iSuppli recently reported that although the global semiconductor industry will not repeat the blowout performance anticipated for this year in 2011, growth will continue due to the ongoing recovery in the global economy and electronics market.
According to iSuppli, global semiconductor revenue will reach $317.4 billion in 2011, up 5.1 percent from $302 billion projected for 2010. This growth cannot compare to the torrid 32 percent increase that the industry will see in 2010. With the worst of the recession behind us, revenue will continue to climb steadily after this year. Semiconductor revenue will rise to approximately $357.4 billion in 2014.
iSuppli also said that there are indications that softening demand will take hold in some segments, starting in the fourth quarter and continuing through the first quarter of 2011.
Thanks to Jon Cassell and Debra Jaramilla, I managed to catch up with Sharon Stiefel, analyst for semiconductor inventory and manufacturing for iSuppli to discuss this a bit more.
I first asked Sharon what was the main reason behind iSuppli trimming its 2010 semicon revenue forecast to 32 percent, down from its previous outlook of 35.1 percent.
She said: “The main reason for the reduction in the forecast was an over-estimate of Q2 semiconductor revenues. Factoring in the results for Q2, and calculating the numbers based on a projected slower second half, brought the overall 2010 forecast down from 35.1 percent to 32 percent.”
Inventory corrections vs. industry decline
It has been reported elsewhere that the business climate for the semiconductor industry is deteriorating. Does iSuppli believe in this?
Stiefel said: “We would disagree. There are pockets or regions where it is reported that growth is declining. However, it appears that those are inventory corrections vs. industry decline.
“With all the innovations in electronics going forward, in every sector, semiconductor content in products will continue for the foreseeable future.”
2010 is not 2000!
It has also been said that the year 2010 is becoming very reminiscent of the year 2000, where poor inventory control, fear of IC shortages, and concerns over long waiting times for leading-edge equipment spelled disaster, and led to the year ending with $10 billion in excess IC capacity and a shattered equipment industry that took years to claw out of the red and has never fully recovered until this year. Does iSuppli see a similar pattern as well?
Stiefel noted: “A lack of visibility going into Q4, combined with an inventory correction at OEM customers provides the possibility for inventories to rise to undesirable levels. This, however, is a relatively minor event compared to the situation in 2000-2001.
“Keep in mind that this recession didn’t put any major semiconductor companies out of business. They were able to reduce their production levels initially and work their way back to record revenues, gross margins and profits in 2010, at a record pace of recovery.”
Saturday, October 30, 2010
Friday, October 29, 2010
Is global semicon inventory level headed for oversupply in Q3?
Early this month, iSuppli had indicated that semiconductor inventory levels may have headed into oversupply territory in Q3.
It said: "Semiconductor Days Of Inventory (DOI) for chip suppliers are estimated to have climbed to 75.9 days in the third quarter of 2010, up 1.5 days from the second-quarter. DOI in the third quarter also was 4.8 percent higher than the seasonally adjusted average for the period."
iSuppli added that the value of inventory was not been this high since the second quarter of 2008, when semiconductor suppliers’ stockpiles peaked at $35.4 billion.
Thanks to Jon Cassell and Debra Jaramilla at iSuppli, I was able to speak with Sharon Stiefel, analyst for semiconductor inventory and manufacturing for iSuppli on this situation.
Is there really an oversupply?
I asked Sharon Stiefel that given the growth that 2010 has seen so far, why are semiconductor inventory levels heading into oversupply territory in Q3?
She said that semiconductor inventories, overall, have risen both in terms of DOI and dollars for the past several quarters, and not yet achieved pre-recession levels last seen in 2008. "The overly lean conditions of 2009 and early 2010 are giving way to inventory levels, which are more appropriate for the strong growth experienced in 2010.
"Oversupply in Q3 2010 is not a foregone conclusion, but is possible that if the companies are not able to match manufacturing run rates with demand as the year winds to a close," she added.
Which sectors have been witnessing or recording some softness in demand and why?
Stiefel said: "Companies reporting Q3 revenues over the past two weeks have reported a softening in demand, particularly in PC and consumer end markets, attributed to the continued uncertainty in the global economy, leaving consumers unwilling to spend. A company with more exposure to these sectors has more potential of excessive inventories, versus a company with a more balanced product portfolio."
Industry needs to moderate inventories
It is also said in iSuppli's release that: 'The industry will need to moderate inventories at the appropriate time in its growth curve in order to capture current revenue opportunities while they still exist.' So, when exactly is that appropriate time?
Stiefel noted: "The appropriate time is when sales opportunities exist – projected quarters of growth, rather than revenue contraction. Semiconductor revenues are projected to grow in Q3 2010, contract in Q4 2010 and Q1 2011, and then resume moderate single digit growth for the remainder of 2011."
The iSuppli study also indicated that 'Inventory is not increasing at a uniform rate throughout the supply chain, despite the overall expansion during the past four quarters.' Well, does that suggest the industry has been neglecting this situation? If yes, why?
According to Stiefel, inventory management is a high priority for companies, and this statement is reflective of each sector’s unique responses to the supply/demand balance.
What's the situation like in the foundries and how do they stand against the fabless companies?
She indicated that foundries are running at near full capacity and inventory levels have risen to meet this high utilization level. Fabless companies as a group have seen a jump in inventory levels, returning to pre-recessionary levels in Q2 2010. "The days of inventory growth for both foundries and fabless companies are more in line with projected revenue growth," she added.
In what ways will makers seek to balance the "the current situation of long lead times and capacity constraints against concerns regarding of softening demand through the end of 2010'?
Stiefel said: "Companies have adopted different strategies for increasing capacity to bring lead times down to targeted levels, such as outsourcing capacity to front end fabs or back end assembly and test facilities, or purchasing equipment to relieve manufacturing bottlenecks.
"Thus far, in the Q3 reporting period, several semiconductor manufacturers are reporting that lead times are returning to normal, and component shortages are becoming a more isolated occurrence. This is an indication that balance is being realized by those particular companies."
Preventing inventory bubble burst!
Finally, is iSuppli seeing a softening of global demand? Will makers be able to prevent the inventory bubble burst from happening?
According to her, all indicators are that global growth is continuing, albeit at a slower pace than anticipated. "I believe that this data is no surprise to manufacturers, who will continue to keep a tight reign on inventories, and avoid a 'bubble' situation."
Part 2 of my discussion with Sharon will look into whether the global semiconductor industry set for a soft landing in 2011!
It said: "Semiconductor Days Of Inventory (DOI) for chip suppliers are estimated to have climbed to 75.9 days in the third quarter of 2010, up 1.5 days from the second-quarter. DOI in the third quarter also was 4.8 percent higher than the seasonally adjusted average for the period."
iSuppli added that the value of inventory was not been this high since the second quarter of 2008, when semiconductor suppliers’ stockpiles peaked at $35.4 billion.
Thanks to Jon Cassell and Debra Jaramilla at iSuppli, I was able to speak with Sharon Stiefel, analyst for semiconductor inventory and manufacturing for iSuppli on this situation.Is there really an oversupply?
I asked Sharon Stiefel that given the growth that 2010 has seen so far, why are semiconductor inventory levels heading into oversupply territory in Q3?
She said that semiconductor inventories, overall, have risen both in terms of DOI and dollars for the past several quarters, and not yet achieved pre-recession levels last seen in 2008. "The overly lean conditions of 2009 and early 2010 are giving way to inventory levels, which are more appropriate for the strong growth experienced in 2010.
"Oversupply in Q3 2010 is not a foregone conclusion, but is possible that if the companies are not able to match manufacturing run rates with demand as the year winds to a close," she added.
Which sectors have been witnessing or recording some softness in demand and why?
Stiefel said: "Companies reporting Q3 revenues over the past two weeks have reported a softening in demand, particularly in PC and consumer end markets, attributed to the continued uncertainty in the global economy, leaving consumers unwilling to spend. A company with more exposure to these sectors has more potential of excessive inventories, versus a company with a more balanced product portfolio."
Industry needs to moderate inventories
It is also said in iSuppli's release that: 'The industry will need to moderate inventories at the appropriate time in its growth curve in order to capture current revenue opportunities while they still exist.' So, when exactly is that appropriate time?
Stiefel noted: "The appropriate time is when sales opportunities exist – projected quarters of growth, rather than revenue contraction. Semiconductor revenues are projected to grow in Q3 2010, contract in Q4 2010 and Q1 2011, and then resume moderate single digit growth for the remainder of 2011."
The iSuppli study also indicated that 'Inventory is not increasing at a uniform rate throughout the supply chain, despite the overall expansion during the past four quarters.' Well, does that suggest the industry has been neglecting this situation? If yes, why?
According to Stiefel, inventory management is a high priority for companies, and this statement is reflective of each sector’s unique responses to the supply/demand balance.
What's the situation like in the foundries and how do they stand against the fabless companies?
She indicated that foundries are running at near full capacity and inventory levels have risen to meet this high utilization level. Fabless companies as a group have seen a jump in inventory levels, returning to pre-recessionary levels in Q2 2010. "The days of inventory growth for both foundries and fabless companies are more in line with projected revenue growth," she added.
In what ways will makers seek to balance the "the current situation of long lead times and capacity constraints against concerns regarding of softening demand through the end of 2010'?
Stiefel said: "Companies have adopted different strategies for increasing capacity to bring lead times down to targeted levels, such as outsourcing capacity to front end fabs or back end assembly and test facilities, or purchasing equipment to relieve manufacturing bottlenecks.
"Thus far, in the Q3 reporting period, several semiconductor manufacturers are reporting that lead times are returning to normal, and component shortages are becoming a more isolated occurrence. This is an indication that balance is being realized by those particular companies."
Preventing inventory bubble burst!
Finally, is iSuppli seeing a softening of global demand? Will makers be able to prevent the inventory bubble burst from happening?
According to her, all indicators are that global growth is continuing, albeit at a slower pace than anticipated. "I believe that this data is no surprise to manufacturers, who will continue to keep a tight reign on inventories, and avoid a 'bubble' situation."
