Category Archives: Displays

Intersil Corporation, a provider of power management and precision analog solutions, today announced the ISL98611 display power and LED driver for smartphones. The ISL98611 is the first power management IC that integrates the display power and backlight LED driver functions in a single chip. It significantly improves efficiency of both functions to increase smartphone battery life by an hour or more.

In addition to extending battery life, the ISL98611 also improves display brightness uniformity and color consistency. The highly integrated ISL98611 has a boost regulator, LDO and inverting charge pump for generating two output rails at +5V and -5V in a single device. It also includes a boost regulator with 3-channel current sinks for the LED backlight driver. This single-chip solution offers designers four key benefits:

  • Extended battery life: When used for web browsing and emails, a smartphone’s backlight LEDs and display power consume the majority of its battery power. The ISL98611 backlight LED driver delivers seven percent higher efficiency (up to 93 percent) than competitive multi-chip solutions and generates +/-5V display power supplies with greater than 88 percent efficiency at 15mA load using a 2.5x2mm2 size inductor, compared to 85 percent efficiency of the nearest competitor.
  • Improved display uniformity: The ISL98611 provides excellent LED current matching at very low LED current: it achieves +/- 2.2 percent matching down to 1mA and +/- 2.8 percent at 50μA.
  • Improved display color consistency: The ISL98611 includes hybrid dimming to eliminate white LED color shift issues at low LED current, which occur with DC dimming.
  • Smallest footprint: The ISL98611’s total display power plus backlight solution uses 24 percent less PCB area compared to the competition, while requiring only eight external components. This provides additional space to house the phone’s battery.

“With each new product generation, smartphone designers are challenged to add more features, reduce size and extend battery life,” said Andrew Cowell, senior vice president of Intersil’s Mobile Power Products. “The ISL98611 delivers the integration, extended battery life and display image quality improvement our customers want in their next-generation smartphone designs.”

FlexTech Alliance announced the conference theme, Call for Papers, and the industry chairs for the 14th Annual Flexible & Printed Electronics Conference & Exhibition — 2015FLEX — set for February 23 – 26, 2015 at the Monterey Conference Center, Monterey, California.   “Bringing Technology & Products to Markets” as a theme reflects the steadily growing integration of flexible and printed electronics components in a wide-array of products and processes. The theme will be used to focus on how flexible electronics are demonstrating the value of light weight, low power products to non-traditional electronics markets, and thereby by delivering on the true promise of making lives healthier, safer, simpler and smarter.

The Flex Conference relies on a strong group of industry members to ensure leading edge business and technical content. This year’s committee is led by key industry veterans Ross Bringans of PARC, a Xerox Company; Michael Idacavage of Esstech; Thomas Kolbusch of Coatema Corp.; and Robert Praino of Chasm Technologies. The chairs guide the committee in identifying thought leaders for invited and keynote presentations, and in searching the industry for breakthroughs and advancements that spur market growth and partnerships.

The conference Call for Papers and Posters outlines the categories noted by the committee to be of highest interest for event attendees. Researchers from industry and academia, as well as national institutes, are encouraged to submit an abstract by October 17, 2014 to be considered for presentation in one of 24 different technical sessions. This year’s topics include the emerging, exciting sector of nano-bio devices, as well as manufacturing technologies that underpin the popularity of wearable electronics.

Quantum Materials Corp today announced achieving a calculated 95% Quantum Yield (QY) for Green Tetrapod Quantum Dots (TQD) manufactured by QMC’s proprietary automated mass-production system. The Full-Width Half-Maximum achieved was a narrow 36 nanometers with tunable emission from 530 to 550nm. Potential clients are currently evaluating these high-performance TQD.

QMC is pleased to offer high quantum yield quantum dots with reproducible FWHM uniformity, reliable system redundancy, and the ability to scale production to any quantity necessary for industrial purposes with modest capital expense (CAPEX) and low ongoing manufacturing costs. QMC’s ability to achieve economies of scale with automated production is unmatched and offers supply security and dependable cost forecasting in joint ventures planning very large quantum dot product rollouts.  QMC is planning additional capacity on the order of multi-kilograms per day to meet project needs that are being defined. QMC previously stated that capacity could be expanded sufficient to support the entire display industry converted to quantum dot 4K and 8K displays.

According to market researcher IHS, demand for QD-LCD displays is projected to jump to 87.3 million units by 2020 (a CAGR of 109% between 2013 and 2020) as QD prices decrease and a reliable and uniform quantum dot supply is assured for large production runs.

In solar photovoltaics, Solterra Renewable Technologies, a QMC wholly owned subsidiary, calculates just one Solterra Quantum Dot Solar Cells (QDSC) Plant can be scaled up to produce 1000 Megawatts per year of printed solar cells using its own dedicated production of QMC quantum dots.  A Solterra QDSC facility would rely on low CAPEX for both the QD production as well as low startup costs for the solar cell equipment.  Combined automated production of QD and QDSC allow a cost goal of under 12¢ per kWh, the present estimated residential electricity rate in the U.S. In comparison, the four largest solar projects in 2012 in the U.S. are planning to produce 1788Mw at a CAPEX of $11.5B ($6.5MM/MW) with Federal Subsidies of $5.7B and U.S. taxpayer liability in loan guarantees. Typically, due to the need to pay down the loan, a purchase agreement by a Public Utility or local government must require a higher rate to be paid than 12¢ per kWH, which is passed on to the public in the form of higher bills. Solterra’s goal is to establish regional or national QDSC plants at a fraction of the above CAPEX entirely by the private sector, without federal subsidies, and a cost goal of under 12¢ per kWh.

