SEMI Members Sound Off

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From the SEMI North America President
SEMI Global Update

January 2010

SEMI Members Sound Off

I’ve been on a plane for about a month conducting face-to-face interviews with CEOs and other senior executives from member companies on the future of U.S. semiconductor manufacturing and the proper role of SEMI in the industry. Acting on a mandate from the SEMI Board of Directors to solicit member input and better understand member needs, all SEMI Regional Presidents have been on the road and talking with members for the past six weeks. These interviews will be combined with Member Satisfaction Surveys, North American Advisory Board discussions, and other feedback mechanisms to fine-tune our strategy for the coming decade.

The feedback was clear. Most members believe that the SEMI mission is important and appropriate, but the association needs to adapt to a changing and dynamic industry. The industry has undergone enormous change in the past 40 years. It has become more global, more mature, more technically challenging, and R&D intensive. There are fewer customers who are more demanding. In a young, high-growth industry, these kinds of challenges are expected; in an industry that has seen its second consecutive year of negative growth, these challenges force you rethink everything about your business.

North American SEMI members are being threatened by what they see as a disinterested government, unrelenting customers, all-too-often unethical competition, and an increasingly unfair global marketplace. They’re finding it harder to protect their intellectual property and get their customers to appreciate their unique competencies and need for a reasonable return. They are wondering about the proper role of government in their business (“no” to taxes, “yes” to technology investment) and how to diversify their businesses into PV, LEDs and other adjacent markets.

An important part of the conversation was what SEMI services are most valued and what SEMI activities should receive the highest priorities. Many customers see shifting priorities among SEMI services. These include a growing need for industry networking and market intelligence. In the U.S., they value traditional SEMI services like market data, executive conferences, International Standards, and EHS, but have increasing interest in sustainability, collaborative R&D, and government funding.

We asked members, “What keeps you up at night?” These issues surfaced the most:

    – Localization – Pressured to support efforts to develop alternative local supply/service providers threatens some members’ competitiveness / profitability.

    – IP Protection – Counterfeit spares are a major concern for product reliability, safety, service disruption, IP infringement, etc.

    – Supply Chain Dysfunction – Supply chain management has become corrosive. SEMI can help customers understand the value of a multiple-source supply chain.

    – Beyond Silicon – What is beyond silicon? What are economics and opportunities of alternatives to CMOS scaling?

Major themes and issues included:

    – SEMI has an appropriate and important mission and few other associations compete with the perceived value of SEMI, but SEMI needs to differentiate by segment and evolve its mission as the industry matures.

    – Members are focused on cost reduction and ROI.

    – Customer and industry networking is a vital value of many activities.

    – Members would like help defining emerging and adjacent market opportunities.

The next step in this evaluation and renewal process will be the development of a refined strategic plan for SEMI with our Board of Directors. Between now and then, we will collect and organize our data, understand our alternatives, and assess the costs and benefits of different options. From my conversations over the last several weeks, this process is not appreciably different than what many of our members are also going through at this time. A devastating recession and a changing industry force us to rethink many closely-held assumptions about your products, priorities and organization. And, probably like many of our members, the end result of this evaluation and renewal process will be a stronger organization, more closely aligned with member and customer needs,

To those I have spoken to over the past two months, thank you for your input. For those whom I have yet to reach, please feel free to call or email your opinions on SEMI priorities for the future. I look forward to your ideas and deeply value your input.

Jonathan Davis

January 5, 2010