The Outlook for the Semiconductor Industry

Does the word “commodity” come to mind; how about the word “innovation?” OK, now try “risk.” The question of the outlook for semiconductor production worldwide is a mixture of the feelings and fears, thoughts and challenges associated with the relationship between those three words, Commodity, Innovation and Risk…

Now look at the Global Semiconductor Industry and the rise and subsequent consolidation of the Foundries that now dominate the latest mass production semiconductor technologies. There are three possibly four left standing, TSMC, Global Foundries, Samsung and perhaps Intel will enter the battle. The risks of technological advance in the manufacture, as opposed to design, of semiconductors are being born by the foundries. Their hard earned and costly manufacturing skills will be generally available to all who pay the price and have the manufacturing volumes that justify the costly tooling and sustaining engineering.

What of those, who for good reasons of their own, will not or cannot utilize the giant foundries. Such companies will use their own creativity and drive to gain a market advantage owing to their expertise in both designing and building their chips. Such companies will need to find ways to lower their manufacturing costs by effectively lowering the cost of ownership of the tools of production.