All posts by Gary Hillman

Owner and President of S-Cubed

On Data…Innovation…and Nature

In our first post, we made the following point about companies that are not the huge 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.” Another way to make this argument is that those companies must innovate.

But wait. Everyone knows that we all need to be data driven. We need to have the data that successfully makes the argument that the innovation is working successfully. It is sort of a “chicken and egg” dilemma. If we had the data, then it’s been done and if we don’t have the data we can’t proceed. Ultimately, we have to start someplace. The question is always “where?”

First, we need to start with a better understanding of nature. When all else fails, we as professionals should be thinking through what nature wants to happen. The study of chemistry and the laws of thermodynamics in the discipline of physical chemistry can, and should, instruct us and provide the bridge that we build to cross from no data to innovation; and from innovation, to new data that can provide that lower cost of ownership so vital to the companies that must be creative. Ultimately, it is that creativity that helps to foster success.

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.