Part 2 of my discussion with Sharon will look into whether the global semiconductor industry set for a soft landing in 2011!
Thursday, October 28, 2010
Xilinx announces first stacked silicon interconnect technology
Xilinx Inc. announced the industry's first stacked silicon interconnect technology. It proposes to deliver breakthrough capacity, bandwidth and power savings using multiple FPGA die in a single package for applications that require high-transistor and logic density, as well as tremendous levels of computational and bandwidth performance.
Xilinx has taken a 3D packaging approach that makes use of passive silicon-based interposers, microbumps and through-silicon vias (TSV) to deliver multi-die programmable platforms. As the interposer is passive, it does not dissipate any heat beyond what's consumed by an FPGA die.
The stacked silicon interconnect technology offers 2X FPGA capacity advantage at each process node. It is a core part of Virtex-7 family. Also, the stacked silicon interconnect technology is supported by standard design flows.
Xilinx has been accelerating FPGA transition to the heart of the system. David L. Myron, senior manager, High Volume Products, Product and Solutions Management, Xilinx, revealed that a lot of Xilinx's customers are doing FPGA starts rather than ASIC starts as that seems more viable. Customers are now asking for much more -- over 2X today's logic capacity, many more high-speed serial transceivers as well as processing elements, as well as much more internal memory to store data. "The challenge is delivering 'more than Moore'," he said.
Myron cited certain challenges. These include availability and capability -- the largest FPGAs are only viable later in the life cycle. Power and bandwidth pose additional challeges. The traditional mitigation techniques are no longer adequate. "One of the trends we have seen is that while gate count has gone up at a certain rate, the I/Os have not," he added. Hence, innovation is the need of the hour to meet capacity requirements.
The stacked silicon interconnect technology is addressing all of these challenges, easily meeting the needs of high bandwidth, low latency and low power. This Xilinx innovation offers massive number of low latency, die-to-die connections. Besides, there is no wasted I/O power.
For applications requiring high-transistor and logic density for high levels of computational and bandwidth performance, these 28nm platforms will deliver significantly higher capacities, resources and power savings than possible in a monolithic die approach.
Suresh Ramalingam, director, Package Design and Advanced Package Development, Xilinx, said that Xilinx's FPGA architectural innovation has been at the heart of the technology. FPGA slices -- which are ASMBL (application specific modular blocks) optimized FPGA slices -- are placed side by side. Use of silicon interposer enables high bandwidth connectivity. He added, "We have enabled direct connections to the logic region."
The stacked silicon interconnect technology harnesses proven technology quite uniquely -- such as microbumps, TSV, passive silicon interposer (65nm) and side-by-side die layout. The technology enables 100x bandwidth/watt advantage over conventional methods. It also delivers feature-rich FPGAs.
Ramalingam added: "Going from 40nm to 28nm, there is 3.5X times improvement in logic cells. When we bring 28nm to market, we will have another 2.8X advance in capacity. Xilinx is providing optimized ISE design suite flows for a variety of users.
With software support available from Xilinx in ISE Design Suite 13.1, currently available to beta customers, the 28nm Virtex-7 LX2000T device will be the world's first multi-die FPGA and provide over 3.5X logic capacity of the largest current-generation Xilinx 40nm FPGA with serial transceivers and 2.8X the logic capacity of the largest competing 28nm FPGA with serial transceivers. Initial devices will be available in the second half of 2011.
Xilinx has benefitted by collaborating with technology leaders such as leading fabless and fablite companies, equipment manufacturers, fabs and OSAT, as well as industry consortia such as imec, Sematech, SEMI, etc.
The India launch was held today, October 28th, while the Taiwan launch was two days ago.
Xilinx has taken a 3D packaging approach that makes use of passive silicon-based interposers, microbumps and through-silicon vias (TSV) to deliver multi-die programmable platforms. As the interposer is passive, it does not dissipate any heat beyond what's consumed by an FPGA die.The stacked silicon interconnect technology offers 2X FPGA capacity advantage at each process node. It is a core part of Virtex-7 family. Also, the stacked silicon interconnect technology is supported by standard design flows.
Xilinx has been accelerating FPGA transition to the heart of the system. David L. Myron, senior manager, High Volume Products, Product and Solutions Management, Xilinx, revealed that a lot of Xilinx's customers are doing FPGA starts rather than ASIC starts as that seems more viable. Customers are now asking for much more -- over 2X today's logic capacity, many more high-speed serial transceivers as well as processing elements, as well as much more internal memory to store data. "The challenge is delivering 'more than Moore'," he said.
Myron cited certain challenges. These include availability and capability -- the largest FPGAs are only viable later in the life cycle. Power and bandwidth pose additional challeges. The traditional mitigation techniques are no longer adequate. "One of the trends we have seen is that while gate count has gone up at a certain rate, the I/Os have not," he added. Hence, innovation is the need of the hour to meet capacity requirements.
The stacked silicon interconnect technology is addressing all of these challenges, easily meeting the needs of high bandwidth, low latency and low power. This Xilinx innovation offers massive number of low latency, die-to-die connections. Besides, there is no wasted I/O power.
For applications requiring high-transistor and logic density for high levels of computational and bandwidth performance, these 28nm platforms will deliver significantly higher capacities, resources and power savings than possible in a monolithic die approach.
Suresh Ramalingam, director, Package Design and Advanced Package Development, Xilinx, said that Xilinx's FPGA architectural innovation has been at the heart of the technology. FPGA slices -- which are ASMBL (application specific modular blocks) optimized FPGA slices -- are placed side by side. Use of silicon interposer enables high bandwidth connectivity. He added, "We have enabled direct connections to the logic region."
The stacked silicon interconnect technology harnesses proven technology quite uniquely -- such as microbumps, TSV, passive silicon interposer (65nm) and side-by-side die layout. The technology enables 100x bandwidth/watt advantage over conventional methods. It also delivers feature-rich FPGAs.
Ramalingam added: "Going from 40nm to 28nm, there is 3.5X times improvement in logic cells. When we bring 28nm to market, we will have another 2.8X advance in capacity. Xilinx is providing optimized ISE design suite flows for a variety of users.With software support available from Xilinx in ISE Design Suite 13.1, currently available to beta customers, the 28nm Virtex-7 LX2000T device will be the world's first multi-die FPGA and provide over 3.5X logic capacity of the largest current-generation Xilinx 40nm FPGA with serial transceivers and 2.8X the logic capacity of the largest competing 28nm FPGA with serial transceivers. Initial devices will be available in the second half of 2011.
Xilinx has benefitted by collaborating with technology leaders such as leading fabless and fablite companies, equipment manufacturers, fabs and OSAT, as well as industry consortia such as imec, Sematech, SEMI, etc.
The India launch was held today, October 28th, while the Taiwan launch was two days ago.
Wednesday, October 27, 2010
Why has the semicon equipment bubble really burst? - II
Here's the concluding part of my discussion with Dr. Robert Castellano of The Information Network.
Repercussions of a deteriorating semiconductor industry
I asked Dr. Castellano regarding the repercussions of a deteriorating semiconductor industry.
He said that the semiconductor equipment industry seems to be in serious trouble. There could possible be little growth in 2011, and the how is that there will be sufficient pushouts in equipment that revenues are moved to 2011 from 2010.
Dr. Castellano said: "We warned two months ago about pushouts, and today, Veeco stated that they “recently experienced rescheduling of tool shipments from the fourth quarter into the first quarter by several customers in Korea and Taiwan”. In other words, pushouts! We will continue to see this more and more.
"Problem is, will the equipment vendors admit it? ASML vehemently denied any customers’ pushouts last quarter, but with tools selling for $35 million each and customers such as Nanya and Inotera announcing losses, there is no way in creation pushouts won’t happen.
"Then, there is the issue of 450mm wafers. The only ones pushing it are the semicons, because they recognized that they could generate twice the number of chips for almost the same capital equipment cost. The equipment industry was dramatically impacted by the 300mm transition, and growth was nearly flat from 2001 to 2009. Not so for the semicons.
"No equipment supplier wants 450mm, it is being pushed by Sematech and Intel, plus a consortium in Europe that feels that perhaps 450mm will knock off competitors and they can make up the vacuum in sales. Only the top 15 equipment suppliers will survive."
How will pushouts benefit the industry?
On the subject of industry pushouts being highlighted time and again, it is also necessary to see whether and how will these benefit the industry in the long run.
Besides the reasons mentioned earlier, semiconductor sales are intimately tied to the economy. There is a direct correlation between semiconductor sales and GDP, as well as the PLIs of The Information Network. If the economy is robust, more money is available to purchase electronic items containing semiconductors. The reverse is true, indicative of the present economic climate.
The Information Network has also indicated that firms will announce lower results, and it'd get worse in the following quarter. Why will this happen and which firms could be likely 'hurt'?
Dr. Castellano said: "This will happen because the crest in the tidal wave was only reached in the past month or so, and it is a long and slippery slope down because it went so high up to begin with.
"The DRAM manufacturers will be hit the hardest. Growth was strongest for them for the first half of the year, where sales grew 135 percent in Q2 2010 compared to Q2 2009."
Is there a way out? If yes, when?
Finally, when will there be some recovery in the semiconductor equipment sales and why? Surely, as with everything, there has to be a way out!
Dr. Castellano concluded: "We see minimal growth in 2011, again depending on macroeconomic factors. We see two years of downturn in the industry – 2012 and 2013."
Repercussions of a deteriorating semiconductor industry
I asked Dr. Castellano regarding the repercussions of a deteriorating semiconductor industry.
He said that the semiconductor equipment industry seems to be in serious trouble. There could possible be little growth in 2011, and the how is that there will be sufficient pushouts in equipment that revenues are moved to 2011 from 2010.
