semiconductor industry

I really don’t know clouds at all. – Joni MitchellThe semiconductor industry is finally on the cusp of joining the cloud revolution. The cloud has offered the promise of greatly expanded resources for years, but adoption has been slow due to lingering concerns. The biggest contributing factor for the concern over moving from on-premise EDA servers to cloud-based servers is, surprisingly, the rise of third-party IP. In the old days, if you were developing 100 percent of your own IP, and if you put that IP on a public cloud, and it somehow leaked out, well shame on you. That would certainly be bad for business. It might hurt your reputation a bit. But these days, with so much third-party IP being embedded into chips, if that third-party IP leaks out, that’s a lawsuit-fest in the making.Consequently, semiconductor companies now have even more incentive to protect IP with advanced security. Surprisingly, cloud-based security is far, far better than on-premise security. Why? Because keeping customers’ data secure is the central mission of cloud service suppliers, so they’ve developed a rich set of security tools to protect the data that’s entrusted to them by their clients. In many ways, you can maintain much better security in the cloud than you can with on-premise tools. Image credit: Markus Spiske temporausch.com from Pexels Amazon Web Services: Exemplifying the benefits of cloud computingTake Amazon Web Services (AWS) as an example. (Note: AWS is not the only vendor in the cloud space, but it’s one I’m very familiar with.)AWS has developed the concept of security groups – firewalls that you throw up around any network interface to allow only specific traffic into that secured network. You can do that for just one server or for a fleet of servers, in just seconds. Most on-premise server networks won’t let you work that quickly, or as easily, or with such fine control because most such networks lack the security tools to do this.In addition, AWS allows you to encrypt every bit of data stored on and flowing through its cloud-based storage systems. You can encrypt data at rest in on-premise storage but it’s a lot harder to encrypt data flying through the on-premise network. Amazon’s Elastic File System (EFS), a managed NFS file service, offers the ability to easily encrypt NFS traffic on the wire, a difficult feat at best with an on-premise solution.AWS built-in encryption key-management service can rotate encryption keys automatically. The cloud also allows you to have key policies that are easy to implement and maintain.Internal corporate networks rely heavily on perimeter firewalls for security. Perimeter defense just cannot deliver sufficient security against determined hackers and everyone realizes this. We’ve built big, open, on-premise networks that are just not well-suited to implementing adequate security protocols. Trying to retrofit these network architectures with additional security is time-consuming and costly, and it hurts engineering productivity. Moving to the cloud gives you a greenfield opportunity to right some of the wrongs of the past.Continuing with AWS as an example, here are some additional advantages of EDA in the cloud: AWS provides physical security that’s far above and beyond on-premise security. It doesn’t publish the physical locations of its data centers. It also has professional security staff 24/7, keycard access, and additional security features that far exceed typical on-premise physical security. AWS automatically manages security patches and access controls for their managed services such as database services. AWS gives you plenty of security tools to automate security processes, audits, and so forth to protect your data. AWS gives you so much flexibility that you can get yourself in trouble in you are not careful. If you want, you can create the same sorts of security holes that already exist with on-premise networks. You shouldn’t of course, but you can if you’re not thoughtful about things. You just need to hire the right people to implement and maintain your cloud security.Here are five very big differences between AWS (cloud-based) and on-premise server networking: Elasticity: Cloud-based systems enable you to scale up in minutes. That ability has pluses and minuses depending on how disciplined you are. On the plus side, you can quickly grow your EDA infrastructure as big as you want and then shrink it back down when you no longer need the additional capacity. All you need to do is tell the cloud service that you need more capacity and it will bring that extra capacity online for you in minutes – and will charge you for it. (That’s the minus side.) When you’re done, you can turn off the extra capacity (and stop paying for it) with the same speed. If you want to provision more EDA capacity for your on-premise network, you’ll need to beg, borrow, or steal existing capacity from someone else on your network, or you can order more servers, get the vendor to build and ship them, install them in your server room, provision them, and bring them online. That will take months. Fault tolerance: On-premise networks rely on large, monolithic service architectures, which saddle EDA vendors with more than 30 years of technical debt. The cloud operates on a different model, one that’s based on containers and microservices. This is inherently a redundant, fault-tolerant computing model if you write your code correctly. The difference between redundancy in the cloud and in on-premise networks is night and day. There’s no comparison. No private networks can match the available and growing redundancy of cloud systems, which have redundant servers inside of a data center and redundant data centers in multiple, worldwide geographic locations, which protects your data from natural and man-made disasters. Network segmentation: Many semiconductor developers have several design centers distributed around the world and there may be IP in use on a project that cannot be shared with certain geographic locations either by law or by contract. Cloud networks are already set up with automated tools for network segmentation that can enforce geography-specific rules through VPCs (Virtual Private Clouds), which are easy to set up. VPCs allow you to set up subnets with restrictions based on routing tables so that IP management and control become highly automated. Removal of single points of failure: The typical EDA grid configuration