Growth and a changing ecosystem at SEMI ISS 2016

The SEMI Industry Strategy Symposium (ISS) opened yesterday with the theme “Integrating for Growth: Markets, Technology, Ecosystem.” The packed conference of C-level executives gave the year’s first strategic outlook of the global electronics manufacturing industry.

Opening keynoter Mary J. Miller, deputy assistant secretary of research and technology at the U.S. Army, discussed future national defense needs and technological innovation capabilities. The most serious changes the Army needs to deal with are: technology parity (“high tech loses its advantage if everyone has it”); interconnected, global environment; and an unpredictable enemy- from individual actors to nation-states.

In the Economic Trends session, presenters took on macroeconomic trends and detailed industry-specific forecasts:

  • Duncan Meldrum, Hilltop Economics, believes that the effects of the financial crisis linger with the global economy more than two percent below potential - a full seven years after the financial crisis. However, the U.S. is farthest along the adjustment path. Looking at semiconductor Millions of Square Inches (MSI) outlook, he finds that the forecasts for 2015 and 2016 are both up about 2.8 percent while 2017 is expected to bring recovery (6.4 percent).
  • Bill McClean, IC Insights, cited expectations for improvement in global GDP and less strength of the U.S. dollar, forecasting the worldwide semiconductor market to grow 4 percent to $367 billion in 2016. He estimates that semiconductor capital spending will increase 1 percent to $66 billion and semiconductor materials revenues will increase 4 percent to $48 billion in the same period. McClean also predicts that the domestic production share of the Chinese semiconductor market will increase from 12.7 percent in 2015 to 18.1 percent in 2020.
  • Bob Johnson, Gartner, forecasts that the short-term outlook is weak but improving towards the end of the year. He believes that high single-digit growth will return in 2017 when 10nm starts volume production and 3D NAND ramp begins, and that China investment will boost spending in 2017-2019.
    Dan Tracy, SEMI, stated packaging is a key enabler of functionality in the mobile space - due to thin, small form factor multi-die and SiP applications growing. He also stressed that Fan-out wafer-level packaging (FO-WLP) is disruptive and will have a significant impact on the consumption of semiconductor packaging materials in the coming years.
  • Ezra Greenberg, McKinsey & Company, believes that the world is roughly 10 years into a dramatic transition as a result of four disruptive trends: growth and urbanization in emerging markets, rapid technological changes, increasing connectivity, and the aging of populations. The disruptions are producing change so significant that “management intuition that has served us in the past will become obsolete.”

The afternoon session focused on Market Perspectives, including China’s growing role in the ecosystem. Handel Jones, International Business Strategies, believes the many acquisitions - like OmniVision, STATS ChipPAC, and NXP’s RF Power - were made to gain fast access to products and IP. Multiple funding sources have been set up for the establishment of semiconductor manufacturing in China with large government and commercial funding coming into focus. The China supply ecosystem will go through many changes and bring major opportunities for the global industry. Mark Lipacis, Jefferies, emphasized that in contrast to 10-15 years ago, recent semiconductor M&A has been received positively by shareholders. China’’s emergence as an important industry player as it targets to double its industry share by 2020.

Jiri Marek, Robert Bosch, talked about how smart sensors are the enabler for the Internet of Thing (IoT). Connected devices will grow from today’s 5 billion to 20–50 billion devices. He highlighted sensor data fusion which enables use-cases, like activity monitoring, augmented reality, and intent prediction (location-based services and well-being recommendations).

Manish Bhatia, SanDisk, spoke about the exponential growth of data and devices: 44 trillion gigabytes of digital data by 2020; 26 billion connected devices by 2020; 1.7 trillion digital images created in 2016; and 400 hours of video uploaded to YouTube every minute. With product categories blurring in terms of computing power and storage, he stressed that semiconductor makers need to focus on broader product portfolios and on solutions, not components.

Days 2 and 3 at ISS will delve deeper into the industry - technology, manufacturing, and collaboration with presentations from: Amkor Technology, ASM International, ASML, GlobalFoundries, IM Flash Technologies, Intel, Intel Capital, Micron, Qualcomm, SMIC, and SUNY Poly/CNSE. Additional keynote speakers include Ken Hansen, president and CEO of Semiconductor Research Corporation, and Haruyoshi Kumura, fellow at Nissan. In the final session of the last day, a panel on “It’s 2050… Moore’s Law is Dead… What’s the New Business Model” features Brewer Science, Cisco Systems, GlobalFoundries, Intel, Synopsys, and VLSI Research.

The SEMI Industry Strategy Symposium (ISS) examines global economic, technology, market, business and geo-political developments influencing the semiconductor processing industry along with their implications for your strategic business decisions. For more than 35 years, ISS has been the premier semiconductor conference for senior executives to acquire the latest trend data, technology highlights and industry perspective to support business decisions, customer strategies and the pursuit of greater profitability.


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