Dr. Castellano said: "We warned two months ago about pushouts, and today, Veeco stated that they “recently experienced rescheduling of tool shipments from the fourth quarter into the first quarter by several customers in Korea and Taiwan”. In other words, pushouts! We will continue to see this more and more.
"Problem is, will the equipment vendors admit it? ASML vehemently denied any customers’ pushouts last quarter, but with tools selling for $35 million each and customers such as Nanya and Inotera announcing losses, there is no way in creation pushouts won’t happen.
"Then, there is the issue of 450mm wafers. The only ones pushing it are the semicons, because they recognized that they could generate twice the number of chips for almost the same capital equipment cost. The equipment industry was dramatically impacted by the 300mm transition, and growth was nearly flat from 2001 to 2009. Not so for the semicons.
"No equipment supplier wants 450mm, it is being pushed by Sematech and Intel, plus a consortium in Europe that feels that perhaps 450mm will knock off competitors and they can make up the vacuum in sales. Only the top 15 equipment suppliers will survive."
How will pushouts benefit the industry?
On the subject of industry pushouts being highlighted time and again, it is also necessary to see whether and how will these benefit the industry in the long run.
Besides the reasons mentioned earlier, semiconductor sales are intimately tied to the economy. There is a direct correlation between semiconductor sales and GDP, as well as the PLIs of The Information Network. If the economy is robust, more money is available to purchase electronic items containing semiconductors. The reverse is true, indicative of the present economic climate.
The Information Network has also indicated that firms will announce lower results, and it'd get worse in the following quarter. Why will this happen and which firms could be likely 'hurt'?
Dr. Castellano said: "This will happen because the crest in the tidal wave was only reached in the past month or so, and it is a long and slippery slope down because it went so high up to begin with.
"The DRAM manufacturers will be hit the hardest. Growth was strongest for them for the first half of the year, where sales grew 135 percent in Q2 2010 compared to Q2 2009."
Is there a way out? If yes, when?
Finally, when will there be some recovery in the semiconductor equipment sales and why? Surely, as with everything, there has to be a way out!
Dr. Castellano concluded: "We see minimal growth in 2011, again depending on macroeconomic factors. We see two years of downturn in the industry – 2012 and 2013."
Tuesday, October 26, 2010
Why has the semicon equipment bubble really burst? - I
Early today, I'd mentioned about receiving an interesting report from The Information Network — where it said that the global semiconductor equipment industry bubble has burst!
It made interesting use of an analogy around “The Emperor’s New Clothes,” a short tale by Hans Christian Andersen and the global semiconductor industry. So, I got in touch with Dr. Robert N. Castellano, president of The Information Network, New Tripoli, USA, to find out more.
Just why did the bubble burst?
I started by asking him why The Information Network has been pointedly indicating that the semicon equipment bubble has burst?
He said: "If we take a look at the SEMI book-to-bill ratio, bookings were down from $1,837 million in July and $1,816 million in August to $1,616 million in September. Keep in mind that these are three-month moving averages. so that September's numbers were proped up by stronger July and August bookings.
"Additional data come from our proprietary leading indicators (PLI) that we have developed obver the past 15 years. They point to changes and inflections in the economies of the world and correlate with inflections in semiconductor equipment revenues several months out. We plot SEMI's announced billings (revenue) instead of bookings, which are anticipatory. Our PLI has been trending downward for the past three months, signalling an inflection in equipment revenues. We will see this happen this quarter."
Pitfalls of two years of growth combined into one!
The report has also indicated that year 2010 is the same as 2000 -- where two years of growth were combined into one. What are the pitfalls from such a development?
Dr. Castellano added that in 2000, equipment revenues skyrocketed, followed by a severe downturn in the following year. In a typical cycle, we see about three years of growth. But not so in 2000. The reason for the large growth was inaccurate market forecasts, when some 'analysts' kept hyping shortages in certain ICs, particularly DRAMs. This led IC manufacturers to purchase more equipment and build more fabs to meet the anticipated growth.
Little did they realize that the Dell Computers of the world were also reading the same 'erroneous' forecasts and purchasing twice the number of ICs they needed for fear of shortages.
The IC companies, not realizing the customers were double dipping, thought that the phenomenon was real and kept expanding. In 2001, IC manufacturers were left with about $10 billion in excess inventory. The year 2000 coincided with Y2K. Later that year, the Internet bubble also burst. So, growth came from anticipated applications, rather than real demand.
He said: "The same thing is happening in 2010. The world is mired in poor economic conditions, and even in a good year with healthy GDP growth, semiconductor growth of 30-50 percent is almost unheard of.
"And, for 2010, in which equipment purchases were meant for technology advancements to the next node, and not for capacity increases because of demand by consumers for new gadgets, growth of 100 percent in the equipment sector was virtually impossible with purchases made in a sane process.
"However, when the forecasts coming out of SEMI and other 'analysts' pointed to hyper growth, IC manufacturers, probably for fear of not being able to secure 'minimally needed' equipment, placed orders. The problem was compounded with companies such as Samsung, that went all out and practically locked in the supply of ASML’s immersion tools. Other memory manufacturers placed orders for fear of not getting any. We warned months ago that growth in DRAMs over 100 percent was not sustainable. Sure enough, Nanya and Inotera both reported losses for 3Q10."
The emperor's new clothes
There's this interesting analogy about 'The Emperor has new clothes' with the semicon industry.
Dr. Castellano elaborated that in this scenario, they see the Emperor as the executives of the DRAM manufacturers. The rest of the cast remains the same – tailors are 'analysts' and the child is The Information Network that warned the Emperor of problems with no success.
Here, the citizens are the mainstream press. They continue to publish forecasts from these 'analysts' and never call them to the carpet about their results or how they seem to change monthly.
Well, as a member of the technology press, I have tried my best, and sincerely. I really don't know with how much success, but I do try and call or email each analyst, seeking more insights, which are covered in my posts.
Industry overlooking repeated warnings?
How can the industry afford to not overlook repeated warnings? This is peculiar!
According to Dr. Castellano, certain 'analysts' -- right or wrong, get covered in all press releases. They are referenced by semis and equipment manufacturers as a matter of fact.
He gave an example: "Several years ago, I spoke with someone I knew in the PR department of Applied Materials. They had just published a release and quoted numbers from Dataquest. I mentioned to her that the numbers were not correct, and she owed it to her readers and investors the correct numbers. She admitted my lower numbers matched their internally derived numbers. Some months later, Applied issued another release with the same inflated numbers. I called her and she said the IR department told her that, right or wrong, she had to put a Dataquest forecast in the release.
"This is the problem in the industry. And companies get bigger because of the support, which exasperates the problem. SEMI always partners with Dataquest at ISS and Semicons. It can’t be changed."
I'll add more in a second part a bit later.
It made interesting use of an analogy around “The Emperor’s New Clothes,” a short tale by Hans Christian Andersen and the global semiconductor industry. So, I got in touch with Dr. Robert N. Castellano, president of The Information Network, New Tripoli, USA, to find out more.
Just why did the bubble burst?
I started by asking him why The Information Network has been pointedly indicating that the semicon equipment bubble has burst?
He said: "If we take a look at the SEMI book-to-bill ratio, bookings were down from $1,837 million in July and $1,816 million in August to $1,616 million in September. Keep in mind that these are three-month moving averages. so that September's numbers were proped up by stronger July and August bookings.
"Additional data come from our proprietary leading indicators (PLI) that we have developed obver the past 15 years. They point to changes and inflections in the economies of the world and correlate with inflections in semiconductor equipment revenues several months out. We plot SEMI's announced billings (revenue) instead of bookings, which are anticipatory. Our PLI has been trending downward for the past three months, signalling an inflection in equipment revenues. We will see this happen this quarter."
Pitfalls of two years of growth combined into one!
The report has also indicated that year 2010 is the same as 2000 -- where two years of growth were combined into one. What are the pitfalls from such a development?
Dr. Castellano added that in 2000, equipment revenues skyrocketed, followed by a severe downturn in the following year. In a typical cycle, we see about three years of growth. But not so in 2000. The reason for the large growth was inaccurate market forecasts, when some 'analysts' kept hyping shortages in certain ICs, particularly DRAMs. This led IC manufacturers to purchase more equipment and build more fabs to meet the anticipated growth.
Little did they realize that the Dell Computers of the world were also reading the same 'erroneous' forecasts and purchasing twice the number of ICs they needed for fear of shortages.
The IC companies, not realizing the customers were double dipping, thought that the phenomenon was real and kept expanding. In 2001, IC manufacturers were left with about $10 billion in excess inventory. The year 2000 coincided with Y2K. Later that year, the Internet bubble also burst. So, growth came from anticipated applications, rather than real demand.
He said: "The same thing is happening in 2010. The world is mired in poor economic conditions, and even in a good year with healthy GDP growth, semiconductor growth of 30-50 percent is almost unheard of.
"And, for 2010, in which equipment purchases were meant for technology advancements to the next node, and not for capacity increases because of demand by consumers for new gadgets, growth of 100 percent in the equipment sector was virtually impossible with purchases made in a sane process.
"However, when the forecasts coming out of SEMI and other 'analysts' pointed to hyper growth, IC manufacturers, probably for fear of not being able to secure 'minimally needed' equipment, placed orders. The problem was compounded with companies such as Samsung, that went all out and practically locked in the supply of ASML’s immersion tools. Other memory manufacturers placed orders for fear of not getting any. We warned months ago that growth in DRAMs over 100 percent was not sustainable. Sure enough, Nanya and Inotera both reported losses for 3Q10."
The emperor's new clothes
There's this interesting analogy about 'The Emperor has new clothes' with the semicon industry.
Dr. Castellano elaborated that in this scenario, they see the Emperor as the executives of the DRAM manufacturers. The rest of the cast remains the same – tailors are 'analysts' and the child is The Information Network that warned the Emperor of problems with no success.
Here, the citizens are the mainstream press. They continue to publish forecasts from these 'analysts' and never call them to the carpet about their results or how they seem to change monthly.