has several built-in single points of failure. For example, a central job dispatcher generally runs on one single node. If that node dies, all EDA work halts. The same is true for EDA license servers and for configuration-management and version-control servers. Again, because cloud networks are based on the microservices concept, the cloud simply doesn’t need to have the same single-point-of-failure vulnerabilities that on-premise networks have. On-premise networksTo get these same advantages with on-premise networks, the grid architecture must fundamentally be changed, starting with the replacement of NFS. EDA systems need to replace huge, monolithic file systems specifically developed for EDA with object storage. That's a tall order – one that requires the rewriting of fundamental assumptions that serve as EDA software’s foundation.In the 1980s, 1990s, and early 2000s, small EDA startups appeared to fill gaps in the offerings of the large EDA players. If they succeeded and grew, they’d eventually be gobbled up by a larger EDA vendor. That flowering of EDA startups seems to have damped down. The market has really matured.Next wave of EDA startups to offer cloud-first toolsGoing forward, I expect the next wave of EDA startups will be offering cloud-first tools that are not burdened by three decades of technical debt. They’ll be able to architect their tools specifically for the cloud.We’re starting to see this happen. For example, Metrics, a Canadian EDA startup, offers a pay-by-the-minute, cloud-based simulator and verification manager. Although one job on one cloud server might run slower than a monolithic simulator running an on-premise server, Metrics has architected its tools so that you can throw more servers at the problem, allowing you to run all of your jobs at once. Here, multiple simulation jobs running concurrently on multiple servers will ultimately finish faster than running the jobs serially on one slightly faster on-premise simulator.That’s the kind of innovation that we’re going to see. That’s the future of EDA.Derek Magill is executive director and president at HPC Pros. Derek has 20 years of experience supporting semiconductor engineering functions. His main focus has been in system architecture and technical management, but over the years he has been involved with technologies such as EDA licensing, ClearCase, HPC architecture, IP management and engineering software support. Derek spent 15 years at Texas Instruments in various technical and managerial roles. He is currently a senior manager, IT at Qualcomm managing the Global License Infrastructure team as well as the lead technical architect for the company's engineering cloud activities. The Electronic System Design (ESD) Alliance, a SEMI Strategic Association Partner, is the central voice to communicate and promote the value of the semiconductor design ecosystem as a vital component of the global electronics industry. As an international association of companies providing goods and services throughout the semiconductor design ecosystem, it provides a forum to address technical, marketing, economic and legislative issues affecting the entire industry. The ESD Alliance also stages events that promote networking, learning and collaboration among member companies. To learn more about the ESD Alliance and how to join the group, visit www.esd-alliance.org or contact Bob Smith at [email protected].

Five young dancers bathed in a striking rainbow of colors with their silhouettes cast in the background dazzled SEMICON Japan 2018 attendees at the opening ceremony in mid-December. Gone were the standard opening keynotes and ribbon cutting, replaced by live performance and media art set against a dramatic black backdrop. There was no mistaking the wide-eyed looks of wonder in the audience.In its sheer vibrance, the opening ceremony thrilled with an excitement that seemed to embody the extraordinary growth expectations for the global semiconductor supply chain over the next five years, with the industry poised to double sales from $2 trillion to a staggering $4 trillion – a phenomena SEMI president and CEO Ajit Manocha has called The Rebirth of the Semiconductor Industry. Driving this unprecedented growth will be SMART applications that are transforming industries and applications worldwide, powered by artificial intelligence (AI) and Internet of Things (IoT) technologies.The dramatic scene at SEMICON Japan 2018 was staged by Rhizomatiks, a media arts company that produced the Rio Olympic Games closing ceremony and is famous for its pop music spectacles. The company’s CTO, Motoi Ishibashi, the event’s first keynote speaker, described his team’s development of drones and vehicles guided by motion and precision-control technologies. It was some of these SMART vehicles that maneuvered the opening ceremony performers from the dance company Elevenplay onstage. Only Rhizomatiks, Ishibashi said, has this capability. In its mission to enrich people’s lives through new media arts, Rhizomatiks uses the latest virtual and mixed-reality technologies to orchestrate not only dance performances but music videos, commercials, fashion shows and festivals.Toru Nishikawa, the second keynote speaker and CEO at Preferred Networks, a leading Japan-based developer of deep learning software programs, surprised the SEMICON Japan audience with his discussion of his company’s work to develop a specialized chip for deep learning processing, joining technology giants Apple, Google, Alibaba and Microsoft in chip design. As more IT and software companies develop specialized, differentiated chips, the devices are quickly becoming the heartbeat of SMART technologies. The company’s approach has taken hold. Only four years old, Preferred Networks is enjoying rapid growth by working with global powerhouses including Toyota, NTT, Panasonic, Fanuc, NVIDIA, Intel and Microsoft. Ishibashi’s and Nishikawa’s fresh visions and the media arts extravaganza reflected the success of SEMICON Japan, held again at Tokyo Big Sight: The event’s 1,881 booths – filled by 727 exhibitors from 14 regions – was the highest count in six years. With Japan home to companies that supply about 40 percent of semiconductor equipment and materials worldwide, top suppliers historically have occupied the largest spaces on the SEMICON Japan show floor.According to IDC, personal computers and smartphones, long the largest revenue sources for the semiconductor