These are exciting problems to have and certainly ones that will provide the type of organic, industry-internal growth. This growth will help keep our industry strong assuming that the present forward momentum we see in the macro-economic situation continues and that the positive industry forecasts hold for both well-controlled, if not potentially short, inventory levels and for solid demand and pricing (see here for iSuppli's latest industry report).
There's no abatement in demand for smart wireless devices (SWD) (from smartphones to tablets, readers and ultrabooks), rather the penetration rate and move from feature phones to smart phones is forecasted to increase. At the heart of the demand drivers is the broadening of user bases as the line between high-end consumers and enterprise users begins to blur with enterprises supporting their employees' device autonomy. When we think about who is using a device, who the market it, the next and perhaps most important question is how that user will use the device. Again, the blurring of the line becomes obvious and we point back to the incredible surge in data creation, manipulation, and storage across all ages and types of users.
Both generating, manipulating and managing today's plethora of data relies on machine-to-machine (M2M) communication as a central capability of electronics devices. And so we start turning back to our starting point of what is happening at the device design level. As form factors begin to constrain device differentiation, the increasingly rich feature offerings and the quest for better and better connectivity open the door for greater differentiation on the software and semiconductor fronts.
In response, chipset designs and architectures are changing. Specific changes include: the relationships between software and hardware in the design roadmap for devices; the increasingly heterogeneous structure and complexity of chips; and the rise of complex application specific integrated circuit (ASIC) designs for the system on chip (SoC) market (see this from ElectroIQ), which is set to boom with the adoption of 2.5D and 3D stacking (see here for more on 3D adoption from Semiconductor Manufacturing & Design). The implications of these new design trends are critical to understanding the growth trajectory and structural changes in our industry; as such, Smith provides in-depth analysis on these topics in our most recent MarketWatch Quarterly being sent to subscribers (free) this week, or in mid-April to the public here.
While stacking 2x-nm and 300mm+ wafers are at the leading edge still, the realities of design at these new architectures and with these yield changes is already having an impact on the competitive landscape along the semiconductor and electronics industry supply chain. The ability to spend at astronomical CAPEX levels finds a counterweight in the demand for well-integrated software-hardware teams to design for these new integrated chipsets, and find successful means to integrate and to reuse IP in order to make specifically designed chipsets adaptable for more uses. Certainly the ODM and EMS sector will see significant relationship and role changes, which will offer new competitive opportunities along the supply chain (learn more from the latest edition of Smith's MarketWatch Quarterly available tomorrow with a free subscription!)