by Bob Haavind, Editorial Director
In spite of slower growth expected for both chips and process tools in 2007, speakers at the Industry Strategy Symposium in Half Moon Bay, CA, projected a very bright upbeat future.
Beyond a soft landing, with “stubborn growth” as one pundit put it, will come surging markets, fueled by a host of new developments in consumer gadgets, alternate energy, medical technology, and more, often based on a grab-bag of new chip architectures and functions cribbed from biology.
“Is IT (information technologies) a major revolution?” was a question posted by Edward Prescott, Nobel laureate economist from Arizona State U. who is also a consultant to the Federal Reserve Bank of Minneapolis. His answer was an emphatic “Yes!”
“It is changing the way we live as fundamentally as the agricultural and industrial revolution, and it is just beginning!” he concluded.
While agreeing that slower growth is ahead in 2007, Bill McClean, IC Insights president, rhapsodized that the period of double-digit unit demand growth for ICs from 2002-2006, topped by a 15% surge in 2006, was “the best IC unit demand growth period in the history of the industry.” He believes that the recent slump in ASPs will turn around soon, as the industry fights through a few months of softness and a mild inventory buildup at chipmakers.
The high-tech sector is becoming linked much more to the world economy with less volatile cycles, and economic growth will slow this year, predicted Robert Fry, senior associate economist with DuPont. While global GDP rose 3.9% in 2006, it will slow to 3.3% in 2007, with the US slowing from 3.3% in 2006 to 2.5% this year. While semiconductor revenues will be up 9%-10% in 2006, this will slow to perhaps 6% this year. He expects a flat year for process tools in 2007. But while a slowdown in growth can be expected, it will not be a downturn, according to Fry.
Steep improvements in productivity will drive the rosy future foreseen by Nobel laureate Prescott. It is the output/hour that determines living standards, not the hours worked/person, he said. Productivity, driven by IT advances, was zooming ahead at a 30%/decade rate from 2000-2004, and will continue its surge for the next 100 years, he predicted.
Technology may begin to accelerate as designers gain new inspiration from our growing understanding of biological systems, according to Steve Jurvetson, managing director of Draper Fisher Jurvetson, a venture capital firm.
“VCs look for disruptive innovations,” he pointed out, and then showed how biological systems are providing new insights that may fuel the growth of future technology. More advances in Moore’s Law will come from exotic architectures than the shrink in the next few years, he believes, often due to what he called biological bootstrapping.
Biology provides “a library of pre-built components and subsystems,” Jurvetson noted, that evolves over millions of years. He cited examples in areas such as organisms that eat NOX and SOX, with a waste stream of ethanol and biodiesel fuel.
This may sometimes involve inscrutable subsystems that accomplish desired tasks, but defy understanding of the details of how they accomplish what they do, somewhat like a bubble-sort algorithm devised by Danny Hillis. If networking or emergent properties are involved, it may be difficult to do the reverse engineering, he said.
Jurvetson suggested tongue-in-cheek that the human genome is smaller than Microsoft Office, and we want to find out how biology can be so efficient. — B.H.