industry, will remain top revenue drivers in the coming years. But revenue from new SMART technologies for applications such as automotive and factory automation is growing, a trend expected to continue with a 2018-2022 CAGR of 9.5 percent for automotive and 5.2 percent for manufacturing, compared to 1.1 percent for PCs and 2.9 percent for smartphones.SEMICON Japan’s new SMART Applications zone highlighted these and other new market opportunities for semiconductor growth with product and technology exhibits from companies including Bosch, IBM, Microsoft, NEC, Preferred Networks, Sony, SAS, Siemens, Tesla and Toyota. But the zone wasn’t all work and no play. The ROBOT SQUARE and SPORTS x IOT robot exhibits took visitors back to their school days, with robot anime – from Astro Boy to Gundam and Evangelion – that they could ride and control! As the World Gets Smarter, So Must SEMICON and the IndustryWe all agree the world is getting smarter at a fast pace. New cars are easier to drive – some models are almost fully autonomous on highways and streets. Your SMART speaker has gone well beyond an audio playback device and is more like a home AI platform. Almost all storefronts are equipped with video cameras. Your workplace, whether an office or a factory, is driven by automation. The reliance of these environments and devices on semiconductors is driving exponential chip and changing the world. Businesses need to adapt and so do SEMICON events. We’re doing just that as SEMICON Japan 2018 demonstrated – from an opening ceremony enabled by technology innovation to new faces of the industry to the SMART Application zone. As the SEMICON Japan presidents’ reception concluded the first day of the show, a robot from the ROBOT SQUARE suddenly appeared in the reception hall in front of about 250 executives from the global industry. Everyone at the reception was impressed and stepped forward to the stage, reflecting the overall excitement about SEMICON Japan, which for many years showcased only chip manufacturing equipment and materials. This year, to keep pace with the changing world, it was much more than that.SEMICON Japan 2019 will again take place in December at Tokyo Big Sight. However, organizers of the Tokyo Olympics will be using the East Exhibit Hall usually occupied by SEMICON Japan to prepare for the games. As a result, SEMICON Japan will be held in the West and South Halls instead. Look for more changes to the event. I hope to see you next year!Jim Hamajima is president of SEMI Japan.

Spotlight on SEMI Women is excited to recognize Q4 2018 honoree Ellie Yieh from Applied Materials!Spotlight on SEMI Women recognizes and celebrates accomplished women working in the global microelectronics industry. Nominees include women who are beacons of knowledge, leaders of organizations and initiatives, hidden heroes and innovators in our industry. They are volunteers, protectors, intellectual disruptors and activists. SEMI’s Diversity Inclusion Board works with our member companies to shine a spotlight on these amazing women. Learn how you can nominate a woman for Spotlight on SEMI Women.Ellie Yieh has been a trailblazer at Applied Materials since she began her career with Applied in 1989 as a process engineer in the Chemical Vapor Deposition group. Ellie’s contributions have made a lasting impact on the business and she continues her path of innovation as corporate vice president for Advanced Product Technology Development. Ellie is responsible for the company’s state-of-the-art Maydan Technology Center and works closely with customers and business units to drive advanced product development and technology roadmaps. In addition, Ellie leads R D for developing new memory and logic innovations that will drive future business opportunities for Applied. In 2018 she was named an Applied Materials Fellow, the company’s highest honor for outstanding technical achievement. She is also a board member of Applied Ventures, LLC, the company’s venture capital arm.During her 30 years at Applied, she has led the development of several successful products and enabled her teams to deliver growth in profitability and market share, while building strong customer relationships and developing innovative technologies. Of note is Ellie’s leadership in developing industry-leading Gapfill technologies to address the increasingly important shallow trench isolation and inter-layer dielectric applications for denser pitches. Further, Ellie spearheaded the adoption of Applied’s low-k Producer® Black Diamond® system, helping to develop and introduce a robust, low-k film that could withstand both the newly adopted copper back end-of-line and packaging integration challenges.st honor for outstanding technical achievement. She is also a board member of Applied Ventures, LLC, the company’s venture capital arm.Ellie’s journey in technology began when she immigrated to the U.S. from Taiwan at the age of 15 with her family. She quickly stood out due to her stellar academic performance in math and science. Her academic excellence landed her at UC Berkeley’s College of Chemistry. Ellie’s adaptability as an Asian female became crucial as she navigated a field dominated by male engineers. She received a B.S. in chemical engineering from UC Berkeley and now holds more than 100 semiconductor engineering patents. In 2016 she was inducted into the Women in Technology International (WITI) Hall of Fame for outstanding contributions to the scientific and technological communities. She was also named one of the 2015 “Top 50 Most Powerful Women in Technology” by the National Diversity Council.Ellie has also been spending time championing for woman engineers. She is a member of the advisory boards for UC Berkeley’s College of Chemistry and the Silicon Valley Women in Engineering group at San Jose State University.Ellie finds working in the semiconductor industry rewarding because “the technical challenges come like clockwork so we are always on our toes working on the next problem and the next solution. I enjoy each of the challenges to put the puzzle together. It’s a team sport; we are all dependent on each other to win and when we look at a problem I am just another engineer on the team trying to solve the problem. But I am also responsible for setting higher level direction for priorities, objectives and vision. It has been very fun for me and I love what I do.”Cristina Sandoval is manager of Workforce Development at SEMI.

