Joanne Itow's blog

Although news from Japan regarding the earthquake and tsunami recovery efforts comes less frequently than before, the ripple effects of the disaster can still be felt in the semiconductor industry’s operation strategies.

At the GSA Ecosystem Summit held in Santa Clara last week, Hugh Durdan from eSilicon moderated a panel on the best practices for successful supply chain relationships.  IBM, Intel, Qualcomm and Tensoft, Inc weighed in on some of the changes they’ve implemented since the disaster in Japan.  IBM’s Dale Miller said they’ve made some very subtle changes looking at the whole system.  IBM looks at their needs over a 2-year horizon, not just one year.  They take a longer forecast approach to plan for capacity needs and that involves getting closer to both suppliers and customers.

Intel ‘s Tim Lloyd said they created a hierarchy of suppliers looking at both their upside and downside capabilities.  A blanket increase in capacity, without a corresponding needs assessment, doesn’t always mitigate risk.  The supply chain reaction should be significantly different depending on if the change is due to an overall shift in the industry or limited to one company’s market share.

They all agreed that better communication with customers and suppliers is critical in today’s environment but the question now is how much information do you provide them?

Last week Semico released its industry forecast outlook for the balance of 2011 and 2012. Unfortunately, all the indicators have moved 2011 into the negative territory. Semiconductor sales will end the year 1.6% lower than 2010. That should not be too surprising as the Semico IPI began moving down in May of 2010, warning us of a sluggish second half 2011. The economic malaise, along with the natural disasters around the world has only made semiconductor sales even more challenging.

The good news is that the Semico IPI points to a bottom in the first quarter 2012. Not only are all the economic and supply chain indicators pointing to a better 2012, but it is also consistent with the industry technology cycles. Intel is rolling out their 22nm process technology by the end of this year. GLOBALFOUNDRIES and TSMC are ready with their 28nm processes.

New technologies mean new products or at least new features for our existing electronics devices. In addition, the good news is that GLOBALFOUNDRIES remains committed to their capacity expansion and technology development plans. Fab expansions at their Fab 1 in Dresden and Fab 8 in New York remain on schedule. And at their recent GLOBALFOUNDRIES Technology Conference in Santa Clara, company executives proudly discussed their continued push to develop 20nm processes and even 14nm.

Another SEMICON West has come and gone.  This was a good year.  Although there are signs that things have slowed a bit, the general outlook was positive.  In addition to the need for more semiconductor capacity due to continued growth in tablets, cell phones and a host of other electronic applications, the increased complexity of advanced processes has created a positive outlook for equipment vendors.  More complexity has translated into more layers, more process steps, and more new equipment.  There continues to be significant interest in TSV, EUV, used equipment productivity and MEMS.  And finally, this year the discussion around 450mm wafers took a new turn.  It was not “if” it would happen but when and how.

On the heels of a highly spirited SEMICON West covering all the challenges of TSV, 450mm and EUV, it's great to hear how this industry can rally around a cause and accomplish what appears to be an impossible task. I’m referring to the monumental effort that was required to get the Renesas Naka facilities back up and running.
In the many briefings at SEMICON West, a few companies mentioned the contributions they made this year to the human relief effort in Japan’s recovery following the earthquake and tsunami. This week Renesas provided more information on the resumption of their fab operation and sent out messages of thanks to employees, customers, suppliers and competitors for all their support.

Renesas has 10 fabs in Japan, with one site suffering major work stoppage from the earthquake. The Naka site located in Ibaraki Prefecture accommodated a 200mm and 300mm fab, a wafer bump facility and two test facilities. Even though the site is 100 miles away from Fukushima, the hardest hit area, the Renesas Naka site suffered significant damage and had to be shut down. A week after the tragic earthquake, site inspections had to be completed with flashlights because there wasn’t any power to the facilities.

Last week Semico visited the GLOBALFOUNDRIES’ Fab 8 construction site and was impressed for several reasons. Not only is the infrastructure significant but the people and surrounding community have welcomed GLOBALFOUDNRIES, embraced the project as well as the invasion of businesses and people that go along with the project. This made our visit extremely pleasant and trouble-free.

The GLOBALFOUNDRIES fab is a multi-billion dollar facility that is on schedule and on budget! That’s noteworthy when we consider this is the first major project for the Luther Forest Technology Campus and a major portion of the infrastructure construction took place during the Upstate New York winter.