Liquid-crystal-display television (LCD TV) panels enjoyed unexpected growth in the first half of this year, tied to enthusiastic TV viewing because of the World Cup and other factors that benefited the market, according to a new report from IHS Technology.

Global LCD TV panel shipments during the first six months of 2014 rose 3 percent from the same period a year ago, as shown in the attached figure. Although growth this year was much less than the 9 percent expansion logged during the first six months of 2013, achieving any increase at all was unforeseen.

2014-08-06_LCD-TV_Panels

“What a surprising result this was, as the television industry doubted that shipments could increase during this time,” said Ricky Park, director for large displays at IHS. “It was unclear whether any growth would occur because of signs earlier in the year that appeared to be discouraging. However, the market has righted itself, to everyone’s delight.”

Among the variables fueling the market, perhaps none were more dazzling than the month-long, glittery affair known as the World Cup. Starting in June, the world’s premiere soccer event drove up demand for televisions, especially in Europe and South America.

Sports extravaganzas long have been reliable drivers of television sales—and by extension, the LCD TV panels that make up the sets. And for events of global interest like the World Cup or the Olympics, staged once every four years, keen anticipation usually helps propel the market upward.

Still, the athletics spectacle alone was no guarantee of growth. But other factors also kicked in, helping create an overall favorable environment for the global LCD TV trade in the first half. These included signs of a continuing economic recovery in North America, one of the world’s two largest markets for LCD TVs alongside China; a subsidy program initiated by the Mexican government for its citizens to buy new LCD TVs; and the continued phasing out of bulky, tube-type analog televisions, now obsolete in many areas of the world.

These findings are available in the report entitled, “LCD Supply and Demand Market Tracker – Q2 2014,” from the Displays service of IHS Technology.

But strong demand is blunted by production problems

Despite the stronger-than-expected demand for the January to June period, a drop in yields and a loss in capacity due to production line modifications caused a shortage of supply of LCD TVs. The effects were felt especially in the ultra-high-definition television (UHD TV) segment of the industry.

Issues related to quality have cropped up, for instance, in the production of so-called PenTile RGBW UHD panels, which are aimed at the 40-inch segment of the UHD space. A Samsung-patented technology, PenTile panels add a subpixel with no color filtering material that allows the backlight through, resulting in white (W) being added to the traditional red, green and blue (RGB) subpixels. The technology makes brighter images possible with the same amount of power used for RGB.

The production headache is becoming a problem, Park added, because the price of PenTile RGBW UHD TVs was supposed to be coming down in order to better compete with non-UHD sets. With four times the resolution of 1080p sets, UHD TVs are also priced far higher than conventional high-definition television models.

Also facing trouble was the production method known as multi-model on a glass (MMG). Low production efficiencies resulted in reduced capacity for MMG, especially in the advanced production lines for eighth-generation fabs.

On top of those problems, a growing share of the manufacturing base that once had enjoyed maximized glass efficiency—lines producing TV panels in sizes of 39.5, 42.5, 48 and 48.5 inches—experienced deteriorating yields.

Production issues of a different nature are likely to occur in the second half, IHS believes, extending current manufacturing woes. A substantial loss in production capacity is expected during the remainder of the year because panel makers in China and Taiwan are slated to use different electrode materials from those currently deployed, ostensibly to improve their UHD products. The makers affected include AU Optronics, Innolux and BOE Optoelectronics.

Change is also afoot at Korean suppliers Samsung Display and LG Display.

Samsung Display will reduce the thickness of its front-pane glass to 0.5 millimeters as the company increases the production of curved TVs. LG Display, meanwhile, reportedly is converting part of an eighth-generation line to oxide thin-film transistor technology in order to produce organic light-emitting-diode (OLED) panels, a rival technology to UHD LCDs that the maker hopes will start picking up among consumers.

All the same, TV prices are not expected to dip in the months to come in spite of the ongoing production problems, which will serve to constrict the supply of LCD TVs.

A “valley of death” is well-known to entrepreneurs–the lull between government funding for research and industry support for prototypes and products. To confront this problem, in 2013 the National Science Foundation (NSF) created a new program called InTrans to extend the life of the most high-impact NSF-funded research and help great ideas transition from lab to practice.

Today, in partnership with Intel Corporation, NSF announced the first InTrans award of $3 million to a team of researchers who are designing customizable, domain-specific computing technologies for use in healthcare.

The work could lead to less exposure to dangerous radiation during x-rays by speeding up the computing side of medicine. It also could result in patient-specific cancer treatments.

Led by the University of California, Los Angeles, the research team includes experts in computer science and engineering, electrical engineering and medicine from Rice University and Oregon Health and Science University. The team comes mainly from the Center of Domain-Specific Computing (CDSC), which was supported by an NSF Expeditions in Computing Award in 2009.

