Turmoil in Financial Markets May Reduce Semiconductor Demand

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Turmoil in Financial Markets May Reduce Semiconductor Demand

    “Turmoil and trauma in the financial world have caused us all to pause and reflect on the near term outlook for the chip and chip equipment industry,” according to Carl Johnson, director of research for Infrastructure. Johnson was one of three speakers at the recent SEMI Austin Outlook Lunch Forum. More than 120 people attended the annual event.

    Other speakers were Bill McClean, president of IC Insights and Jean-Christophe Eloy, general manager of Yole Développement

    Johnson said that the “mind-numbing debacles” in the credit markets should be major concerns for semiconductor executives. “The majority of these troubles are situated in the housing market and the sheer magnitude has forecasters questioning the resilience of consumer demand. If the consumer loses his home, will he still buy electronic gadgets?”

    Consumer demand is important, he added, because those end products now absorb over 50 percent of all the semiconductor devices produced.

    Assessing new end-user product development for semiconductors, Johnson said, “The development of new products, like the ebb and flow of the financial market, goes through many phases. The Business Enthusiasm Chart, where Despair and Ecstasy can be mapped as a product goes from Vision to Commercialization, is alive and well.”

    In his presentation, McClean predicted double-digit growth for ICs in 2007 (10 percent) and 2008 (12 percent). He also jumped into the 450 mm wafer controversy by predicting that just 15 companies will own 300 mm fabs when 450 mm wafers enter production.

    “I don’t know when 450 mm will happen, but when it does, there will be 15 customers. It is easy to say ‘no’ now, but it won’t be easy when TSMC or Intel come knocking on your door. It won’t be easy to turn them down, because there won’t be anyone behind them.”

    Eloy explored three areas where semiconductors technology expertise is being utilized: MEMS, photovoltaics and 3D chips. He said that photovoltaics can become a cost-competitive alternative energy within the next eight years, but only through collaboration between cell manufacturers and equipment and materials suppliers.

    Copies of the presentations are available at www.semi.org/austin.