Well, as a member of the technology press, I have tried my best, and sincerely. I really don't know with how much success, but I do try and call or email each analyst, seeking more insights, which are covered in my posts.
Industry overlooking repeated warnings?
How can the industry afford to not overlook repeated warnings? This is peculiar!
According to Dr. Castellano, certain 'analysts' -- right or wrong, get covered in all press releases. They are referenced by semis and equipment manufacturers as a matter of fact.
He gave an example: "Several years ago, I spoke with someone I knew in the PR department of Applied Materials. They had just published a release and quoted numbers from Dataquest. I mentioned to her that the numbers were not correct, and she owed it to her readers and investors the correct numbers. She admitted my lower numbers matched their internally derived numbers. Some months later, Applied issued another release with the same inflated numbers. I called her and she said the IR department told her that, right or wrong, she had to put a Dataquest forecast in the release.
"This is the problem in the industry. And companies get bigger because of the support, which exasperates the problem. SEMI always partners with Dataquest at ISS and Semicons. It can’t be changed."
I'll add more in a second part a bit later.
What's Farnell (element14) up to? And, semicon equipment bubble burst? Whoa!!
I’ve received two interesting reports today. One, from Premier Farnell on a name change and another from The Information Network on the troubles of the semicon equipment industry.
First, Premier Farnell plc announced the launch of a new, market leading customer proposition in Asia offering a significantly expanded inventory of products relevant to electronic design engineers, next-day delivery in Asia Pacific and an enhanced range of services, under the name element14.
I have not quite understood this move!
I wonder how is this going to help Farnell! It has had element14 for so long now. Hey, I even provided Farnell feedback on the element14 website back in July 2009 (in Bangalore), and even discussed with its executives in Singapore when they sought further queries on the feedbacks provided by me.
What’s Farnell (or element14) really up to?
At least, I don’t see any newness in Farnell’s element14 release. Unless, there’s a move to dilute the Farnell brand itself, which is and will be really strange!
I for one felt element14 was (and is) doing magnificiently as a standalone entity, and has done a great job in building a community of design engineers around itself.
The release also says that the Group’s businesses located in Australia, China, India, Malaysia, Singapore and New Zealand will be known as element14 and will offer customers and suppliers a multi-channel, multi-currency, multi-language way to source their product needs, quickly and easily.
So, I checked Farnell’s India site. Now, the India website of Farnell is confusing me. There’s a message on the site that says ‘Farnell Electronics (India) Pvt Ltd name change in progress’.
Where is the need to call Farnell by its original name in the UK, and why rename it elsewhere, especially in Asia? Is it that the brand name is not well known across Asia? What’s wrong in the first place with having two separate standalone and successful identities such as Farnell and element14?
It would be prudent on Farnell’s part to maintain element14 as the community it has been originally meant to be. For instance, why call Farnell India as element14 India all of a sudden?
I hope to hear from my friend, Ravi Pagar at Farnell soon, hopefully, in the morning. Have sent him the query. Name change or not, best wishes to element14/Farnell in its future endeavors.
Semicon equipment industry bubble burst?
Now to the second one! I also received an interesting report from The Information Network — where it says that the global semiconductor equipment industry bubble has burst!
It has also made interesting use of an analogy around "The Emperor’s New Clothes," a short tale by Hans Christian Andersen and the global semiconductor industry.
The report has set me off thinking. Just how can the global semiconductor industry afford to not overlook repeated warnings? This is peculiar! What could be the repercussions of a deteriorating semiconductor industry? The Information Network also mentioned industry pushouts. How will these benefit the industry in the long run?
I hope to speak with Dr. Castellano regarding the study and get some replies on my queries.
What’s very interesting is a prediction made at the end of this report. The Information Network says that firms such as AMAT, AMD, APD, ASML, AVZA, CAJ, FJTSY.PK, HPQ, INTC, MU, NVLS, OMG, TOELF.PK, TOSBF.PK and other IC, equipment, and material suppliers have or will be announcing their results soon. “Nearly all will point to a slowing in the next quarter in their releases and conference calls. It will get worst in the following quarter!”
Wow! That will be significant! Hey folks, I’m going to watch all of these firms very closely as they annouce their quarterly results. Suggest, you do the same.
First, Premier Farnell plc announced the launch of a new, market leading customer proposition in Asia offering a significantly expanded inventory of products relevant to electronic design engineers, next-day delivery in Asia Pacific and an enhanced range of services, under the name element14.
I have not quite understood this move!
I wonder how is this going to help Farnell! It has had element14 for so long now. Hey, I even provided Farnell feedback on the element14 website back in July 2009 (in Bangalore), and even discussed with its executives in Singapore when they sought further queries on the feedbacks provided by me.
What’s Farnell (or element14) really up to?
At least, I don’t see any newness in Farnell’s element14 release. Unless, there’s a move to dilute the Farnell brand itself, which is and will be really strange!
I for one felt element14 was (and is) doing magnificiently as a standalone entity, and has done a great job in building a community of design engineers around itself.
The release also says that the Group’s businesses located in Australia, China, India, Malaysia, Singapore and New Zealand will be known as element14 and will offer customers and suppliers a multi-channel, multi-currency, multi-language way to source their product needs, quickly and easily.
So, I checked Farnell’s India site. Now, the India website of Farnell is confusing me. There’s a message on the site that says ‘Farnell Electronics (India) Pvt Ltd name change in progress’.
Where is the need to call Farnell by its original name in the UK, and why rename it elsewhere, especially in Asia? Is it that the brand name is not well known across Asia? What’s wrong in the first place with having two separate standalone and successful identities such as Farnell and element14?
It would be prudent on Farnell’s part to maintain element14 as the community it has been originally meant to be. For instance, why call Farnell India as element14 India all of a sudden?
I hope to hear from my friend, Ravi Pagar at Farnell soon, hopefully, in the morning. Have sent him the query. Name change or not, best wishes to element14/Farnell in its future endeavors.
Semicon equipment industry bubble burst?
Now to the second one! I also received an interesting report from The Information Network — where it says that the global semiconductor equipment industry bubble has burst!
It has also made interesting use of an analogy around "The Emperor’s New Clothes," a short tale by Hans Christian Andersen and the global semiconductor industry.
The report has set me off thinking. Just how can the global semiconductor industry afford to not overlook repeated warnings? This is peculiar! What could be the repercussions of a deteriorating semiconductor industry? The Information Network also mentioned industry pushouts. How will these benefit the industry in the long run?
I hope to speak with Dr. Castellano regarding the study and get some replies on my queries.
What’s very interesting is a prediction made at the end of this report. The Information Network says that firms such as AMAT, AMD, APD, ASML, AVZA, CAJ, FJTSY.PK, HPQ, INTC, MU, NVLS, OMG, TOELF.PK, TOSBF.PK and other IC, equipment, and material suppliers have or will be announcing their results soon. “Nearly all will point to a slowing in the next quarter in their releases and conference calls. It will get worst in the following quarter!”
Wow! That will be significant! Hey folks, I’m going to watch all of these firms very closely as they annouce their quarterly results. Suggest, you do the same.
Friday, October 22, 2010
Rankings of various semicon market watchers' sales growth expectations 2010
This is a continuation of my coverage of the fortunes of the global semiconductor industry. I would like to acknowledge and thank Mike Cowan, an independent semiconductor analyst and developer of the Cowan LRA model, who has provided me the latest numbers.
Mike routinely tracks how the Cowan LRA Model sales growth forecast (each month) compares to a wide range of major semiconductor industry market watchers in order to monitor how the model's latest monthly update result "stacks up" against the competition, that is, 15 other prognosticators he routinely monitors.
Table 1 summarizes the latest sales growth forecast expectations of these 15 other semiconductor industry forecasters, thus comparing Cowan's forecast number to the rest of the crowd.
Source: Cowan's LRA model.
Cowan routinely updates his forecast numbers each month immediately following the WSTS release of its monthly actual sales numbers in order to "dynamically" predict the industry's sales posture. Consequently, the sales and sales growth output of the monthly model run does NOT "sit still" as highlighted below:
Cowan LRA model for forecasting global semicon sales --– 'divining' (mathematically) future from past
* It should be emphasized that each month’s actual global sales number published by the WSTS is a "lagging indicator" since it is released a full month after the fact.
* The Cowan LRA Model, however, "turns" this lagging actual monthly sales into a "leading indicator" by virtue of its near-term forecasting capability looking out over the next five quarters.
* This is the "beauty" of the model and, therefore, makes it dynamic in the sense that it can be run each month utilizing the most recent actual global semiconductor sales number published by the WSTS. Thus, it allows “rigorous tracking” of the near-term sales forecast outlook for the global semiconductor industry on an “almost” real-time basis.
* Consequently, the model’s monthly sales forecast does not “sit still” but “evolves” with each succeeding month’s latest published sales number. Since conditions change rapidly and unexpectedly in the semiconductor industry, industry market forecasters are hard pressed to keep up with these changes. How can the industry management be sure that a sales forecast issued two, three, or more months ago is still valid and relevant to what's happening in today’s global semiconductor market?
In order to illustrate this "does not sit still" principal embedded in the monthly update to my forecasting approach, here is a graphic showing the month-to-month evolution of year 2010 sales and sales growth forecast estimates as determined by the model from January to the present.
Source: Cowan's LRA model.
Global semicon market set for slowdown
Before I conclude, here's a wonderful piece of information sent to me (and to several others) by Dr. Robert Castellano of The Information Network. Two months ago, I had done a post with Dr. Castellano where he'd maintained that the global semicon market is set for slowdown.
The Information Network had, on September 21,issued a release similar to the report I had done with Dr. Castellano to all of its readers. This was at a time when the semiconductor market was humming along and many 'analysts' continued to up the ante in the market.
It seems that nobody believed them! Well, maybe not nobody, but few (including yours truly!). Fast forward another month and The Information Network reiterates the slowdown. Dr. Castellano says, "This time, we have a lot of company and it's somewhat vindicating."