Expeditions, consisting of five-year, $10 million awards, represent some of the largest investments currently made by NSF’s Computer, Information Science and Engineering (CISE) directorate.

Today’s InTrans grant extends research efforts funded by the Expedition program with the aim of bringing the new technology to the point where it can be produced at a microchip fabrication plant (or fab) for a mass market.

“We see the InTrans program as an innovative approach to public-private partnership and a way of enhancing research sustainability,” said Farnam Jahanian, head of NSF’s CISE Directorate. “We’re thrilled that Intel and NSF can partner to continue to support the development of domain-specific hardware and to transition this excellent fundamental research into real applications.”

In the project, the researchers looked beyond parallelization (the process of working on a problem with more than one processor at the same time) and instead focused on domain-specific customization, a disruptive technology with the potential to bring orders-of-magnitude improvements to important applications. Domain-specific computing systems work efficiently on specific problems–in this case, medical imaging and DNA sequencing of tumors–or a set of problems with similar features, reducing the time to solution and bringing down costs.

“We tried to create energy-efficient computers that are more like brains,” explained Jason Cong, the director of CDSC, a Chancellor’s Professor of computer science and electrical engineering at UCLA, and the lead on the project.

“We don’t really have a centralized central processing unit in there. If you look at the brain you have one region responsible for speech, another region for motor control, another region for vision. Those are specialized ‘accelerators.’ We want to develop a system architecture of that kind, where each accelerator can deliver a hundred to a thousand times better efficiency than the standard processors.”

The team plans to identify classes of applications that share similar computation kernels, thereby creating hardware that solves a range of common related problems with high efficiency and flexibility. This differs from specialized circuits that are designed to solve a single problem (such as those used in cell phones) or general-purpose processors designed to solve all problems.

“The group laid out a different way of presenting the problem of domain-specific computing, which is: How to determine the common features and support them efficiently?” said Sankar Basu, program officer at NSF. “They developed a framework for domain-specific hardware design that they believe can be applied in many other domains as well.”

The group selected medical imaging and patient specific cancer treatments–two important problems in healthcare–as the test applications upon which to create their design because of healthcare’s significant impact on the national economy and quality of life.

Medical imaging is now used diagnose a multitude of medical problems. However, diagnostic methods like x-ray CT (computed tomography) scanners can expose the body to cumulative radiation, which increases risk to the patient in the long term.

Scientists have developed new medical imaging algorithms that lead to less radiation exposure, but these have been constrained due to a lack of computing power.

Using their customizable heterogeneous platform, Cong and his team were able to make one of the leading CT image reconstruction algorithms a hundred times faster, thereby reducing a subject’s exposure to radiation significantly. They presented their results in May 2014 at the IEEE International Symposium on Field-Programmable Custom Computing Machines.

“The low-dose CT scan allows you to get a similar resolution to the standard CT, but the patient can get several times lower radiation,” said Alex Bui, a professor in the UCLA Radiological Sciences department and a co-lead of the project. “Anything we can do to lower that exposure will have a significant health impact.”

In theory, the technology also exists to determine the specific strain of cancer a patient has through DNA sequencing and to use that information to design a patient-specific treatment. However, it currently takes so long to sequence the DNA that once one determines a tumor’s strain, the cancer has already mutated. With domain-specific hardware, Cong believes rapid diagnoses and targeted treatments will be possible.

“Power- and cost-efficient high-performance computation in these domains will have a significant impact on healthcare in terms of preventive medicine, diagnostic procedures and therapeutic procedures,” said Cong.

“Cancer genomics, in particular, has been hobbled by the lack of open, scalable and efficient approaches to rapidly and accurately align and interpret genome sequence data,” said Paul Spellman, a professor at OHSU, who works on personalized cancer treatment and served as another co-lead on the project.

“The ability to use hardware approaches to dramatically improve these speeds will facilitate the rapid turnarounds in enormous datasets that will be necessary to deliver on precision medicine.”

Down the road, the team will work with Spellman and other physicians at OHSU to test the application of the hardware in a real-world environment.

“Intel excels in creating customizable computing platforms optimized for data-intensive computation,” said Michael C. Mayberry, corporate vice president of Intel’s Technology and Manufacturing Group and chair of Corporate Research Council. “These researchers are some of the leading lights in the field of domain-specific computing.

“This new effort enables us to maximize the benefits of Intel architecture. For example, we can ensure that Intel Xeon processor features are optimized, in connection with various accelerators, for a specific application domain and across all architectural layers,” Mayberry said. “Life science and healthcare research will undoubtedly benefit from the performance, flexibility, energy efficiency and affordability of this application.”

The InTrans program not only advances important fundamental research and integrates it into industry, it also benefits society by improving medical imaging technologies and cancer treatments, helping to extend lives.

“Not every research project will get to the stage where they’re ready to make a direct impact on industry and on society, but in our case, we’re quite close,” Cong said. “We’re thankful for NSF’s support and are excited about continuing our research under this unique private-public funding model.”