At the Semico Summit held May 2, 2011 in Phoenix, Az, one of the most lively discussions occurred during the panel Challenges at 28nm. Mahesh Tirupattur, Analog Bits brought out the best from the audience as well as panel members.

The convergence of mobility, communication and computing has produced multifunctional end applications that are placing huge demands on semiconductor manufacturers.  These new devices require low power, high performance, and a lot  of advanced manufacturing capacity at a low cost.

At the 2011 Semico Summit, Gregg Bartlett, Senior Vice President of Technology and Research and Development, GLOBALFOUNDRIES talked about the economics of innovation, highlighting the daunting economic and technology challenges to bring products to market.  Just a few of the major costs include the following:

• $1-2 billion in leading edge process technology development,
• 3-4 years of development,
• $40-$50 million in chip design costs,
• $250 million for design enablement such as libraries and IP,
• $5-$7 billion for an advanced 300mm fab.

Today’s market is a high stakes game.  Its no wonder that the industry has embraced a collaborative environment at all levels.

The semiconductor industry grabs headlines as companies such as Intel announce the construction of multi-billion-dollar state-of-the-art research and manufacturing facilities. High performance servers, PCs and most of our electronic devices would not exist today if it weren’t for the continual advancements made in semiconductor manufacturing technology. While the most advanced chips supply the processing power and memory needed to provide the functionality and capabilities of our newest mobile devices and home electronics, they are surrounded and supported by dozens of other non-leading edge or mainstream semiconductor devices that play a crucial role in the electronics industry but don’t garner the same level of attention.

The vast majority of these mainstream semiconductors are actually manufactured on something less than leading edge technologies. Analog devices, sensors, microcontrollers, optoelectronics, discretes, MEMS and a number of other semiconductor products comprise the largest markets in terms of semiconductor units.

It should come as no surprise that semiconductor foundry manufacturers are booming. The semiconductor industry has been transformed. But it's not just fabless versus IDM (Integrated Device Manufacturer). Revenue has shifted from Embedded MPUs, MCUs, DSPs and Standard Cell ASICs to Special Purpose Logic chips. Integration has taken over MOS Logic sales, creating a huge increase in the sales of fully integrated semiconductors. Most of these chips are being manufactured by foundries.

Let's take a closer look at MOS Logic markets over the last eleven years, beginning with the year 1999 rather than 2000 to eliminate the effects of the dot-com boom-and-bust in 2000 and 2001. From 1999 through 2010 Special Purpose Logic sales increased from $16.5 billion to $59.3 billion, a CAGR of 12.3%. During the same time period computing MPU sales grew from $27.2 billion to $38.8 billion, a CAGR of only 3.6%. No other MOS logic category had significant growth, either because the sales base was too low or because the CAGR was too low.

Special Purpose Logic is now by far the largest MOS Logic device category. Special Purpose Logic sales are greater than MPU, MCU and DSP sales combined and nearly five times the sales of standard cell ASICs and FPGAs combined. In fact, Special Purpose Logic sales in 2010 were greater than sales for any other semiconductor device type. What has happened?

On February 14th, 2011, Valentine’s Day, IBM will be debuting “Watson” as a contestant on the popular game show, Jeopardy!. Watson is a supercomputer powered by an IBM POWER7 server and is programmed to handle a massive number of tasks at rapid speeds to analyze complex language and deliver responses to inquiries such as those posed on Jeopardy!. The Watson software incorporates a number of proprietary technologies for the specialized demands of processing an enormous number of concurrent tasks and data while analyzing information in real time.

The computer has the ability to analyze the subtle meanings, irony, and riddles which accompany Jeopardy questions. It develops an answer and assesses its probability of accuracy to determine if a response is warranted. All this is performed at record speeds.

This is definitely more than just number crunching the winning moves on a chess board. The Watson software has to understand language, extract information, do it quickly and then determine a level of confidence in that response.

Although Jeopardy! presents an entertaining example of the technology, the real applications are truly awesome. The technology could be applied in areas such as healthcare, to help accurately diagnose patients. IBM suggests other applications such as improving online self-service help desks, providing tourists and citizens with specific information regarding cities and much more.