23 January 2013
Semiconductor industry must change its ways, says Penn
The semiconductor industry has to address a number of fundamental issues in the near future, claims Malcolm Penn, pictured, chairman of market watcher Future Horizons. "The reason is the current model won't solve the problems it is facing," he said.
Speaking at Future Horizon's 2013 Industry Forecast Seminar, Penn pointed to issues such as the 450mm transition, lithography and the rise of the foundry sector – and TSMC in particular.
"TSMC is dominant," Penn noted, "with more than half of all revenues and all the profit – no other foundries are profitable in the way TSMC is. But is this good for the industry?," he questioned. One potential solution is the emergence of what he terms the IDM foundry. "This comprises companies such as Intel and Samsung selling some of their spare capacity. While they aren't competing with TSMC at the moment, will they take the big customers in the future and will TSMC be happy with that?" The other option is companies such as TSMC dedicating fabs to one company, with all the risk that entails.
Other issues on Penn's agenga include post cmos chip design – 'what impact will something other than cmos have?' – and the need for general programmable architectures. These, he contended, will be needed as variability becomes a more serious problem. "If you can tolerate defects with a more flexible chip architecture, manufacturers will get cost and yield advantages," he noted.
But the biggest challenge on Penn's list is the industry itself, which he sees as being too focused on 'rape and pillage'. "The way in which semiconductor companies do business isn't suitable for today's industry," he asserted. "Companies still feel it appropriate to turn supply chains on and off at will," he said, alluding to the recent issues with Apple and Sharp. "They can't behave in that way and need to show more responsibility."
In Penn's opinion, the industry should take the Airbus approach, with collaboration, rather than adversity. "The Airbus model is better," Penn said. "Companies can be successful within consortia and the chip industry has to work in the same way. It's time for the industry to change."