Dr. Castellano had actually pointed out problems in the DRAM sector. "Isn't it interesting that Nanya and Inotera both reported losses for 3Q10. Again vindication for being slapped around by managers and shareholders in denial," he added.
Dr. Castellano notes: "I also pointed out that we would be seeing problems in the semiconductor equipment market, particularly lithography. Isn't it interesting that ASML went out of its way in its conference call that they were not seeing any pushouts in purchases. Interesting that ASML never bought our lithography report in the 25 years we are in business. It reminds me of when I pointed out last year that Intel was losing money on the Atom, and every conference call after that they said they were making money on the Atom (maybe Monopoly Money!), yet Intel never purchased our report on ARM versus Atom (ARM did!)."
The question now is: Has the Internet really become such a marketing tool that multibillion dollar sized companies want to save a few thousand dollars and only read headlines instead of buying insightful marketing reports? Or maybe they are just buying from the wrong market research firms.
Or well, are such companies even able to really 'understand' what's actually happening in the industry?
PS: Hope that most of you have also read that SEMI's latest North American semiconductor equipment industry Sept. 2010 book-to-bill ratio is 1.03, which is 11 percent lower than August 2010.
Mike routinely tracks how the Cowan LRA Model sales growth forecast (each month) compares to a wide range of major semiconductor industry market watchers in order to monitor how the model's latest monthly update result "stacks up" against the competition, that is, 15 other prognosticators he routinely monitors.
Table 1 summarizes the latest sales growth forecast expectations of these 15 other semiconductor industry forecasters, thus comparing Cowan's forecast number to the rest of the crowd.
Source: Cowan's LRA model.Cowan routinely updates his forecast numbers each month immediately following the WSTS release of its monthly actual sales numbers in order to "dynamically" predict the industry's sales posture. Consequently, the sales and sales growth output of the monthly model run does NOT "sit still" as highlighted below:
Cowan LRA model for forecasting global semicon sales --– 'divining' (mathematically) future from past
* It should be emphasized that each month’s actual global sales number published by the WSTS is a "lagging indicator" since it is released a full month after the fact.
* The Cowan LRA Model, however, "turns" this lagging actual monthly sales into a "leading indicator" by virtue of its near-term forecasting capability looking out over the next five quarters.
* This is the "beauty" of the model and, therefore, makes it dynamic in the sense that it can be run each month utilizing the most recent actual global semiconductor sales number published by the WSTS. Thus, it allows “rigorous tracking” of the near-term sales forecast outlook for the global semiconductor industry on an “almost” real-time basis.
* Consequently, the model’s monthly sales forecast does not “sit still” but “evolves” with each succeeding month’s latest published sales number. Since conditions change rapidly and unexpectedly in the semiconductor industry, industry market forecasters are hard pressed to keep up with these changes. How can the industry management be sure that a sales forecast issued two, three, or more months ago is still valid and relevant to what's happening in today’s global semiconductor market?
In order to illustrate this "does not sit still" principal embedded in the monthly update to my forecasting approach, here is a graphic showing the month-to-month evolution of year 2010 sales and sales growth forecast estimates as determined by the model from January to the present.
Source: Cowan's LRA model.Global semicon market set for slowdown
Before I conclude, here's a wonderful piece of information sent to me (and to several others) by Dr. Robert Castellano of The Information Network. Two months ago, I had done a post with Dr. Castellano where he'd maintained that the global semicon market is set for slowdown.
The Information Network had, on September 21,issued a release similar to the report I had done with Dr. Castellano to all of its readers. This was at a time when the semiconductor market was humming along and many 'analysts' continued to up the ante in the market.
It seems that nobody believed them! Well, maybe not nobody, but few (including yours truly!). Fast forward another month and The Information Network reiterates the slowdown. Dr. Castellano says, "This time, we have a lot of company and it's somewhat vindicating."
Dr. Castellano had actually pointed out problems in the DRAM sector. "Isn't it interesting that Nanya and Inotera both reported losses for 3Q10. Again vindication for being slapped around by managers and shareholders in denial," he added.
Dr. Castellano notes: "I also pointed out that we would be seeing problems in the semiconductor equipment market, particularly lithography. Isn't it interesting that ASML went out of its way in its conference call that they were not seeing any pushouts in purchases. Interesting that ASML never bought our lithography report in the 25 years we are in business. It reminds me of when I pointed out last year that Intel was losing money on the Atom, and every conference call after that they said they were making money on the Atom (maybe Monopoly Money!), yet Intel never purchased our report on ARM versus Atom (ARM did!)."
The question now is: Has the Internet really become such a marketing tool that multibillion dollar sized companies want to save a few thousand dollars and only read headlines instead of buying insightful marketing reports? Or maybe they are just buying from the wrong market research firms.
Or well, are such companies even able to really 'understand' what's actually happening in the industry?
PS: Hope that most of you have also read that SEMI's latest North American semiconductor equipment industry Sept. 2010 book-to-bill ratio is 1.03, which is 11 percent lower than August 2010.
Thursday, October 21, 2010
Enhancing reliability in medium voltage power line communications
Semitech Semiconductor is solving current problems faced in communications over the power grid with its line of innovative semiconductors designed to address power line noise. Owing to noise and variations in equipment and standards, communications over power grid have been historically difficult. Semitech’s proprietary technology design produces chips that reliably operate in this challenging environment.
Semitech CEO Matt Rhodes recently spoke at the Smart Grid Electronic Forum 2010, in San Jose, California on October 18-20, where he presented on "Enhancing Reliability in Medium Voltage Power Line Communications,”
Rhodes examined smart grid characteristics observed from field trials of medium voltage power-line communications and suggesting solutions that enable reliable communications. The presentation also explored using the OFDMA scheme as a means to enhance communications reliability.
Here's a snapshot of his presentation, thanks mainly to Kevin Mayberry, Lages & Associates.
Semitech Semiconductor, in conjunction with a Chinese equipment provider, has implemented OFDM to deliver robust, easy to deploy communication over the medium voltage grid.
The SM2200 is Semitech's high-speed powerline communication solution, a next generation OFDM PLC modem. The SM2200 adds OFDMA to provide most networking flexibility.
The SM2200 implements OFDM technology, and adds adaptation and multiple access features to provide the most flexibility for the networking application. OFDM and the SM2200 are proven in a broad deployment on the medium voltage grid in the Hebei province of China.
The 2000-node system has been operating reliably for nearly two years. Based on these results, a broad deployment across China’s medium voltage grid is in progress.
Semitech CEO Matt Rhodes recently spoke at the Smart Grid Electronic Forum 2010, in San Jose, California on October 18-20, where he presented on "Enhancing Reliability in Medium Voltage Power Line Communications,”
Rhodes examined smart grid characteristics observed from field trials of medium voltage power-line communications and suggesting solutions that enable reliable communications. The presentation also explored using the OFDMA scheme as a means to enhance communications reliability.
Here's a snapshot of his presentation, thanks mainly to Kevin Mayberry, Lages & Associates.
Semitech Semiconductor, in conjunction with a Chinese equipment provider, has implemented OFDM to deliver robust, easy to deploy communication over the medium voltage grid.
The SM2200 is Semitech's high-speed powerline communication solution, a next generation OFDM PLC modem. The SM2200 adds OFDMA to provide most networking flexibility.
The SM2200 implements OFDM technology, and adds adaptation and multiple access features to provide the most flexibility for the networking application. OFDM and the SM2200 are proven in a broad deployment on the medium voltage grid in the Hebei province of China.
The 2000-node system has been operating reliably for nearly two years. Based on these results, a broad deployment across China’s medium voltage grid is in progress.
Thursday, October 14, 2010
My old blog address is back! Am so happy!! :)
My dear friends, this is a great day for me! Rohit Basa, manager – Business Development (North America), ProcSys, who is currently in the USA, just responded to an email I’d sent out inviting him for Durga Puja celebrations in town!
In his mail, Rohit very kindly informed me that my old blog address — http://pradeepchakraborty.blogspot.com — is again available for fresh registration. His message to me was crystal clear: “Book it before anyone else does and direct a link to your new website. I’m a great fan of yours, your blog and articles.”
Indeed! I was overjoyed when I re-registered the same old blog address, and got it back! I even brought back the same old look!! Well, at least, most of it!!!
The sheer pain of losing my original blog and blog address last August is something extremely difficult for me to get over! The effort I’d put in to develop that blog had been immense, and the loss was really shattering, to say the least! In fact, I even used to constantly check Blogger to find out whether the old blog address was still available.
While the pain has eased a bit on getting back my old blog address, I know very well that I simply cannot bring back the original traffic that it used to have. I moved my old blog to WordPress since that day it was taken off Blogger. The blog’s doing very well on WordPress. Still, the loss of my original Blogspot blog last year has haunted me every single day!
Thanks a ton, Rohit! I am so very touched and will remain forever obliged to you!!
I chose Sagar Desai of Symantec, from the US, a very close friend, as the next one to be informed that I’d got back my old blog address. Sagar stood by me in my darkest hour — when my old blog was injected with malware and later removed by Google in the middle of August, last year.
In fact, Sagar had commented just a while ago, on seeing my Durga Puja invite — “Did not know this cultural side of yours. Good to know that your life is just not semiconductors!”
I’d then asked him whether I’d got typecast. His reply was — “That’s probably more to do with the way you brand yourself. Image set ho gaya hai! You need to break the stereotype.”
It is so very nice and touching to hear such remarks from a close friend! It shows that he cares, a lot! Perhaps, I am getting typecast as a semicon blogger.
Guess what! The other day, I was at a National Instruments event. A journalist friend and an ex-colleague, actually, found some new names for me. One was ‘Semicon Bong’ — since I’m a Bengali, and the other was ‘Semicon Bomb’! Ok, whatever that last one means.
Well, now I simply can’t wait to inform Usha Prasad, my associate and buddy, that I’ve managed to get back my old blogspot address. Usha stood by me during that time and has steadfastly been by my side since that time. I just can’t wait to see her reaction when she hears this news! She’s fast asleep now.. come morning, and this is the first thing I’m going to tell her!