The Semiconductor Industry Association (SIA) today announced that worldwide sales of semiconductors reached $82.7 billion during the second quarter of 2014, an increase of 5.4 percent over the previous quarter and a jump of 10.8 percent compared to the second quarter of 2013. Global sales for the month of June 2014 reached $27.57 billion, marking the industry’s highest monthly sales ever. June’s sales were 10.8 percent higher than the June 2013 total of $24.88 billion and 2.6 percent more than last month’s total of $26.86 billion. Year-to-date sales during the first half of 2014 were 11.1 percent higher than they were at the same point in 2013, which was a record year for semiconductor revenues. All monthly sales numbers are compiled by the World Semiconductor Trade Statistics (WSTS) organization and represent a three-month moving average.

“Through the first half of 2014, the global semiconductor market has demonstrated consistent, across-the-board growth, with the Americas region continuing to show particular strength,” said Brian Toohey, president and CEO, Semiconductor Industry Association. “The industry posted its highest-ever second quarter sales and outperformed the latest World Semiconductor Trade Statistics (WSTS) sales forecast. Looking forward, macroeconomic indicators – including solid U.S. GDP growth announced last week – bode well for continued growth in the second half of 2014 and beyond.”

Regionally, sales were up compared to last month in the Americas (4.9 percent), Asia Pacific (2.1 percent), Japan (2.1 percent), and Europe (1.9 percent). Compared to June 2013, sales increased in the Americas (12.1 percent), Europe (12.1 percent), Asia Pacific (10.5 percent), and Japan (8.5 percent). All four regional markets have posted better year-to-date sales through the first half of 2014 than they did through the same point last year.

June 2014
Billions
Month-to-Month Sales
Market Last Month Current Month % Change
Americas 5.09 5.34 4.9%
Europe 3.13 3.19 1.9%
Japan 2.89 2.95 2.1%
Asia Pacific 15.76 16.09 2.1%
Total 26.86 27.57 2.6%
Year-to-Year Sales
Market Last Year Current Month % Change
Americas 4.76 5.34 12.1%
Europe 2.84 3.19 12.1%
Japan 2.72 2.95 8.5%
Asia Pacific 14.56 16.09 10.5%
Total 24.88 27.57 10.8%
Three-Month-Moving Average Sales
Market Jan/Feb/Mar Apr/May/June % Change
Americas 5.08 5.34 5.1%
Europe 3.08 3.19 3.5%
Japan 2.81 2.95 4.9%
Asia Pacific 15.18 16.09 6.0%
Total 26.15 27.57 5.4%

BY BYRON EXARCOS, President, CLASSONE TECHNOLOGY

Historically, the major semiconductor capital equipment manufacturers have focused on supporting the bigger semiconductor companies at the expense of the smaller ones. The last decade’s round of consolidations in the manufacturing and equipment sectors has only exacerbated this trend. This approach may make good business sense for the large equipment companies, but it’s created a serious challenge for smaller IC manufacturers. Even worse, it now threatens to stifle the continuing innovation on which the high tech industry depends.

It’s hard to fault the big equipment players for their business model. It’s much more cost-effective and profitable to dedicate the bulk of your resources to those customers who want to buy multiple process tools featuring “bleeding edge” technology on highly automated, volume production platforms. In many cases, it’s simply not as profitable to engage with smaller customers.

So what choice do the manufacturers have for populating their fabs if they’re running 200mm or smaller wafers? One alternative is to buy refurbished tools, assuming they can find a tool that meets their needs, which is not always easy. Another is to buy a bigger tool with more performance capabilities than they need, which busts their equipment budget. There aren’t many other options.

Now, one could dismiss this issue by simply saying, that’s the way this market works. Continued growth in our industry has always depended on a certain path of continual innovation. “Smaller, faster, cheaper” — producing smaller, more powerful chips in ever greater volume on larger wafers was a highly successful means of turning computers and subsequent mobile computing and communication devices into household items. It’s hard to fault a business/technology model that has been successful for so many years.

On the other hand, every emerging market eventually matures. We’ve all experi- enced the boom-and-bust cycles that roil our industry and what happens when the “last big thing” plateaus or dries up. Today, the capital equipment market is at a cusp. We need to examine whether the traditional smaller-design-rules/bigger-wafers/faster-throughput approach is helping or hindering the introduction of new technologies.

Today’s emerging technologies include devices such as smart sensors, power and RF wireless devices. The fact is, many of these chips can be made quite well and quite profitably using larger design rules on 200mm or even smaller substrates. However, many of the companies developing these devices are not huge enterprises, and they’re hampered by the unavailability of tools delivering the appropriate levels of process technology, automation and throughput — at a price they can afford. Ironically, our industry is in a phase where the equipment companies that once drove significant innovations, such as the introduction of copper deposition and low-k dielectrics, have become so large and narrowly focused that they’re impeding the development of many other emerging technologies.

I have some understanding of the needs of smaller device manufacturers because one of our companies, ClassOne Equipment, has been selling refurbished equipment to them for over a decade. That is why we’ve now created a whole new company, ClassOne Technology, to provide new equipment at substantially lower prices specifically for 200mm and smaller substrates. We are introducing new electroplating systems, spin rinse dryers and spray solvent tools; and some of them are literally half the cost of high-end competitive units. We’re particularly interested in serving all those small- to mid-sized companies who are making MEMS, power devices, RF, LEDs, photonics, sensors, microfluidics and other emerging-technology devices.

