Entering the fourth quarter seems an appropriate time to take a broader view of the semiconductor and electronics industry. Since CES at the beginning of the year, we've held hopes for the promises that new chip architectures might hold to improve not only functions and features in a slew of devices, but in so doing also spur demand and set us solidly on track to renewed growth cycles. Growth cycles have run the gamut from absent to tenuous in some sub-markets to strong but uncertain of long-running sustainability for others.
The latest Smith MarketWatch Quarterly issue considers the important question of the major processor roadmaps and the underpinning design innovation (to be released this week to subscribers free). Are we guided by end-device demands or are we seeing chip design innovation that can meet today's demands while carving future paths beyond the present devices? In many ways, this is our latest chicken-and-egg question and really warrants consideration if we are to devise solid, strategic roadmaps along the supply chain. Not only do demand changes alter supply chain relationships, so do device and component changes; witness the recent increase in merger and acquisition (M&A) rates if you had a question as to the extent of supply chain changes currently transforming our industry.
Small changes make big splashes
Looking beyond the more in-depth processor roadmap discussion in the upcoming Smith MarketWatch Quarterly, there are significant indicators pointing to the solid growth opportunities ahead. The innovative core (pun intended) of the growth opportunities for the semiconductor and electronics industry is small – physically small. It is not just about shrinking architectures down into the 1x-nm levels, it is about the complex integration of System on Chips (SoCs) and System in Packages (SiPs) that are truly moving into a next phase of sophistication and design growth. The great success comes in the multiple paths to smaller chip architectures that are able to house multiple ICs to handle multiple demands and coordinated through central processors with flexibility for customization by OEM and/or devices.
The continued move to more complex chip architectures in smaller footprints is certainly not new, but the realization and level of commitment by leading chip manufacturers to this roadmap is newly confirmed from recent conferences and press releases.
The opportunities from the upcoming set of new chips, SoCs, SiPs, processors, and ICs is richly broad in application across industries (see this material innovation that holds promise for chip design). Notable opportunities include wearable electronics, a category which itself spans many verticals. From medical, automotive, to various consumer applications for commoditized products to meet the various information and entertainment CE demands, to the ability to improve business processes and operations through increasingly sophisticated, electronic tools for industrial applications, big growth is on the horizon from small packages (see the upcoming Smith MarketWatch Quarterly for a detailed discussion of industrial tool and supply chain changes).