Environment, Health and Safety (EHS) has steadily evolved to become a key element within SEMI’s Advocacy and Standards activities. On November 29th, 2018, nearly 60 members representing equipment, materials and device manufacturers gathered at SEMI’s Milpitas headquarters for our first EHS Summit. The main agenda for the day was related to discussing the new “EHS 2.0” strategy – and priorities – to better align with the current landscape facing members in various parts of the world. “SEMI will not compromise our commitment to EHS,” said SEMI president and CEO Ajit Manocha in is kickoff speech at the Summit, calling on members to rise to the challenge. “We also understand the importance of EHS for our industry. SEMI EHS staff is here to facilitate a program that achieves the highest priorities of our members – but we need you, our members, to be clear on your priorities.” SEMI’s EHS program has had many successes globally, including a strong suite of safety standards, since it launched in the 1980’s. Since then, exponential growth of EHS regulatory requirements worldwide has intensified pressure on members to become more transparent on environmental and social issues. The pressure to disclose on EHS performances has become more visible and challenging for members to manage across the entire supply chain. During facilitated breakout sessions, members were invited to share their views on various industry issues. Some of the most pressing raised related to changes in the REACH European Regulations, or implications from the Stockholm Convention that will affect what products or hazardous chemicals can be used. Some of the topics identified throughout the day included: Circular economy/green/sustainability Global RoHS and REACH regulations Used equipment machine safety Current and future prohibited substances tracking such as Perfluorooctanoic acid (PFOA) After the summit’s success, SEMI is now planning three EHS summits in 2019 and other events to further address the various issues facing members. To receive invitations and stay abreast of SEMI’s EHS activities, please join our EHS interest list by clicking here. Olivier Corvez is senior manager of Environment, Health, Safety and Sustainability at SEMI.

Meeting Attended by More than 100 Tech Company RepresentativesOver the past decade, China has become a central market for the semiconductor industry. China is now home to more than 30 percent of semiconductor end users worldwide. All semiconductor companies, regardless of size, operate in China. The rise of China’s semiconductor market has been enabled by global commerce and a vast network of supply chains that span the globe.With China now a prominent player in the industry, it has become critically important for semiconductor companies to effectively engage with China. In order to help our member companies better understand the challenges and opportunities and navigate what can be a complex landscape, SEMI hosts annual trade compliance conferences in China for trade professionals. This year, SEMI, with CompTIA and U.S. Information Technology Office (USITO), hosted two global trade seminars in China, one in Shanghai on October 30th and the other in Beijing on November 1st.Over 120 representatives from more than two dozen technology companies attended the 2018 trade compliance seminars. Over the course of the two sessions, speakers from government, business, and law firms highlighted the most pressing trade issues in China. Speakers included thought leaders, trade practitioners and senior Chinese government officials.Sessions included a deep dive on China’s draft customs reform law, a panel discussion on U.S. export controls, and a briefing on how best to engage with China Customs and how China’s products are classified. Another well-received session focused on the status of China’s export control law, which has been in the drafting process for years.However, the overarching question for many attendees was U.S.-China economic relations, which are undergoing a sea change, with the U.S. having imposed or threatened tariffs on all imports from China – totaling more than $500 billion in goods – over the past six months. As a speaker noted during a session on the U.S.-China tensions and the surrounding broader geopolitical impacts, the environment is becoming increasingly complex and volatile. In fact, on the morning of the first session, Fujian Jinhua Integrated Circuit was added to the U.S. Commerce Department’s entity list, which effectively restricts exports to the company.As a result of the trade actions, ranging from tariffs to enhanced export controls, U.S. semiconductor companies are beginning to increase prices, reduce research and development (R D) budgets, restructure supply chains and take other mitigation actions that will ultimately slow innovation. Certain export controls and other regulations that prohibit U.S.-companies from conducting business with targeted companies will put the U.S. at a competitive disadvantage.In fact and as we speak, some companies with China-based operations have cancelled orders from U.S. companies and shifted to suppliers that are not subject to U.S. actions to reduce the associated risks of supply interruption and cost increases. Ultimately, U.S. trade policy could backfire, threatening jobs, curbing growth, cutting U.S. R D investments and compromising the competitiveness of U.S. firms.SEMI will begin planning next year’s Global Trade Seminar in the coming months. If you would like to be involved in the planning, or would simply like more information about the seminar, please contact Jay Chittooran, Public Policy Manager at SEMI, at [email protected].