However, no single company can solve the entire problem. There is a glaring need for equipment manufacturers to bring the price/performance ratio of their tools back in line with the needs of more of the equipment users, not just those at the bleeding edge. If the tool manufacturers persist in trying to only sell the equivalent of sports cars to customers who just need pickup trucks, America’s high tech industry may soon find itself trailing, rather than leading the innovation curve.

Harnessing big data


July 28, 2014

Addressing the analytics challenges in supply chain management. 

BY NORD SAMUELSON, CHRISTOPHER POCEK and CHRIS LANMAN, AlixPartners, San Francisco, CA 

A changing workforce and lack of convergence between information technology (IT) and business may be preventing many companies from joining the big-data revolution. Defined as very large sets of data but more commonly used in reference to the rapid increase in amounts of data in recent years, big data will divide companies into two groups in the next decade: those able to benefit from big data’s potential and those unable. Companies that create capabilities for capturing, processing, analyzing, and distributing data in order to make better decisions in real time will likely be able to outperform their competition and respond more quickly to their customers’ needs. The data avalanche is coming from a number of sources, such as enterprise resource planning, orders, shipments, Weblogs, GPS data, radio-frequency identification, mobile devices, and social channels; and there is value to be created in all areas of a business by adopting a data-driven culture.

However, in discussions about big data’s arrival, we sometimes forget to ask how effectively we’re converting the data into value. Too often, huge investments in IT infrastructure coupled with sophisticated analytical and reporting software have delivered little value. Why? We often find it’s because companies are understaffed, or they may lack the analytics talent who know how to build links between the data and the value drivers. There is also a gap between finding insights from data and then applying the insights to create value. That is where the levels of training and experience of a company’s analysts enter the equation.

One area of particular concern is supply chain management (SCM). A company’s SCM organization makes decisions about build plans, stocking locations, inventory levels, and so forth based on the conversion of raw data about demand, sales, and inventory on hand. And when there’s a shortage of analytics talent, SCM is typically one of the first areas affected. Traditionally, analytical innovation happens in two ways: either through an internal-pipeline process of developing junior analysts into senior analysts or by periodically bringing in external experts to seed knowledge. But big data is challenging both approaches.

The internal pipeline is challenged by a workforce marked by shorter tenures. Shorter tenures result
in more generalists in the workforce, often in place of the specialists needed for analytical innovation. For example, younger workers, such as millennials, are significantly less likely to settle into a long career at a company. According to a survey by Future Workplace, 91% of millennials (born in the 1980s and ’90s) expect to stay in a job for less than three years (Meister 2012), meaning that those in analytical roles are usually in the job only long enough to execute established analytics—and not long enough to develop a holistic understanding of how data can be applied to drive business value. As a result, those on the business side and those on the IT side don’t always learn to make the end-to-end connections between raw data and measurable value. The internal-pipeline approach is further challenged by companies themselves: frustrated by high turnover, companies are less likely to invest in developing their people— only to watch the people leave for higher-paying positions.

The second approach—that of periodically bringing in external experts to rebuild a process or implement the latest software package—is also starting to show wear. The evolution cycle of new analytical techniques is rapidly slowing down as big data brings opportunities to better integrate internal and external data sources. Traditionally, companies have been able to implement software solutions or bring in experts to install the latest offering and then profit from that investment for five or seven years. The initial cost was justified by the continued value for years to come. But now, the volume, variety, and velocity of the new data being generated are changing the business landscape by calling for a more rapid cycle of analytical-tool introduction. And that landscape itself usually changes every two or three years. So, as a result, the days of big-bang projects appear to be coming to an end.

What can be done? Companies should look across the entire supply chain—or across any function,
for that matter—and measure the amount of data being generated. Then they should weigh that measurement against the value actually realized. If data volumes are growing more rapidly than the corresponding increase in value, there may be an analytics talent challenge.

Three methods of creating value have proved effective in today’s rapidly changing market.

1. Outsourcing portions of analytic requirements

Companies can approach analytics outsourcing in a variety of ways, ranging from a data prep model—in which a company hires a third party to process raw data to the point where an analyst can consume it— all the way to a fully outsourced model, in which a third party processes and analyzes the data, poten- tially adds other proprietary data, and sends back fully actionable information. The data prep model enables a company to focus a limited pool of analysts on the critical knowledge-capture portion of the process and thereby free up time spent on non-value- added processes. The fully outsourced model enables companies to stay up-to-date on the latest technol- ogies and software without having to make up-front investments to purchase the latest software and technology.

2. Creating central analytics teams

Companies that rely heavily on converting data to knowledge can set up an analytic group focused solely on solving analytical issues across the company. Such companies have adopted analytics
as a core differentiator and encourage analysts to develop the holistic view that facilitates insight. Central analytics groups seem to perform better than embedded groups—and especially when they report through the business side. Of course, maintaining a group dedicated to analytics is an investment that some companies may hesitate to make, but there is tremendous value in having such in-house expertise.