Finally, many, many thanks to all of those friends who’ve stood by me all this time!
And, a very special thanks again from the bottom of my heart to Rohit! You really made my day, sorry, my year, buddy!
Here’s wishing everyone a very happy Durga Puja and Dusshera!
In his mail, Rohit very kindly informed me that my old blog address — http://pradeepchakraborty.blogspot.com — is again available for fresh registration. His message to me was crystal clear: “Book it before anyone else does and direct a link to your new website. I’m a great fan of yours, your blog and articles.”
Indeed! I was overjoyed when I re-registered the same old blog address, and got it back! I even brought back the same old look!! Well, at least, most of it!!!The sheer pain of losing my original blog and blog address last August is something extremely difficult for me to get over! The effort I’d put in to develop that blog had been immense, and the loss was really shattering, to say the least! In fact, I even used to constantly check Blogger to find out whether the old blog address was still available.
While the pain has eased a bit on getting back my old blog address, I know very well that I simply cannot bring back the original traffic that it used to have. I moved my old blog to WordPress since that day it was taken off Blogger. The blog’s doing very well on WordPress. Still, the loss of my original Blogspot blog last year has haunted me every single day!
Thanks a ton, Rohit! I am so very touched and will remain forever obliged to you!!
I chose Sagar Desai of Symantec, from the US, a very close friend, as the next one to be informed that I’d got back my old blog address. Sagar stood by me in my darkest hour — when my old blog was injected with malware and later removed by Google in the middle of August, last year.
In fact, Sagar had commented just a while ago, on seeing my Durga Puja invite — “Did not know this cultural side of yours. Good to know that your life is just not semiconductors!”
I’d then asked him whether I’d got typecast. His reply was — “That’s probably more to do with the way you brand yourself. Image set ho gaya hai! You need to break the stereotype.”
It is so very nice and touching to hear such remarks from a close friend! It shows that he cares, a lot! Perhaps, I am getting typecast as a semicon blogger.
Guess what! The other day, I was at a National Instruments event. A journalist friend and an ex-colleague, actually, found some new names for me. One was ‘Semicon Bong’ — since I’m a Bengali, and the other was ‘Semicon Bomb’! Ok, whatever that last one means.
Well, now I simply can’t wait to inform Usha Prasad, my associate and buddy, that I’ve managed to get back my old blogspot address. Usha stood by me during that time and has steadfastly been by my side since that time. I just can’t wait to see her reaction when she hears this news! She’s fast asleep now.. come morning, and this is the first thing I’m going to tell her!
Finally, many, many thanks to all of those friends who’ve stood by me all this time!
And, a very special thanks again from the bottom of my heart to Rohit! You really made my day, sorry, my year, buddy!
Here’s wishing everyone a very happy Durga Puja and Dusshera!
Tuesday, October 12, 2010
NI stresses on innovation, launches LabVIEW 2010
National Instruments hosted the the annual India LabVIEW Conference 2010 in Bangalore today, where it also launched LabVIEW 2010 - the latest version of its graphical programming environment for design, test, measurement and control applications.
Jayaram Pillai, managing director, NI-India Russia and Arabia, delivered the India LabVIEW Conference 2010 keynote by discussing how LabVIEW in India has evolved from a product to a powerful ecosystem.
"Innovation is key," said Pillai: "I earlier cribbed about innovations not happening in India. Now, I have been seeing a lot of innovations over the last five years. Today, people are very involved. They understand situations, and so innovations are possible. Growth has to come with everybody involved. Innovations are required to solve problems. We need more innovations!"
Pillai presented an example of the solar powered milk refrigeration system as an example of innovation. This is a very simple solution addressing a massive problem, especially in rural areas of India. Vehicles with solar powered milk refrigeration systems visit villages and rural areas to collect the milk, and chill it for distribution and use later. LabVIEW was the silent hero behind the scenes.
He added that designers need better and simple tools, which have to be very flexible. Tools such as LabVIEW provide immense flexibility to scientists, engineers and designers. The LabVIEW vision is: bringing software programming to the masses. For over 24 years, NI has consistently delivered performance and features based on existing technologies via LabVIEW. Another interesting highlight is that LabVIEW has always been multi-core enabled.
LabVIEW ecosystem in India
Speaking about the India LabVIEW Sphere, which is one platform providing infinite solutions across industries and applications, Pillai said that from taking simple temperature measurements to controlling the world’s largest particle accelerator, engineers and scientists use the LabVIEW platform to meet a wide range of application challenges across various industries. He added that many features of LabVIEW 2010 are based on actual feedback received from users.
LabVIEW has a robust ecosystem in India. Currently, there are over 5,000 industry applications being served via LabVIEW, though this number could be higher. Over 400 engineering colleges are teaching LabVIEW in their curriculum and there are over 25,000 LabVIEW trained engineers in the country.
LabVIEW also boasts of over 4,000 active users online and more than 200 attendees during its weekly web user groups. This number rises as and when NI's customers present. "The sphere is all about things that help and sustain the NI and LabVIEW ecosystem." added Pillai.
Jayaram Pillai, managing director, NI-India Russia and Arabia, delivered the India LabVIEW Conference 2010 keynote by discussing how LabVIEW in India has evolved from a product to a powerful ecosystem."Innovation is key," said Pillai: "I earlier cribbed about innovations not happening in India. Now, I have been seeing a lot of innovations over the last five years. Today, people are very involved. They understand situations, and so innovations are possible. Growth has to come with everybody involved. Innovations are required to solve problems. We need more innovations!"
Pillai presented an example of the solar powered milk refrigeration system as an example of innovation. This is a very simple solution addressing a massive problem, especially in rural areas of India. Vehicles with solar powered milk refrigeration systems visit villages and rural areas to collect the milk, and chill it for distribution and use later. LabVIEW was the silent hero behind the scenes.
He added that designers need better and simple tools, which have to be very flexible. Tools such as LabVIEW provide immense flexibility to scientists, engineers and designers. The LabVIEW vision is: bringing software programming to the masses. For over 24 years, NI has consistently delivered performance and features based on existing technologies via LabVIEW. Another interesting highlight is that LabVIEW has always been multi-core enabled.
LabVIEW ecosystem in India
Speaking about the India LabVIEW Sphere, which is one platform providing infinite solutions across industries and applications, Pillai said that from taking simple temperature measurements to controlling the world’s largest particle accelerator, engineers and scientists use the LabVIEW platform to meet a wide range of application challenges across various industries. He added that many features of LabVIEW 2010 are based on actual feedback received from users.
LabVIEW has a robust ecosystem in India. Currently, there are over 5,000 industry applications being served via LabVIEW, though this number could be higher. Over 400 engineering colleges are teaching LabVIEW in their curriculum and there are over 25,000 LabVIEW trained engineers in the country.
LabVIEW also boasts of over 4,000 active users online and more than 200 attendees during its weekly web user groups. This number rises as and when NI's customers present. "The sphere is all about things that help and sustain the NI and LabVIEW ecosystem." added Pillai.
Lattice intros Platform Manager family
Lattice Semiconductor Corp. has introduced the Platform Manager family -- its third-generation mixed-signal devices.
The Platform Manager product family consists of two devices -- the LPTM10-1247 and LPTM10-12107. The LPTM10-1247 device monitors 12 voltage rails and supports 47 digital I/Os, and the LPTM10-12107 device monitors up to 12 voltage rails and supports 107 digital I/Os.
The programmable devices will aim to simplify board management design significantly by integrating programmable analog and logic to support many common functions, such as power management, digital housekeeping and glue logic.
By integrating these support functions, Platform Manager devices reduce the cost of these functions compared to traditional approaches, and improves system reliability. It provides a high degree of design flexibility that minimizes the risk of circuit board re-spins.
More to follow.
The Platform Manager product family consists of two devices -- the LPTM10-1247 and LPTM10-12107. The LPTM10-1247 device monitors 12 voltage rails and supports 47 digital I/Os, and the LPTM10-12107 device monitors up to 12 voltage rails and supports 107 digital I/Os.
The programmable devices will aim to simplify board management design significantly by integrating programmable analog and logic to support many common functions, such as power management, digital housekeeping and glue logic.
By integrating these support functions, Platform Manager devices reduce the cost of these functions compared to traditional approaches, and improves system reliability. It provides a high degree of design flexibility that minimizes the risk of circuit board re-spins.More to follow.
Monday, October 11, 2010
HDS unveils industry's first 3D scaling virtual storage platform (VSP)
Last week at the Hitachi Information Forum event, Hitachi Data Systems Corp. (HDS) introduced the Hitachi Virtual Storage Platform (VSP) -- said to be the industry’s first three-dimensional (3D) scaling platform. These claim to enable organizations to scale up, out and deep for unprecedented levels of agility and cost savings in their virtualized data centers.
The VSP, along with the Hitachi Command Suite management software, offers best-in-class performance, capacity and open, multivendor storage virtualization for large businesses and enterprise organizations.
The event was graced by Randy DeMont, executive VP, Worldwide Sales, Services and Support and Phil Gann, director, Solutions, Products and Services, APAC, who discussed the VSP, along with Kevin Eggleston, senior VP and GM, APAC and Vivekanand Venugopal, VP and GM, India, Hitachi Data Systems.
More details later.
The VSP, along with the Hitachi Command Suite management software, offers best-in-class performance, capacity and open, multivendor storage virtualization for large businesses and enterprise organizations.
The event was graced by Randy DeMont, executive VP, Worldwide Sales, Services and Support and Phil Gann, director, Solutions, Products and Services, APAC, who discussed the VSP, along with Kevin Eggleston, senior VP and GM, APAC and Vivekanand Venugopal, VP and GM, India, Hitachi Data Systems.
More details later.
