by James Montgomery, News Editor

After scolding memory firms for overspending and India for irrational chest-thumping and “real-men-own-fabs” nationalism in the face of economic realities, McClean also suggested there aren’t enough people in the industry who think about risks — not typical risks like yield-killing defects, but larger scale risks such as usage of volatile chemicals, natural disasters, and geopolitical uncertainty.

Fires at various points in the chip industry have caused ripple effects throughout the supply chain (e.g. at plastic resin supplier Sumitomo and services firm ASE just two years ago), not to mention the inherent risks in IC fabrication (e.g. chemicals and gases that ignite on contact with air), he noted. Even geopolitical instability is being underappreciated. Though China is too pragmatic to level Taiwan with military action, relations remain tense between the two and “the risk is still huge,” McClean said, also pointing to perpetual tensions between North/South Korea.

Then you have natural disasters — most the world’s IC capacity is being concentrated in a region rife with earthquakes and typhoons, McClean pointed out. He related a tale of visiting STMicroelectronics’ fab in Catania, Italy, built there as a nod to local officials and not because of a strategic manufacturing location. It also happens to sit at the base of Mt. Etna, an active volcano. McClean said he had noted with unease the smoke belching out of the mountain — but that the more easygoing locals view it simply as built-up pressure being released, and far better than the alternative. — J.M.