Industry Future Looks Solid, Says SEMI
The SEMICON Show Daily interviewed Jonathan Davis, president, Global Semiconductor Business, at SEMI, and asked for his perspective on the state of the global semiconductor business.
SEMICON Show Daily: What’s defining the semiconductor business today?
Jonathan Davis: The industry is going great – this is the first time the industry has crossed the $300 billion mark. We expect to see continued growth for the next three years, and we see investments not just in foundries for flash memory, but for the new technologies that are driving advanced devices.
The commitment to ongoing R&D investment is critical to this industry because new technologies are expensive to develop. In fact, they are so expensive now that alliances and consortia are the only way to continue this advancement, as few if any companies can alone expend the capital required.
SSD: What are the biggest issues facing the industry today, and how are they being addressed?
JD: There is a plethora of issues. There’s 3D — not only the movement to 3D device structures, but also the challenges of 3D packaging as it becomes critical to multilevel stacking and smaller die footprints. Both of these areas demand investment in R&D and innovation to bring them to market. Of course, next-generation lithography — EUV — is and has been a hot topic. The engineering that has kept current lithography techniques advancing far beyond what was expected is nearing its limit, so EUV investment is rising — but it’s a significant amount of investment. There’s also the transition to 450mm diameter wafers. Discussions on the transition began a number of years ago, but we’ve seen that it will be a very expensive one that needs a lot of forethought and planning to happen efficiently.
SSD: How big an impact is there from new personal computing and communicating devices, and have these offset the general worldwide slowdown in PC unit growth?
JD: I think the fascinating inflection point here is the development and adoption of tablets, pads and their technology. These products, with their global, local, and social capabilities, are changing the markets for computing products. The demand for semiconductor devices continues to rise worldwide; any slowing of growth in one area is usually offset by a rise in another. We’re seeing the prospect of continued growth – even improved growth – in emerging markets, and we expect the number of transistors sold each year to continue to increase.
SSD: The SEMI book-to-bill ratio was above 1.0 from July of 2009 to September of 2010, but it has slipped back under 1.0 for the eight months since then. Is this a cause for concern?
JD: No, not at all. The book-to-bill ratio, released each month by the SEMI Industry Research and Statistics group, was well above 1.0 for the period you mentioned because the entire industry had restrained its capital expenditures before then. This run of positive book-to-bill numbers reflected the pent-up demand that existed for equipment and the need for fabs and foundries to continue their technology and capacity investments.
The recent book-to-bill numbers are just under 1.0, which reflects a near-steady state of balanced resources and investment, and it also reflects the time needed for the industry to absorb the capital equipment they purchased during the mid-2009 to mid-2010 timeframe.
SSD: What lasting effect has the earthquake and subsequent tsunami that struck Japan on March 11, 2011, had on the semiconductor manufacturing industry?
JD: First, the earthquake and tsunami that devastated the TÅhoku area of Japan in March was a terrible human tragedy. We’re proud that SEMI staff, SEMI members, and friends raised over $50,000 for the SEMI Japan earthquake relief fund, all of which went directly to help those afflicted.
The semiconductor industry has recovered well. The majority of the semiconductor processing facilities in Japan were unaffected, but supply chains did get adjusted as manufacturers worked though inventory, relied on second sources, and spread their production and mixes across their global facilities. Japan is the world’s largest producer of chips, and the world’s largest market for semiconductor manufacturing equipment, so there was the risk of serious global disruption, but that has not come to pass.
And importantly, the semiconductor industry is one that learns — and spreads information – quickly. Lessons learned — from preparedness, to infrastructure rethinking, to second sourcing optimization — have already been implemented. Companies have been more than willing to share knowledge, advice, and best practices information around the world to ensure that they are prepared as possible when another natural event happens.