Tuesday, October 5, 2010
Cowan LRA model: Global semicon sales forecast update based on August 2010's actual sales
This is a continuation of my coverage of the fortunes of the global semiconductor industry. I would like to acknowledge and thank Mike Cowan, an independent semiconductor analyst and developer of the Cowan LRA model, who has provided me the latest numbers.
This Monday, (10-04-10) the WSTS posted the August 2010 global semiconductor sales report (Historical Billings Report, HBR) on its website. Therefore, with the WSTS having released its actual August 2010 global semiconductor sales number, Cowan has provided the latest monthly update to the Cowan LRA Model's derived forecast numbers.
The updated sales forecast estimates for 3Q, 4Q and 2010 decreased very slightly from the previous month's forecast estimates as summarized below.
The actual August 2010 global semiconductor sales published by the WSTS came in at $25.358 billion which is:
* 30.8 percent higher than 2009's August sales of $19.175 billion;
* Up 3.2 percent from last month's (July) sales of $24.570 billion;
* And lower (by $0.090 billion, or down 0.35 percent) compared to last month's (July's projection) sales forecast estimate, that is, $25.448 billion;
* The Cowan LRA Model's Momentum Indicator, MI, went slightly negative (-0.35 percent) compared to last month's plus posture (at +5.0 percent), as discussed below.
Cowan's momentum indicator
August 2010’s actual semiconductor sales (of $25.358 billion) came in slightly lower (by $0.090 billion) than the model’s last month's August 2010 sales forecast estimate (of $25.448 billion) representing a minus 0.35 percent delta comparing August 2010's actual sales number (published by the WSTS) to the projected forecast estimate “put forth” by the Cowan LRA forecasting model and reported last month. This percent delta represents the Cowan LRA Model's MI.
The MI is defined as the percent difference between the actual sales for a given month -- in this case August 2010’s just published actual global sales of $25.358 billion and the forecasted sales estimate for August 2010, that is, $25.448 billion, which was calculated and published last month.
The MI can be either positive or negative and is a measure of the percent deviation of the actual monthly sales number from the previous month’s prediction derived by the model’s linear regression analysis of the past 26 years of historical, actual monthly global “sales experience” as gathered and published, each month, by the WSTS.
Note: September 2010’s sales forecast estimate is projected to be $31.402 billion.
Latest monthly update
The latest monthly update to 2010's global semiconductor sales forecast estimate as determined by the Cowan LRA forecasting model notched down very slightly to $305.406 billion corresponding to an updated projected 2010 year-over-year sales growth forecast estimate of 34.9 percent.
These latest forecasted 2010 sales and sales growth estimates decreased marginally from last month's (July) reported sales and sales growth forecast estimates of $305.729 and 35.1 percent, respectively. Thus the full complement of the latest, updated sales and sales growth forecast estimates for 3Q, 4Q and 2010 are detailed in the table immediately below along with the 1Q's and 2Q's actual reported sales numbers.
The second table shows the corresponding results from last month's model run in order to compare the sequential forecast estimate numbers, namely August versus July.
Source: Cowan LRA model.
Additionally, next month's (Sept. 2010) global semiconductor sales forecast estimate is projected to be $31.402 billion, which would "translate" to an August 3MMA sales forecast estimate of $27.110 billion assuming NO (or very minor) revisions in either July or August sales numbers as part of the WSTS's September sales report.
Source: Cowan LRA model.
The 3MMA sales is normally published by the SIA (using WSTS sales numbers) as part of its monthly press release that characterizes the semiconductor industry's monthly sales and sales growth posture. The SIA's September 3MMA press release is scheduled to be announced on Monday, November 1, 2010.
Source: Cowan LRA model.
This Monday, (10-04-10) the WSTS posted the August 2010 global semiconductor sales report (Historical Billings Report, HBR) on its website. Therefore, with the WSTS having released its actual August 2010 global semiconductor sales number, Cowan has provided the latest monthly update to the Cowan LRA Model's derived forecast numbers.
The updated sales forecast estimates for 3Q, 4Q and 2010 decreased very slightly from the previous month's forecast estimates as summarized below.
The actual August 2010 global semiconductor sales published by the WSTS came in at $25.358 billion which is:
* 30.8 percent higher than 2009's August sales of $19.175 billion;
* Up 3.2 percent from last month's (July) sales of $24.570 billion;
* And lower (by $0.090 billion, or down 0.35 percent) compared to last month's (July's projection) sales forecast estimate, that is, $25.448 billion;
* The Cowan LRA Model's Momentum Indicator, MI, went slightly negative (-0.35 percent) compared to last month's plus posture (at +5.0 percent), as discussed below.
Cowan's momentum indicator
August 2010’s actual semiconductor sales (of $25.358 billion) came in slightly lower (by $0.090 billion) than the model’s last month's August 2010 sales forecast estimate (of $25.448 billion) representing a minus 0.35 percent delta comparing August 2010's actual sales number (published by the WSTS) to the projected forecast estimate “put forth” by the Cowan LRA forecasting model and reported last month. This percent delta represents the Cowan LRA Model's MI.
The MI is defined as the percent difference between the actual sales for a given month -- in this case August 2010’s just published actual global sales of $25.358 billion and the forecasted sales estimate for August 2010, that is, $25.448 billion, which was calculated and published last month.
The MI can be either positive or negative and is a measure of the percent deviation of the actual monthly sales number from the previous month’s prediction derived by the model’s linear regression analysis of the past 26 years of historical, actual monthly global “sales experience” as gathered and published, each month, by the WSTS.
Note: September 2010’s sales forecast estimate is projected to be $31.402 billion.
Latest monthly update
The latest monthly update to 2010's global semiconductor sales forecast estimate as determined by the Cowan LRA forecasting model notched down very slightly to $305.406 billion corresponding to an updated projected 2010 year-over-year sales growth forecast estimate of 34.9 percent.
These latest forecasted 2010 sales and sales growth estimates decreased marginally from last month's (July) reported sales and sales growth forecast estimates of $305.729 and 35.1 percent, respectively. Thus the full complement of the latest, updated sales and sales growth forecast estimates for 3Q, 4Q and 2010 are detailed in the table immediately below along with the 1Q's and 2Q's actual reported sales numbers.
The second table shows the corresponding results from last month's model run in order to compare the sequential forecast estimate numbers, namely August versus July.
Source: Cowan LRA model.Additionally, next month's (Sept. 2010) global semiconductor sales forecast estimate is projected to be $31.402 billion, which would "translate" to an August 3MMA sales forecast estimate of $27.110 billion assuming NO (or very minor) revisions in either July or August sales numbers as part of the WSTS's September sales report.
Source: Cowan LRA model.The 3MMA sales is normally published by the SIA (using WSTS sales numbers) as part of its monthly press release that characterizes the semiconductor industry's monthly sales and sales growth posture. The SIA's September 3MMA press release is scheduled to be announced on Monday, November 1, 2010.
Source: Cowan LRA model.
Actel’s ‘smart fusion’ with Microsemi a top draw!
Yes, this one seems to be a top draw! It is indeed a very ‘smart fusion’! In case you don’t know what I’m talking about, yesterday morning (US time), Microsemi Corp. announced that it has entered into a definitive agreement to acquire Actel Corp.
Microsemi, a leading manufacturer of high performance analog mixed-signal ICs, high reliability semiconductors and RF subsystems, will acquire Actel for $20.88 per share through a cash tender offer.
Actel is a leading supplier of low-power, mixed-signal, and radiation-tolerant FPGAs serving the Mil/aero, industrial, communication, and consumer markets. It is a leader in the satellite and space markets due to its deep knowledge of radiation tolerance, space-level qualifications, and its long history of service excellence.
In a conference call, James J. Peterson, Microsemi’s president and CEO, termed Actel as a perfect acquisition for Microsemi. Microsemi also sees lot of promise in Actel’s SmartFusion.
He said: ”We believe the addition of Actel will deliver compelling synergies to Microsemi. Actel will bring the most widely-used mixed-signal, radiation tolerant FPGA products in the aerospace and defense markets today, and the company’s products will allow Microsemi to extend its growing system-level capabilities. As Microsemi continues to move up the value chain in offering its customers system solutions that are better, faster, and more-cost effective than they can build themselves, Actel’s highly-integrated solutions will be an integral component in enabling this growth.”
“The proposed acquisition of Actel by Microsemi will create a powerful combination,” said John C. East, Actel president and CEO. “I can think of no company more complementary and better equipped to take Actel’s solutions to new heights.”
John W. Hohener, executive VP and CFO, Microsemi, added that terms of agreement have been unanimously approved by the boards of Microsemi and Actel.
The total transaction value is said to be approximately $430 million, net of Actel’s projected cash balance at closing. The transaction is subject to customary closing conditions, including the tender of a majority of the outstanding shares of Actel’s common stock and regulatory approvals, and is expected to close in Microsemi’s fiscal first quarter, ending January 2, 2011.
Microsemi expects significant synergies from this immediately accretive transaction. Based on current assumptions, It expects the acquisition to be $0.22 to $0.28 accretive in its first full calendar year ending December 2011.
For those who aren’t aware of SmartFusion, at this year’s Embedded World conference, Actel unveiled SmartFusion, the world’s first intelligent mixed signal FPGA. Actel’s SmartFusion devices feature proven FPGA fabric, a complete MCU subsystem built around a hard ARM Cortex-M3 processor and programmable analog blocks on a flash process. Embedded designers can now easily build the system they want, with all the features they need, on a single chip.
Even Vin Ratford, senior vice president, worldwide marketing and business development, Xilinx, had agreed that introducing analog/mixed signal capabilities in FPGAs is a good idea.
SmartFusion is bound to generate lot of excitement. It’s game on! I am awaiting an intelligent mixed signal FPGA from either Altera or Xilinx, or both. Congratulations are due to Actel and Microsemi.
Microsemi, a leading manufacturer of high performance analog mixed-signal ICs, high reliability semiconductors and RF subsystems, will acquire Actel for $20.88 per share through a cash tender offer.