With (most of) the election results in from the U.S. midterms, the expected Democratic takeover of the House and the Republican’s maintaining control of the Senate is now a reality. The day of the election, DC insiders expected that the House would go to the Democrats by a margin of +/- 20, with the Republicans gaining 2-3 seats in the Senate. Not a bad prediction, which is a far cry from what the same insiders called in advance of the 2016 Presidential election.What does that mean for our members and the tech sector in general? Will there be an ease of trade tensions or less of a chance of tighter export controls? Some believe that with the midterm elections over, President Trump will have some room to take a less aggressive stance against China, setting up a “win” that he can carry into 2020. With the recent more aggressive stance by North Korea against the U.S. regarding its nuclear program, China may well have some leverage at the trade table … and the U.S. may want to make a deal that provides a path for a “win” on both fronts. Indeed, there are the makings of a potential win-win leading into the G20 meeting in Argentina when President Xi Jinping and President Trump are scheduled to meet on Dec. 1.One can see a scenario where there is a meeting of the minds and some degree of lessening tariffs; that does not mean that the effort to enhance export controls will go away. The need for tighter restrictions on export controls is driven to a great degree by the U.S. Department of Defense (DoD) and is a follow on from the previous FIRRMA legislation and attempts to curb the loss of U.S. technology critical to global competitiveness and national security. This issue will not go away anytime soon, and cases like the recent one involving Jinhua only add fuel to the fire. In addition, given how these cases can be leveraged at the negotiating table, they will continue to surface.SEMI’s approach has been to educate governments, lawmakers and administration officials on the strategic importance of the globally connected and highly complex semiconductor supply chain, and how some of the approaches will not achieve the attended goals. This approach helps to ensure that when and if it comes time to make decisions based on merit, the principals are informed. It also helps SEMI and its members develop and maintain important relationships and positions SEMI as an industry leader and spokesperson, making it a more effective advocate. As an example, on Nov 8th SEMI released its Global Trade Principles with the intention of providing a framework to all governments to guide various trade talks. It also helps to inform member companies and others from the broader tech sector of our industry position(s) so we are able to speak with one voice. These principles are aligned with our fundamental advocacy pillars of promoting free trade and market access, respect for IP, cybersecurity and national security.Will the fact that power is now split between the two chambers of Congress help or hurt? Will the House focus on investigations limit the ability to move productive legislation? Besides taking time, it may well put them at increasingly worse odds with the Senate and the President (if that is possible), creating deadlock. Some argue that if nothing moves, no harm can be done. Some also say that it may drive the President to take independent and more aggressive actions in order to demonstrate (his) effectiveness to his base. There is another view: that with the Democrats, the President may be able to lead in the advancement of legislation that will show he can get things done when others couldn’t in areas that benefit the greater good…some of which may impact our industry…such as investments in education and infrastructure development. This would be a way that he could pull in some of the votes from the middle that he has lost in his first two years in office. They say “politics makes for strange bedfellows”; one never knows what might happen in this case.Regardless of what happens, some things will not change: the global nature of our business and the needs of our members to have access to markets…and to be able to safely and efficiently leverage their technologies in the way they see fit in order to grow their business. SEMI will continue to advance the interests in what is an extremely challenging and dynamic global policy environment today. As ruling parties and representatives change around the globe, we will continue to build new relationships and educate lawmakers so they are able to make informed decisions that benefit our members. Mike Russo is VP of Public Policy and Talent Advocacy at SEMI.