3. Partnering with academic or not-for-profit institutions

Academic and nonprofit organizations are often-overlooked resources. For instance, the brand-new Center for Supply Chain Management at the University of Pittsburgh intends to provide student and faculty interactions with industry representatives who will promote experience-based learning activities within the university’s supply chain management courses. To improve the center’s effectiveness, the university plans to create a Supply Chain Management Industry Council composed of member companies dedicated to SCM. The council members, along with tenured faculty specializing in teaching SCM, will foster interest and excellence in SCM and analysis. Other institutions offer training, certifications, and conferences that encourage and enable analysts to further develop and share ideas. The Institute for Operations Research and the Management Sciences recently introduced the Certified Analytics Profes- sional certification to give companies an option for developing their people without having to make hefty investments in training organizations.

Big data is fundamentally transforming the way business operates. It is enabling management to track the previously untrackable, forecast the previ- ously unpredictable, and understand interactions between suppliers and customers—all of it with unprecedented clarity. And winning organizations will invest in the necessary infrastructure and people to harness the transformative power of data.

New approaches to start-ups can unlock mega-trend opportunities.

BY MIKE NOONEN, Silicon Catalyst, San Jose, CA; SCOTT JONES and NORD SAMUELSON, AlixPartners, San Francisco, CA

The semiconductor industry returned growth and reached record revenues in 2013, breaking $300 billion for the first time after the industry had contracted in 2011 and 2012 (FIGURE 1).

FIGURE 1. Worldwide semiconductor revenue. Source: World Semiconductor Trade Statistics, February 2014.

FIGURE 1. Worldwide semiconductor revenue. Source: World Semiconductor Trade Statistics, February 2014.

However, even with that return to growth, underlying trends in the semiconductor industry are disturbing: The semiconductor cycle continues its gyrations, but overall growth is slowing. And despite 5% year-on-year revenue growth in 2013 (the highest since 2010), the expectation is that semiconductor growth will likely continue to be at a rate below its long-term trend of 8 to 10% for the next three to five years (FIGURE 2). An AlixPartners 2014 publication , Cashing In with Chips, showed that semiconductor industry growth had slowed to roughly half of its long-term growth average since the 2010 recovery—with no expectation that it will return to historical growth until at least 2017. Other studies have also shownthat semiconductor growth has slowed not only relative to its previous performance but also versus growth in other industries. And a study conducted by New York University’s Stern School of Business[1] found that the semiconductor industry’s revenue growth lagged the average revenue growth of all industries and ranked 60th out of 94 industries surveyed. Surprisingly, the industry’s net income growth of semiconductor companies lagged even further behind—ranking 84th out of 94 companies surveyed—and had actually been negative during the previous five years.

FIGURE 2. Semiconductor revenue growth. Sources: Semiconductor Industry Association and AlixPartners research.

FIGURE 2. Semiconductor revenue growth. Sources: Semiconductor Industry Association and AlixPartners research.

In another study released by AlixPartners that looked at a broader picture of the semiconductor value chain, including areas such as equipment suppliers and packaging and test companies, the research showed that outside of the top 5 companies, the remainder of the 186 companies surveyed had declining earnings before interest, taxes, depreciation, and amortization (FIGURE 3).

FIGURE 3. Spotlight on the top five (fiscal year 2012). Source: AlixPartners Research.

FIGURE 3. Spotlight on the top five (fiscal year 2012). Source: AlixPartners Research.

As revenue growth slows, costs increase at a rapid rate

As semiconductor technology advances, the cost of developing a system on chip (SoC) has risen dramatically for leading-edge process technologies. Semico Research has estimated that the total cost of an SoC development, design, intellectual property (IP) procurement, software, testing has tripled from 40/45 nanometers (nm) to 20 nm and could exceed $250 million for future 10-nm designs(FIGURE 4) [2]. This does not bode well for an economic progression of Moore’s law, and it means that very few applications will have the volume and pricing power to afford such outlandish investment. If we assume that a 28nm SoC can achieve a 20% market share and 50% gross margins, the end market would have to be worth over $1 billion to recoup R&D costs of $100 million. By 10 nm, end markets would have to result in more than $2.5 billion to recoup projected development costs. With few end markets capable of supporting that high a level of development costs, the number of companies willing to invest in SoCs on the leading edge will likely decline significantly each generation.

FIGURE 4. Development Costs are Skyrocketing. Source: Semico Research Corp.

FIGURE 4. Development Costs are Skyrocketing. Source: Semico Research Corp.

What happened to semiconductor start- ups?

The history of the semiconductor industry has been shaped by the semiconductor start-up. Going back to Fairchild, the start-up has been the driving force for growth and innovation. Start-ups helped shape the industry, and they are now some of the largest and most successful companies in the industry. But the environment that lasted from the 1960s until the early 2000s—and that made the success of those companies possible—has changed dramatically. The number of venture capital investments in new semiconductor start-ups in the United States has fallen dramatically, from 50 per year to the low single digits (FIGURE 5). And even though that drop is not as dramatic in other countries — such as China and Israel — it is indicative of an overall lack of investment in semiconductors.

FIGURE 5. Number of seed/series a deals. Source: Global Semiconductor Alliance.

FIGURE 5. Number of seed/series a deals. Source: Global Semiconductor Alliance.

