SEMI Global Update — February 2010
SEMI Europe Members Speak Out
By Heinz Kundert, president, SEMI Europe
What is the future of European semiconductor manufacturing and the proper role of SEMI and PV Group in the industry? Acting on a SEMI Board of Directors mandate to solicit member input and better understand member needs, SEMI executives conducted face-to-face interviews with CEOs and other senior executives from member companies to find out. For the past 6 weeks, all SEMI Regional Presidents have been on the road talking with members. These interviews will be combined with Member Satisfaction Surveys and Advisory Board discussions, and other feedback mechanisms to fine-tune our strategy for the coming decade.
Compelling Feedback. 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 tremendous change in the past 40 years. It’s more global, mature, technically challenging, and R&D intensive. There are fewer customers but they are more demanding. These kinds of challenges are expected in a young, high-growth industry; but in an industry in its second consecutive year of negative growth, these challenges force you rethink everything about your business.
SEMI members in Europe feel threatened by what they see as a disinterested government, unrelenting customers, all-too-often unethical competition, and an increasingly unfair global marketplace. They find it harder to protect their intellectual property and get their customers to appreciate their unique competencies and need for a reasonable return. They wonder 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 our conversations was about the priorities of SEMI activities. Many customers see a declining value in expositions, but a growing need for industry networking, advocacy, and market intelligence. In Europe, 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.
“What keeps you up at night?” we asked. 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?
Key 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.
Next Steps. A new strategic plan will be developed for SEMI for our Board of Director review in March. Between now and then, we will collect and organize our data, understand our alternatives, and assess the costs and benefits of different options. This process is not much different than what many of our members are also going through at this time. The recession and changing industry forces make us rethink many closely-held assumptions about your products, priorities and organization. I trust that the end result of this evaluation and renewal process will be a stronger organization, more closely aligned with member and customer needs,
If I have already spoken with you, thank you for your input. I haven’t reached everyone yet, but please feel free to call or email your opinions on SEMI priorities for the future. I look forward to your ideas and value your input.
February 3, 2010