Fasten your seatbelts, everybody – the semiconductor industry is taking off again. Why? Because according to market analysts, the technology industry is booming thanks to global megatrends including the internet of things (IoT), cloud computing, robots and smart manufacturing, blockchain, 3D printing, AR/VR, drones and autonomous vehicles. And semiconductors are at the heart of it all.
No wonder there was such enthusiasm and excitement displayed at SEMICON West 2018, especially during the SEMI Market Symposium. Kiterocket was there, and we were listening. Here’s what you need to know.
What’s Driving Growth?
Bob Johnson, Gartner, predicted that the semiconductor industry will exceed $500B in 2019, only two years after it exceeded $400B. This is a big deal, because it took the industry seven years to grow from $300B in 2010 to $400B in 2017. Ajit Manocha, president of SEMI, set the bar to reach a $1T by 2030.
According to Johnson, major growth engines are no longer just consumer applications. There are commercial and industrial drivers as well, which is a very good sign.
AI is the Oil of the Century
All the megatrends are leaning on artificial intelligence (AI), which is being fueled by the data explosion. The need to crunch and compute data means the AI market could exceed $1T by 2021, predicted Raman Chitkara, PricewaterhouseCoopers.
According to keynote speaker, Dr. John E. Kelly III, IBM, AI, and machine learning are the only way to extract insights from the enormous amount of data that we are generating now. He gave a glimpse of the Watson Debater, which not only answer questions, but can listen to an argument, reason, and provide responses.
We’ve had basic AI capabilities since 2010, but to get to the point where AI is built into everything and provides all we need to know, requires compute power, algorithms and data.
“Systems have no intelligence until they are fed information,” said Kelly. “The CPU will play a role to handle massive amounts of data.”
He predicted we will never see another traditional super computer. AI and quantum computing are the future.
A Look at China
Despite all these technology breakthroughs, Chitkara reminded us that no major disruption will have an impact without the right global economic conditions. He said the trade disputes are a key economic indicator that can have an impact on business confidence.
In particular, the tariffs the US imposed on China, and their impact on the industry was big news. Chitkara said, in achieving its ambitions to be self-reliant, China will double down efforts and continue to grow at double-digit rates.
“Trade regulations will make things a little bumpy for China, but they will still make it,” he said
Bob Maire, Semiconductor Advisors, says the situation changes daily. In general, he said the trade war is inspiring the Chinese government to open its $100B check book to achieve its Made in China 2025 initiatives. China aspires to be the leader in AI, VR, and 5G, as well as intelligence and defense technology.
China already accounts for 50% of AI’s $15.7T market, and Maire noted that China is the largest market in the world. Doing business with China is critical to the success of semiconductor manufacturing companies.
According to Clark Tseng, market analysis at SEMI, China is positioned to become the #2 semiconductor equipment manufacturer and may surpass Korea in that effort.
Maire’s recommendations for doing business in China were tailored for a US audience, but could be applied to the rest of the world. He suggested that companies view China’s growing semiconductor industry as an opportunity, but to proceed cautiously and invest with eyes wide open. China’s semiconductor manufacturers will need leading-edge equipment to make competitive chips.
Prepare for success
With all the developments in AI and machine learning, semiconductor manufacturing companies who invest in smart manufacturing now will have the competitive edge. Humans and robots working together makes possible adaptive manufacturing, predictive maintenance and demand-driven manufacturing.
“The time is ripe for smart manufacturing to take place, and I think it will take place in the next five years,” said Chitkara.
What else can semiconductor companies do to prepare for success during this growth spurt? The analysts offered some suggestions:
Chitkara advised attendees to show a higher level of agility. “We can’t predict the future, and we don’t know what opportunities or challenges will come a long,” he said. He did, however, offer a few must-haves:
- Have digital security and transparency
- Have a global mindset with a global presence. Don’t focus on regionalism
- A low cost base
- Earn and keep trust
- Partner with regulators
- Communicate frequently
- Foster a culture of adaptability
In addition, he advised companies to form partnerships and alliances to create the potential for change within the leading players.
This post merely touches the tip of SEMICON West content. We’ve pulled together a short list of good reads if you’re looking for more information on some of the topics we addressed here.
Rick Merritt, EE Times
Françoise von Trapp, 3D InCites
- SEMICON West 2018: Smart Starts Where?
- What Should Replace “2.5D” in the Heterogeneous Integration Nomenclature?
Herb Reiter, 3D InCites
Scott Stevens, SEMI Engineering