The main reason for the decline is the attractiveness of other businesses for the same investment. In the fourth quarter of 2013, nearly 400 software start-ups received almost $3 billion of funding, whereas only 25 semiconductor start-ups received just $178 million (representing all stages) (FIGURE 6). It seems that (1) the lower cost of starting a software company, (2) the relatively short time frame to realize revenue, and (3) attractive initial-public-offering and acquisition markets possibly make the software start-up segment more interesting than semiconductors.

FIGURE 6. Funding of software and semiconductor start- ups. Source: PwC, US Investments by Industry/Q4 2013.

FIGURE 6. Funding of software and semiconductor start- ups. Source: PwC, US Investments by Industry/Q4 2013.

This situation is unfortunate and has conspired to create a vicious and downward cycle (FIGURE 7).

  • Lack of investment limits start-ups
  • Lack of start-ups limits innovation
  • Lack of innovation and fewer start-ups limits the number of potential acquisition targets for established companies.
  • Reduced potential acquisition targets in turn limit returns for companies and returns for those who would have invested in start-ups.
  • Limited returns make future investments less likely and continue the cycle of less innovation and lower investment [3]. 
FIGURE 7. A vicious cycle limits innovation.

FIGURE 7. A vicious cycle limits innovation.

Therefore, it is reasonable to conclude that the demise of semiconductor start-ups is a contributing cause to the lackluster results of the overall semiconductor industry. And that demise and those lackluster results are further exacerbated by the rise of activist shareholders who demand a more rapid return on their investment, which possibly reduces the potential for innovation in an industry that has lengthy development cycles.

What about other industries?

It is tempting to think that the semiconductor industry is alone in this predicament, but other industries face similar challenges and have figured out accretive paths forward. For example, biotechnology has some of the same issues:

  • An industry that grows by bringing innovation to market 
  • Similarly lengthy development cycles 
  • Potentially capital intensive at the research and production stages

In addition, the biotech industry faces a challenge the semiconductor world does not — namely, the need for government regulatory approval before moving to production and then volume sales. Gaining that regulatory approval is a go-to-market hurdle that can add years and uncertainty to a product cycle.

However, in spite of its similarities to the semiconductor business and the added regulatory hurdles, the biotech industry enjoys a very healthy venture-funding and start-up environment. In fact, in the fourth quarter of 2013 in the United States, biotech was the second-largest business sector for venture funding in both dollars and total number of deals (FIGURE 8).

FIGURE 8. Funding of software and semiconductor start- ups. Source: PwC, US Investments by Industry/Q4 2013.

FIGURE 8. Funding of software and semiconductor start- ups. Source: PwC, US Investments by Industry/Q4 2013.

Why is this? What do biotech executives, entre- preneurs, and investors know that the semiconductor industry can take advantage of? There are several lessons to be learned.

  • Big biotech companies have made investing, cultivating, and acquiring start-ups key parts of their innovation and product development processes. 
  • Biotech and venture investors identify interesting problems to solve and then match the problems to skilled and passionate entrepreneurs to solve them.
  • Those entrepreneurs are motivated to create and develop solutions much faster and usually more frugally than if they were working inside a large company.
  • The entrepreneurs and investors are creating businesses to be acquired versus creating businesses that will rival major industry players.
  • The acquiring companies apply their manufacturing economies of scale and well-estab- lished sales and marketing strategies to rapidly— and profitably—bring the newly acquired solutions to market.

For several reasons, certain megatrends are driving the high-technology sector and the economy as a whole, and all of them are enabled by semiconductor innovation (FIGURE 9). Among the major trends:

  • Mobile computing will likely continue to merge functions and drive computing power.
  • Security concerns appear to be increasing at all levels: government, enterprise, and personal.
  • Cloud computing will possibly cause an upheaval in information technology.
  • Personalization through technology and logistics appears to be on the rise.
  • Energy efficiency is likely need for sustainability and lower cost of ownership.
  • Next generation wireless will likely be driven by insatiable coverage and bandwidth needs.
  • The Internet of things will likely lead to mobile processing at low power with ubiquitous radio frequency.
FIGURE 9. Global internet device installed base forecast. Sources: Gartner, IDC, Strategy Analytics, Machina Research, company filings, BII estimates.

FIGURE 9. Global internet device installed base forecast. Sources: Gartner, IDC, Strategy Analytics, Machina Research, company filings, BII estimates.

The Internet of Things megatrend alone will result in a tremendous amount of new semiconductor innovation that in turn will likely lead to volume markets. Cisco Systems CEO John Chambers has predicted a $19-trillion market by 2020 resulting from Internet of Things applications [4].

Does it really cost $100 million to start a semiconductor company?

The prevailing conventional wisdom is that it takes $100 million to start a new semiconductor company, and in some cases that covers only the cost of a silicon development. It is true that recently, several companies have spent eight- or nine-figure sums of money to develop their products, but those are very much exceptions. The reality is that most semiconductor development is not at the bleeding edge, nor is the development of billion-transistor SoCs.

The majority of design starts in 2013 were in .13 μm, and this year, 65, 55, 45, and 40nm are all growing (FIGURE 10). These technologies are becoming very affordable as they mature. And costs will likely continue to decrease as more capacity becomes available once new companies enter the foundry business and as former DRAM vendors in Taiwan and new fab in China come online.