Actel is a leading supplier of low-power, mixed-signal, and radiation-tolerant FPGAs serving the Mil/aero, industrial, communication, and consumer markets. It is a leader in the satellite and space markets due to its deep knowledge of radiation tolerance, space-level qualifications, and its long history of service excellence.
In a conference call, James J. Peterson, Microsemi’s president and CEO, termed Actel as a perfect acquisition for Microsemi. Microsemi also sees lot of promise in Actel’s SmartFusion.
He said: ”We believe the addition of Actel will deliver compelling synergies to Microsemi. Actel will bring the most widely-used mixed-signal, radiation tolerant FPGA products in the aerospace and defense markets today, and the company’s products will allow Microsemi to extend its growing system-level capabilities. As Microsemi continues to move up the value chain in offering its customers system solutions that are better, faster, and more-cost effective than they can build themselves, Actel’s highly-integrated solutions will be an integral component in enabling this growth.”
“The proposed acquisition of Actel by Microsemi will create a powerful combination,” said John C. East, Actel president and CEO. “I can think of no company more complementary and better equipped to take Actel’s solutions to new heights.”
John W. Hohener, executive VP and CFO, Microsemi, added that terms of agreement have been unanimously approved by the boards of Microsemi and Actel.
The total transaction value is said to be approximately $430 million, net of Actel’s projected cash balance at closing. The transaction is subject to customary closing conditions, including the tender of a majority of the outstanding shares of Actel’s common stock and regulatory approvals, and is expected to close in Microsemi’s fiscal first quarter, ending January 2, 2011.
Microsemi expects significant synergies from this immediately accretive transaction. Based on current assumptions, It expects the acquisition to be $0.22 to $0.28 accretive in its first full calendar year ending December 2011.
For those who aren’t aware of SmartFusion, at this year’s Embedded World conference, Actel unveiled SmartFusion, the world’s first intelligent mixed signal FPGA. Actel’s SmartFusion devices feature proven FPGA fabric, a complete MCU subsystem built around a hard ARM Cortex-M3 processor and programmable analog blocks on a flash process. Embedded designers can now easily build the system they want, with all the features they need, on a single chip.
Even Vin Ratford, senior vice president, worldwide marketing and business development, Xilinx, had agreed that introducing analog/mixed signal capabilities in FPGAs is a good idea.
SmartFusion is bound to generate lot of excitement. It’s game on! I am awaiting an intelligent mixed signal FPGA from either Altera or Xilinx, or both. Congratulations are due to Actel and Microsemi.
Friday, October 1, 2010
What’s the way forward for Indian semicon/ESDM industry?
Recently, a panel discussion was held on the “Semiconductor evolution in India – Past, Present and Future,” at a conference in Bangalore.
Two eminent industry friends — Dr. Satya Gupta, co-founder and CEO, Concept2Silicon Systems and Rahul Arya, director, marketing and technology sales, Cadence Design Systems, were among the panelists.
Both of them attempted to provide a way forward for the Indian semiconductor (and ESDM) industry. Here’s a snapshot of their take on the evolution of the Indian semiconductor industry — from the past to the present, and the way ahead!
System level product definition required
Regarding the growth of semiconductors in India, Dr. Satya Gupta of Concept2Silicon, said that the past focused on design services and resource augmentation. The present day scenario is more toward design implementation and ownership, and some amount of product definition.
He advised that the future should be toward system level product definition, product marketing, and system design and manufacturing.
Dr Gupta raised some other points. One, critical decision making is required for product definition by small number of highly experienced domain and market experts. Two, several government schemes exist for financial support for SMEs and start-ups for technology development and innovation in the semiconductor and electronics system design and manufacturing (ESDM) spaces.
The India Semiconductor Association (ISA) is said to be working with government and other industry bodies to foster growth of ESDM market and products made in India, he added.
Dr. Gupta highlighted the importance of the availability of quality components in a timely fashion and at competitive pricing, which would be required to help ESDM companies. Further, effective use of the infrastructure available is also needed to create talent with the necessary experience in VLSI and system design.
Innovation brewing in tech, business
Presenting his snapshot on the evolution of the Indian semiconductor industry, Rahul Arya of Cadence Design Systems, said that in the past, India had moved from being an optimizer, to an enabler, on to being a co-inventor over the last 25 years. India started with cost arbitrage and experimentation. Liberalization in the 1990s and globalization helped.
When companies worldwide were trying to meet the productivity and time-to-market window, Indian design centers and services companies enabled growth. TI and Cadence were the early entrants in India. Over a period of time, the various India design centers built their credibility through relentless execution and developed expertise.
Now, India is on a growth trajectory. The local telecom market has arrived and what happens in this segment will be defining in some ways, the way forward. Arya said innovations are now brewing in technology and business models. Companies are now vying for share in local and global markets.
The way forward
So, what is the way forward? According to Arya, the mindset should change from fabless chip design to product design. Infotainment, telecom, defense and space will be the growth drivers.
The brain drain – or the reverse brain drain, which he calls, the ‘brain gain’, will speed up as companies will hire global experts with domain expertise and business outlook. India has moved from brain drain to reverse brain drain and going forward, it will be ‘brain gain’ wherein companies will hire global experts with domain expertise and business outlook. India can also look forward to an era of collaborations, acquisitions and manufacturing. There will be products conceptualized in India for the ‘glocal’ market.
Home truths
That’s quite an exhaustive wish list! Definitely, ‘brain gain’ is ongoing, as are initiatives to conceptualize products in India for the ‘glocal’ market.
ESDM has been doing the rounds in the sense that there has been a lot of talk about ESDM over the past eight to nine months or so in India. As far as we have been hearing, ESDM seems quite some way off from being a reality today!
The absence of an ecosystem for electronic components in India does not help matters much. How does one expect the Indian semiconductor or ESDM ecosystem to develop in the absence of an ecosystem for electronic components?
One could question here whether the Indian semicon policy or SIPS itself has succeeded. Perhaps, it has not, so far! However, there have been robust advances made in solar photovoltaics (PV), and now, LED lighting activities look to be gaining some momentum. And, these are NOT semicon exactly. Growth of ‘real’ semicon and ESDM are still some way off!
Am certain that the concerned stakeholders are taking further corrective measures regarding India’s semiconductor policy in order to provide the necessary momentum required for the growth of semicon and ESDM activities in India.
And please, do something about electronic components!
Two eminent industry friends — Dr. Satya Gupta, co-founder and CEO, Concept2Silicon Systems and Rahul Arya, director, marketing and technology sales, Cadence Design Systems, were among the panelists.
Both of them attempted to provide a way forward for the Indian semiconductor (and ESDM) industry. Here’s a snapshot of their take on the evolution of the Indian semiconductor industry — from the past to the present, and the way ahead!
System level product definition required
Regarding the growth of semiconductors in India, Dr. Satya Gupta of Concept2Silicon, said that the past focused on design services and resource augmentation. The present day scenario is more toward design implementation and ownership, and some amount of product definition.He advised that the future should be toward system level product definition, product marketing, and system design and manufacturing.
Dr Gupta raised some other points. One, critical decision making is required for product definition by small number of highly experienced domain and market experts. Two, several government schemes exist for financial support for SMEs and start-ups for technology development and innovation in the semiconductor and electronics system design and manufacturing (ESDM) spaces.
The India Semiconductor Association (ISA) is said to be working with government and other industry bodies to foster growth of ESDM market and products made in India, he added.
Dr. Gupta highlighted the importance of the availability of quality components in a timely fashion and at competitive pricing, which would be required to help ESDM companies. Further, effective use of the infrastructure available is also needed to create talent with the necessary experience in VLSI and system design.
Innovation brewing in tech, business
Presenting his snapshot on the evolution of the Indian semiconductor industry, Rahul Arya of Cadence Design Systems, said that in the past, India had moved from being an optimizer, to an enabler, on to being a co-inventor over the last 25 years. India started with cost arbitrage and experimentation. Liberalization in the 1990s and globalization helped.When companies worldwide were trying to meet the productivity and time-to-market window, Indian design centers and services companies enabled growth. TI and Cadence were the early entrants in India. Over a period of time, the various India design centers built their credibility through relentless execution and developed expertise.
Now, India is on a growth trajectory. The local telecom market has arrived and what happens in this segment will be defining in some ways, the way forward. Arya said innovations are now brewing in technology and business models. Companies are now vying for share in local and global markets.
The way forward
So, what is the way forward? According to Arya, the mindset should change from fabless chip design to product design. Infotainment, telecom, defense and space will be the growth drivers.
The brain drain – or the reverse brain drain, which he calls, the ‘brain gain’, will speed up as companies will hire global experts with domain expertise and business outlook. India has moved from brain drain to reverse brain drain and going forward, it will be ‘brain gain’ wherein companies will hire global experts with domain expertise and business outlook. India can also look forward to an era of collaborations, acquisitions and manufacturing. There will be products conceptualized in India for the ‘glocal’ market.
Home truths
That’s quite an exhaustive wish list! Definitely, ‘brain gain’ is ongoing, as are initiatives to conceptualize products in India for the ‘glocal’ market.
ESDM has been doing the rounds in the sense that there has been a lot of talk about ESDM over the past eight to nine months or so in India. As far as we have been hearing, ESDM seems quite some way off from being a reality today!
The absence of an ecosystem for electronic components in India does not help matters much. How does one expect the Indian semiconductor or ESDM ecosystem to develop in the absence of an ecosystem for electronic components?
One could question here whether the Indian semicon policy or SIPS itself has succeeded. Perhaps, it has not, so far! However, there have been robust advances made in solar photovoltaics (PV), and now, LED lighting activities look to be gaining some momentum. And, these are NOT semicon exactly. Growth of ‘real’ semicon and ESDM are still some way off!
Am certain that the concerned stakeholders are taking further corrective measures regarding India’s semiconductor policy in order to provide the necessary momentum required for the growth of semicon and ESDM activities in India.
And please, do something about electronic components!
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