth in 2015. VLSI noted the top 7 chipmakers accounted for 71 percent of spending in 2014 (vs. 56 percent in 2010). VLSI sees the consolidation driving an industry that has smaller cyclic peaks and is settling into a moderated two-year cycle cadence with fewer players having less incentive to individually make a market share grab."
Several presenters discussed the Internet of Things (IoT) and offered that the IoT provides an unprecedented growth opportunity "” and understanding just what IoT is, at this stage, a challenge. The lively session featured Frank Jones, VP and GM at Intel, David Ashley, VP of Customer Value Chain Management at Cisco Systems, Shawn DuBravac, chief economist and director of research at the Consumer Electronics Association (CEA), and Martin Reynolds, managing VP and fellow at Gartner.
Among the insights in the IoT session, Jones stressed that with all the IoT hype, it's critical to demonstrate business value. Working with partners, he cited emerging IoT examples such as: saving 43 percent in time with an integrated "Smart Parking Solution" and improvements to Intel's own factories with fab personnel defining a process step predictive maintenance tool (sensors and analytics) that saved $9 million per year. Ashley made the point that with $19 trillion for the IoE at stake, the supply chain, including economic trends (labor wage inflation, government policy, shrinking life cycles) and ecosystem (supplier consolidation, visibility, consumer-driven technology) need to be addressed. DuBravac focused on how everyday objects are becoming smarter and more connected and said that the key to technology should be what is meaningful as opposed to what is possible.
Days 2 and 3 at ISS delve deeper into the underpinnings of the industry. Technology and manufacturing insights will be discussed with presentations from: TSMC, Altera, XMC, Intel, Honeywell, Micron, imec, ASE, IBM, Lux Research, Illumina, Cypress, Boing, and McKinsey. A "Silicon Magic" panel will wrap up the conference with Intel, Lam Research, JSR, TSMC, and Qualcomm.