Kyushu, the third largest island in Japan, is home to the semiconductor production bases of integrated device manufacturers (IDMs) with world-class cutting-edge technology. SONY, Toshiba, Hitachi, Mitsubishi, Fujitsu and Nissan are among the sector’s shining stars, though a host of other IDMs tied to the supply chains of other major enterprises have also set root in Kyushu. Collectively, the companies earned Kyushu the name Silicon Island of Japan.Kyushu’s flourishing IDM industry sprouted from favorable tax and other government policies that reduced semiconductor production costs to levels lower than elsewhere in Japan. Once the IC producers had established bases, equipment and materials companies naturally followed, leading to the influx of many parts manufacturers. Together, they came to Kyushu, one after another, to make the island a magnet for manufacturing. And so it was to Kyushu that a SEMI China delegation travelled for a meeting at TEL’s factory in Kumamoto to learn more about the secrets to the rapid growth of the island’s semiconductor industry and promote cooperation between Chinese and Japanese enterprises. Underscoring the rise of the Silicon Island of Japan, China will soon become TEL’s largest market, said Masami Akimoto, Chairman of Tokyo Electron Kyushu Limited, speaking at the event. Masami Akimoto hopes for support from SEMI China.The island of 12 million people contributes to the growth of the global semiconductor industry, expected to reach USD 500 billion in size in 2019 as China’s semiconductor sector, fueled in part by government-backed investment funds, continues its rapid expansion. Despite the gains, China still lags other regions in advanced manufacturing, said Lung Chu, president of SEMI China, which is doing its part to draw more advanced manufacturing to the region through its SIIP platform. The initiative encourages pan-regional cooperation with China’s semiconductor industry to promote free trade, open markets, technology innovation and IP protection – all to help China better integrate with the global semiconductor industry. SEMI China President Lung Chu(L) issues visit memorial to Masami Akimoto(R), Chairman of Tokyo Electron Kyushu Limited. Chicken shall be led by the HenUnlike other regions with comprehensive semiconductor industries, Kyushu’s is primarily focused on production and assembly, with more than 200 manufacturers of semiconductor equipment and parts.SEMI China Delegation at Tokyo Electron Kyushu LimitedTEL built its first factory in Kumamoto, a city covered by volcanic ash in the center of Kyushu, 34 years ago. Today, TEL every month produces 80 to 90 sets of equipment, each consisting of, on average, over 400 thousand parts that must be certified and authorized by TEL before delivery to its module manufacturers and assembly into complete machines. Having blossomed over the past few decades, the island’s supply chain now supplies TEL with all its equipment parts. SEMI China Delegation at Fajita WorksTEL supplier Fajita Works, a high-precision plate metal manufacturer founded in 1945, is emblematic of other companies in the Kyushu supply chain. It keeps a low public profile as it serves several longtime customers and earns ardent loyalty from its workers, an ethos reflected in the change next January of its slog from “Only One” to “Great company, Great life.”Quality is the life of the enterpriseLong before the rise of its legendary automobile and consumer electronics companies, Japan was known for inferior, counterfeited products, labeled “Made In USA” and shipped to the United States by more than 100 factories. The net effect was to shrink and commoditize American markets. The tide in Japan’s product quality and stained reputation began to turn in the 1980s, when Japan’s semiconductor industry began to produce memory with an error rate 27 times lower than its U.S. competitors, giving Japan an upper hand in quality that it would never relinquish. SEMI China Delegation at HORIBAKyushu-based flowmeter supplier HORIBA, among the many Japanese companies famous for their product quality, ships 38 percent of its products into the automotive market and 27 percent into the semiconductor sector. Cleanliness is as vital a part of the company’s culture as quality. Each depends on the other, with fine detail held to the highest importance. On its visit to HORIBA, the SEMI China delegation, passing by an office area before entering the factory, sighed at the sight of the spotless, neatly kept furniture and workspace: They had never seen an office so sparkling clean. HORIBA’s success is rooted in immaculate offices, factories and the company’s motto “Enjoy innovation and pay close attention to product quality.”After Kumamoto sustained heavy damage during a 2016 earthquake, HORIBA workers returned rocks scattered by temblor to their original position, knowing that order is critical to lean, efficient manufacturing and that, indeed, “the devil is in the details.” SEMI China Delegation in Kumamoto City Full confidence in the exploration of Chinese marketConsumer electronics stalwarts Sony and Panasonic feature semiconductor factories in Kagoshima, the southernmost city in Kyushu and Japan, though rumor had it two years ago that Panasonic planned to pull out. The Panasonic plant, which provides batteries for Tesla, remains. The Sony facility produces image sensors for the iPhone.Semiconductor equipment maker ULVAC, SEMI China’s most important strategic partner, is also based in Kagoshima. During the delegation’s visit to the company, Lung Chu noted that while China is the world’s largest semiconductor market, the region meets just 13 percent of domestic chip demand. Stressing that ULVAC can play a crucial role in helping China become a bigger player, he expressed admiration for ULVAC’s professionalism along with hope that it will maintain its rapid growth and leverage SEMI resources to catalyze rapid development of Internet of Things (IoT), artificial intelligence (AI), and 5G technologies in China and rise into the top 10 of global equipment manufacturers. SEMI China President Lung Chu (L) issues visit memorial to ULVAC Kyushu President and CEO Kenji Yamaguchi ULVAC Kyushu president and CEO Kenji Yamaguchi made clear the company’s interest in Lung Chu’s insights into Chinese semiconductor industry while underscoring its core competency of producing semiconductors for flat panel displays. The Kyushu Factory of ULVAC is full of vitality and market competitiveness. SEMI China Delegation at ULVAC EBARA, a precision machinery company located in Kumamoto, has manufactured chemical-mechanical planarization (CMP) equipment for over 20 years and delivered nearly 2,400 mechanical polishing machines worldwide. While the company expects to ship 50 sets per year to China starting next year, it has the capacity to deliver 20 sets per month, enough to meet demand of Chinese semiconductor makers. SEMI China Delegation at EBARAThe most telling takeaway from the SEMI China delegation’s visit to the Kyushu: Japan ranks number one worldwide in research and development (R D) investment as a proportion of GDP and is also at the top in the percentage of R D funds controlled by private enterprises. The outsize investment strategy has enabled Japan to maintain its hold as one of the world’s top technology innovators.Like Sakurajima, the famed Kyushu volcano, the SEMI China delegation will continue to harness its forces to build relationships with the island’s semiconductor supply chain as it works to develop win-win pan-regional relationships and foster the growth of China’s semiconductor industry. Best view of Sakurai volcano Gang Yao is a marketing director at SEMI China.

