Five top insiders shared their perspective on topics ranging from supply chains to government regulation at yesterday afternoon’s well attended Executive Summit. The panelists included Keith Barnes, chairman, CEO and president of Verigy; Stephen Newberry, president and CEO of Lam Research; Thomas Sonderman, vice president, manufacturing systems and technology at GlobalFoundries; Randhir Thakur, executive vice president, general manager of silicon systems at Applied Materials; and Rick Wallace, CEO of KLA-Tencor. Jonathan Davis, president of SEMI North America, moderated.
The market at a glance
The session started off with each panelist describing his take on the current state of the industry. “We’re seeing a considerably better year than last in the non-memory side and for systems not related to memory,” Barnes said. “We’re still going to need another year for increased sales in memory.”
Newberry feels there is too much emphasis on percentage increases over a single year and instead prefers to hear about average growth, or declines, over a two-year period. “This is a foundry catch-up year,” he said.
Thakur joked how it must be a good year, since a customer (GlobalFoundries’ Sonderman) was sitting on the panel with them. Thakur concurred that the memory market was lagging and Wallace noted that in spite of recent consolidations, there has been expansion in foundry space. “The challenge for all of us,” he said, “is investment in capital and R&D.”
Sonderman saw manufacturing as cautiously optimistic. That said, he told how GlobalFoundries is building a new facility in Malta, N.Y.
Witness to change
When asked what changes he’s seen in the industry, Wallace said he’s afraid that key players are unlearning the past. The key change Thakur noted was the focus on supply chains and the increased pressure on that mechanism. Barnes concurred, recommending a tight relationship be maintained with supply chains, saying, “While the front end of the supply chain is volatile, the back end is like a bullwhip.”
Wallace agreed with Barnes on how the bullwhip effect can harm his suppliers. Wallace also wasn’t convinced that consolidation in the industry would drive rationality. “It only takes two guys to not be rational,” he said.
Macroeconomic issues concerned Sonderman, but he believes the ability to ramp up or slow down will help his company.
What’s next?
Newberry said 3D IC is going to come to full fruition when he was asked about innovation. Plating was so important to Thakur and Applied Materials that they acquired plating technology instead of pursuing a collaborative effort.
Sonderman sees the most manufacturable next generation of lithography as being the one that will win. However, Wallace said there will be multiple solutions to lithography.
Diversification
Davis asked if there will be enough concentration on R&D as companies diversify. Wallace said all companies can invest in multiple opportunities, but he was concerned that talent might be hard to distribute. “Losing talent will slow us down,” he said.
Sonderman agreed, as did an applauding audience member, saying that diversification issues come into play when trying to get good people. “It’s harder to get people to rejoin manufacturing,” Sonderman said. “I fear we’ll run out of smart people to run our factories here.”
Market drivers
“Are we doing enough as a country or an industry to diversify us enough for a growth situation?” Barnes shot back when asked about growth trends.
Newberry was concerned about a company not losing sight of its shareholders and felt too much time was being spent dealing with regulation and bureaucracy. Sonderman concurred, saying that there is over-regulation for U.S. companies and that more manufacturing needs to take place here. Thakur took a more macro approach, saying that as long as products and people can ethically flow in and out of countries, the industry is in good shape.
Wallace felt the U.S. government was apathetic about losing business to other countries because of unskilled domestic workers, especially in light of the deteriorating state of K–12 education. “We’re systematically driving high-tech away,” he said. “There’s no silicon left in Silicon Valley.”
— Arthur Patterson, SEMICON West Daily News