FIGURE 10: .13um has the most design starts; 65nm and 45nm have yet to peak.

FIGURE 10: .13um has the most design starts; 65nm and 45nm have yet to peak.

Another thing to consider is whether a new company would sell solutions that use existing technology or platforms (i.e., a chipless start-up) or whether a company would choose to originate IP that enables functionality for incorporation into another integrated circuit.

A chipless start-up would add value to an existing architecture or platform. It could be an algorithm or an application-specific solution on, say, a field-programmable gate array, a microcontroller unit or an application-specific standard product. It could also be service based on an existing hardware platform.

A company developing innovative new functionality for inclusion into another SoC paves a path to getting to revenue quickly. Such IP solution providers would supply functionality for integration not only into a larger SoC but also into the emerging market for 2.5-D and 3-D applications.

In both situations (the chipless start-up and the IP provider), significant cost may be avoided by the use of existing technology or the absence of the need to build infrastructure or capabilities already provided by partners. In addition, those paths have much faster times to revenue as well as inherently lower burn rates, which are conducive to higher returns for investors.

Even for start-ups that intend to develop leading-edge multicore SoCs, a $100-million investment is not inevitable. Take, for example, Adapteva, an innovative start-up in Lexington, Massachusetts. Founded by Andreas Olofsson, Adapteva has developed a 64-core parallel processing solution in 28 nm. The processor is the highest gigaflops/watt solution available today, beating solutions from much larger and more-established companies. However, Adapteva has raised only about $5 million to date, a good portion of which funding was crowd sourced on the Kickstarter Web site. This just shows that even a leading-edge multicore SoC can be developed cost-effectively—and effectively—through the use of multiproject wafers and other frugal methods.

Several conclusions can be drawn at this point.

  • Even though the semiconductor industry is growing again, the underlying trends for profitability and growth are not encouraging. 
  • Cost development is increasingly rapid on leading-edge SoCs. 
  • Historically, start-ups have been engines of innovation of growth and innovation for semiconductors. 
  • In recent years, venture funding for new semiconductor companies has almost completely dried up. 
  • That lack of investment of semiconductor start-ups has contributed to a downward and vicious cycle that will further erode the economics of semiconductor companies. 
  • The biotechnology industry has many parallels to the semiconductor. Interestingly, biotechnology has a relatively thriving venture funding and start-up environment, and we can apply that industry’s successful approach to semiconductors. 
  • Despite the state of start-ups, it is now one of the most exciting times to be in semiconductors because most of the megatrends driving the economy are either enabled by or dependent on semiconductor innovation. 
  • It does not need to take $100 million to start the typical semiconductor company, because a great deal of innovation will use very affordable technologies, and come from chipless start-ups or IP providers that have much lower burn rates and ties to revenue.
  • Even leading-edge multicore SoCs can be developed frugally (for single-digit millions of dollars) and profitably. 

References

1. http://people.stern.nyu.edu/adamodar/New_Home_ Page/datafile/histgr.html

2. SoC Silicon and Software Design Cost Analysis: Costs for Higher Complexity Continue to Rise SC102-13 May 2013.

3. AlixPartners and Silicon Catalyst analysis and experi- ence.

4. Cisco Systems public statements.

SEMI today announced the launch of the association’s first-ever event in Latin America. The inaugural SEMI South America Semiconductor Strategy Summit will be held November 18-20, 2014, at the Hilton Buenos Aires in Buenos Aires, Argentina. Argentina-based Unitec Blue and the Brazil Development Bank BNDES are supporting the event.

The growing strength of Latin American markets is driving interest and investment in electronics manufacturing in South America. Device manufacturers, including Unitec Blue in Argentina, and SIX Semicondutores and CEITEC in Brazil, are established and planning new investments in front- and back-end manufacturing capabilities. With the continued globalization of the microelectronics industry, and localization of manufacturing capabilities within growing electronic markets, the South American market presents new opportunities for supply chain companies.

“We are pleased to announce this new project and excited by the opportunities in Latin America for our members,” said Bettina Weiss, vice president of business development for SEMI. “We are especially grateful to Unitec Blue and BNDES for their support of this inaugural event, as it shows the clear intent of the device maker community in South America to attract new investment and drive industry expansion in the region.”

The three-day event includes a delegation tour of the Unitec Blue facilities in Buenos Aires, and a full two-day conference featuring presentations and panel discussions from industry leaders, analysts, and government representatives. The conference will provide overviews of the current industry environment in South America, address the challenges and opportunities for supply chain companies in the region, and explore the next steps in building the region’s microelectronics industry infrastructure.

The SEMI South America Semiconductor Strategy Summit follows the successful launch of a similar event in Vietnam last year, which was the first SEMI venture in that emerging market. “By taking small, but significant steps in new and emerging markets, SEMI is strategically working to open doors for our members to help them explore new opportunities when markets emerge,” said Weiss. “Events like the SEMI South America Semiconductor Strategy Summit bring together global and regional industry leaders and helps foster the connections and relationships that hopefully lead to business and market growth.”

Registration for the SEMI South America Semiconductor Strategy Summit costs US$ 350. Registration, agenda, and sponsorship information is available online at www.semi.org/southamerica.