Last week, the Office of the U.S. Trade Representative (USTR), on instruction from President Trump, notified Congress that the administration intends to begin bilateral trade negotiations with Japan, the European Union (EU), and the United Kingdom.SEMI stands strong for free trade and open markets, and roundly supports efforts to increase market access and tap into more foreign economies, especially economies like Japan and the EU, both of which are central to the semiconductor industry. The semiconductor industry, which enables the $2 trillion electronics market, is built on global commerce. SEMI members rely on a vast network of supply chains that span the globe, bringing together components and tools made all around the world and assembled into a single sub-system that is then integrated into a larger tool used in the chipmaking process.These free trade agreements will reduce tariffs, which will result in cost savings and productivity gains, and allow SEMI members to expand and grow. But the benefits of modern free trade agreements extend well beyond tariff reduction. Indeed, these trade deals will establish and enhance global trade rules that enable companies to innovate and compete fairly on a level playing field. Trade agreements strengthen certainty and further business continuity.While the exact nature and negotiation timelines for the talks remain unclear, SEMI will engage the administration, urging it to maintain high standards in these agreements, such as: Maintain strong respect for intellectual property and trade secrets through robust safeguards and significant penalties for violators Remove tariffs and non-tariff barriers on semiconductor products as well as products that depend on semiconductors Simplify and harmonize the customs and trade facilitation processes Combat any attempts of forced technology transfer Prevent use of data localization measures and enable the free flow of cross-border data flows End discriminatory and/or burdensome regulatory practices Ensure standards in all forms are market-oriented Create rules for state-owned enterprises to ensure fair and non-discriminatory treatment of all companies According to Trade Promotion Authority (TPA), the U.S. law that guides trade votes in Congress, negotiations with each country can only begin 90 days after last week’s notification. During that period, there will be intensive consultation with Congress and stakeholders. This means, at the earliest, talks can start on January 14, 2019. (Bear in mind that discussions with the UK can only begin in earnest once the UK has formally left the European Union on March 29, 2019.)The Trump administration’s announcement comes after the U.S. imposed or threatened tariffs on imports on all trading partners, including the EU and China. All told, the U.S. has imposed tariffs on more than $300 billion worth of goods. SEMI has weighed in on the detrimental nature of tariffs, arguing that tariffs on China will ultimately do nothing to address the concerns with China’s trade practices. This sledgehammer approach will introduce significant uncertainty, impose greater costs, and potentially lead to a trade war, ultimately undercutting the ability of semiconductor companies to sell overseas, stifling innovation and curbing U.S. technological leadership.Elsewhere, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the multilateral trade deal that links 11 Asia-Pacific economies, is well on its way to taking force. Canada will be taking its final steps to ratify the deal, joining Mexico, Japan and Singapore. The deal, formerly known as the Trans-Pacific Partnership, should take effect by the first half of 2019.SEMI will continue tracking ongoing trade developments. Any SEMI members with questions should contact Jay Chittooran, Public Policy Manager at SEMI, at [email protected].

