You get what you pay for
07/01/2006
When it comes, what will have been the total cost of the cure for cancer? What is the cost to discover and bring to market a single blockbuster drug? Way too much to calculate would be the answer to the first. Right around $1 billion dollars right now for the second.
What will be the total cost of the first autonomous nanotechnotic surgical device? What is the cost of a 300 mm semiconductor fab? Again, incalculable for the first. Around $2.5 billion for the second.
The cost of maintaining the steady advancement of technology has become truly overwhelming. The challenge faced by companies attempting to continue to make the required R&D investment at all levels of the technology chain while maintaining profitability levels adequate to continue the re-investment is likewise rapidly becoming insurmountable.
On the healthcare side, although the public laments the exponentially increasing cost of new bio/pharmaceutical products and associated health insurance premiums, much of the cost of new research and investment is nevertheless still being passed along.
This is not currently true of the electronics industry. SEMI has reported that the R&D funding gap (the gap between keeping up with Moore’s law and industry funding) could reach $5.8 billion by 2010 and $9.3 billion if the transition to 450 mm technology occurs. In the equipment and materials sector, the funding gap could reach $20 billion by 2010. Something’s gotta give.
First of all, SEMI should be applauded for taking a strong advocacy stand on the pending Competitiveness and Innovation legislation now in Congressional Committee. The legislation includes a permanent and retroactive extension of the R&D tax credit. This is an essential element of any plan to continue the pace of technology advancement in the electronics industry.
Other initiatives and suggestions should also be embraced, such as finding innovative ways to improve the cost-effectiveness of R&D, longer-term and detailed planning, and increased collaboration both between chipmakers and between chipmakers and suppliers. This is certainly one place where the contamination-control community can play a major role-proactively reaching out to both end users and process toolmakers to offer joint technology development strategies for tightly integrated equipment solutions.
Ultimately, however, the reality cannot be ignored that more advanced technology will necessarily come with increased costs up and down the chain, and these costs must culminate with higher prices for end products to the consumer. To maintain a sound and realistic business model going forward, the semiconductor industry, its suppliers as well as its customers, must begin aggressively adopting value-selling principles in their marketing and sales strategies as opposed to the current “same-for-less” approach.
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John Haystead
Editor in Chief