Today is the official opening of the annual SEMICON West event in San Francisco, CA, which runs through July 11 and focuses on a critical set of technologies in our industry: semiconductors, photovoltaics (PV), micro-electromechanical systems (MEMS), LEDs, solid state lighting (SSL), printed and flexible electronics, nano-electronics, and related technologies.
At SEMICON West over 30,000 attendees will see 680 companies exhibiting from 23 countries and attend numerous panels and keynotes dedicated to discussions and problem solving around the technology and process challenges that our industry faces.
The R&D challenges
Scaling product down continues to pose challenges. With Moore's Law being pushed harder and faster towards what may be a possible halt due to the challenges we face with design, equipment, costs, materials, and manufacturing processes, SEMICON West may offer significant discussions and insights. Importantly, one growing trend on the R&D side is the growth of consortia and collaboration. This collaborative mindset is widening in scope compared to our industry's history, as we come to realize the challenges at 450mm and beyond the 20nm node architectures are not only increasingly complex but also costly. The R&D panel discussion should provide important updates on how our industry is working together to solve challenges for the benefit of industry-wide forward momentum in IC design and manufacturing.
As Ajit Manocha, CEO Globalfoundries, offered in his opening keynote, the current foundry model is, along with R&D collaboration, shifting and in need of similarly expanded cooperation from the initial technology definition level, to the architecting, manufacturing, and on through packaging and IP suppliers. "'Collaborative device manufacturing partnerships' will evolve that revise the true spirit of win-win on which the fabless/foundry models has always been based."
Wider supply chain changes
The importance of the challenges facing IC manufacturing are not limited to any one sector, and while the industry continues to benefit from the strength of mobility demand, the continuation of innovative designs does rest on what the hardware solutions can offer. The pressures of the R&D challenges today are affecting the entire design and production supply chain. In turn, not only are these new collaborative models for R&D gaining acceptance, but also the traditional manufacturing supply chain is experiencing changes.
We have clearly seen the shifts along the supply chain as a result of the PC-era shift, and manufacturers and downstream partners alike vie for a more tightly bound set of opportunities in a challenged global marketplace. With emerging markets opening for price- and feature-targeted mobile devices, competition between whitebox and Tier 1 manufacturers has increased with the defining criteria coming down to features, services, and pricing, all of which point back to the hardware design and integrated software capabilities. The business and technology challenges are notable.
Related to this market challenge, tomorrow's executive panel will explore in "A Promising but Challenging Future," the ability for the industry to continue to succeed and grow in profitability will depend quite critically on the ability to jointly determine the best paths forward. The present convergence of manufacturing technologies such as FinFETs, 3D-ICs, 450mm, and EUV, each of which hold tremendous promise as we move to and through the 20nm node, bring along challenges that really require collaboration in order to succeed as an industry, not just as a set of healthy, competitive supply chains within the industry.
While challenges are plenty, the growth trajectory across the technologies being featured at SEMICON West this week are strong. Not only do we see technologies gain in adoption across markets (e.g., MEMS, nano-technologies, LED, SSL, 3D-ICs, FinFETs, etc.), SEMI recently released the latest semiconductor equipment sales forecasts. According to SEMI, 2014 promises a 21% increase in chip manufacturing spending, rising to US $43.98 billion:
Key drivers for equipment spending are significant NAND Flash fab investments by Samsung in China and Toshiba/Sandisk in Japan, and investments by Intel, including its fabs in Ireland. Most major regions of the world will see significant equipment spending increases. Front-end wafer processing equipment will grow 24 percent in 2014 to $35.59 billion, up from $28.70 billion in 2013. Test equipment and assembly and packaging equipment will also experience growth next year, rising to $3.18 billion (+6 percent) and $2.9 billion (+14 percent), respectively. The forecast indicates that next year will be the second largest spending year ever, surpassed only by $47.7 billion spent in 2000.
This level and breadth of investment adds strength to the anticipated resumption of growth for the semiconductor and electronics industry. While the dynamics of our supply chains continue to shift, these shifts are healthy and in synch with the challenges and opportunities faced from the next level of innovative R&D, materials, and technologies, all of which are on display and being discussed starting today at SEMICON West 2013. It promises to be an interesting week, stay tuned.