ULVAC Technologies’ David Mount is working with The CIA. Is he the Jack Reacher of the MEMS and sensors industry, jetting around the world to secret meetings, you wonder? While David isn’t quite the super-spy that you might have imagined, he is doing some fascinating work on behalf of ULVAC Technologies, the world leader in vacuum technology.ULVAC has been collaborating with The Culinary Institute of America (CIA) on Menus of Change, “a ground-breaking initiative from The Culinary Institute of America and Harvard T.H. Chan School of Public Health that works to realize a long-term, practical vision integrating optimal nutrition and public health, environmental stewardship and restoration, and social responsibility concerns within the food service industry and the culinary profession.”ULVAC also partners with Menus of Change (MOC) University Research Collaborative, a group of elite universities and food-service executives working together to “accelerate efforts to move Americans toward healthier, more sustainable, plant-forward diets.” MEMS Sensors Industry Group’s Nishita Rao caught up with David, a featured speaker at MEMS Sensors Executive Congress on October 29-30, 2018, in Napa, Calif. to give MSEC attendees a preview of David’s talk. SEMI: How did ULVAC get involved with The CIA on Menus of Change?Mount: People in the MEMS sensors industry may not know that ULVAC started as an equipment supplier to the food industry. In 1952 ULVAC began supplying freeze-drying equipment – which relies on vacuum technology — to food companies tasked with providing long-lasting foods and beverages for the U.S. military under the Marshall Plan. Think instant soup, ramen noodles and Tang. While ULVAC’s technology portfolio is now very broad — spanning deposition equipment for the semiconductor industry, vacuum brazing for automotive, and even vacuum freeze-drying of vaccines that can be shipped dry but combined with distilled water for administration — the company has kept a hand in food technology. ULVAC’s vacuum cooling equipment rapidly and safely cools foods, dramatically increasing shelf life.The CIA is at the forefront of innovation in food technology, so we worked with them to test a vacuum cooling system that can also be used in the kitchen or in the field. In the Central Valley of California, for example, it can be 104ºF in the fields where lettuce is picked; our vacuum cooling system can cool that lettuce down to 47ºF in minutes.The CIA is also developing prepared foods for industrial settings such as university cafeterias and airlines. A prepared chicken dish, for example, might be cooked at 350ºF and then cooled to refrigeration temperatures. The potential problem is that bacteria can grow when you cool that food for storage. Some of The CIA test kitchens in California are using ULVAC’s vacuum cooling system to quickly and safely cool prepared foods.Vacuum-cooling is just one stage in food production, of course. Sensors are also widely used in food production and safety.SEMI: How do The CIA test kitchens use sensors?Mount: Nearly all aspects of production, processing and management in agricultural and food systems involve measurement of product and resource attributes. Sensors are a natural fit here as they can provide inspection capabilities that are accurate, fast and consistent. I plan to dive into some specific examples of the ways that The CIA and the MOC Research Collaborative are employing sensors to increase the safety of food and agricultural production.SEMI: What would you like MSEC attendees to take away from your presentation?Mount: I love knowing that the work that we do in this industry can benefit humanity. Applying our various technologies to food and agricultural production is just one way to do that. I encourage MSEC attendees to explore those markets that improve human quality of life – as well as the life and health of our planet and its other inhabitants. ULVAC Technologies senior advisor David Mount is a 35-year veteran of the vacuum and thin film equipment industry. He tried to retire from ULVAC but they would not let him go! David consults with ULVAC on strategic projects such as the company’s collaboration with the CIA.He will present Sensors in Food and Agriculture on Tuesday, October 30 at the MEMS Sensors Executive Congress.Register today to learn more about how sensors are transforming the food industry.Nishita Rao is a marketing manager at SEMI.

Electronic EquipmentGlobal electronic equipment production is in its traditional “fall busy season” as the consumer driven end markets ramp up for the holiday season (Chart 1). Both normal seasonality and organic growth are driving this year’s upturn. September 2018 electronic equipment output was up almost 10% over the same month last year. This actual year-over-year growth when overlaid on an autumn seasonal upturn is providing a nice end of year finish. Source: Custer Consulting Group based on regional data American Electronic Supply ChainChart 2 shows the annualized (12/12) and 3-month (3/12) growth of the U.S./North American supply chain. Aside from the computer sector, all the domestic end markets are expanding driven by defense, electromedical, instruments and control equipment. Total domestic electronic equipment orders were up 8.2% in August 2018 versus August 2017.For components there are clear indications of slowing growth. Printed circuit board orders eased to a +2.7% expansion rate on a 3-month basis and passive component orders contracted 0.2%.The semiconductor industry appears to be coming down from its recent bubble as domestic SEMI capital equipment growth cooled to +3.8% and chip shipments to North America also slowed (to a still respectable) +15% on a 3-month (3/12) basis. Source: Custer Consulting Group based on U.S. Department of Commerce, IPC, SIA/WSTS and SEMI data Geographic ShiftsSemiconductors and semiconductor capital equipment shipments provide good insight into the changing center of gravity of world electronic production.Chart 3 shows semiconductor shipments to each region. This is not regional production but rather consumption -- an indication of regional demand. It effectively measures electronic assembly activity by area. In August over 62% of the world’s chip value was consumed in in Asia/Pacific with another 8.1% used in Japan. Europe consumed 8.5% and North America 21.9%. Chart 4 shows geographical shifts over time for semiconductor capital equipment. Although more volatile month-to-month than semiconductors, the SEMI Capex shift to Asia is obvious. Source: SIA and WSTS Walt Custer of Custer Consulting Group is an analyst focused on the global electronics industry.