The future looks bright for the semiconductor industry and its ecosystem, but not unless chip companies can adapt to a changing industry and partner more closely with their equipment suppliers, according to Mark Adams, president of U.S. memory chip maker Micron Inc.
Delivering a keynote address on the opening day of the Semicon West tradeshow in San Francisco, Adams threw out several statistics to demonstrate the accelerating pace of technology change as consumers increasing embrace smartphones and mobile computing. (Among the statistics cited by Adams: 4 billion people in the world use mobile phones, but only 3.5 billion use toothbrushes).
But while the changing technology landscape offers plenty of opportunity for chipmakers, only those who recognize and embrace the way the business is changing will prosper, according to Adams.
“For those who can adapt, there are wonderful opportunities,” Adams told the crowd. “For those that think that [the semiconductor business] is going to be like it was in the past, I would suggest that it is going to be much more difficult for them going forward.”
Mark Adams, President, Micron
Source: SEMI
Amidst the staggering pace of technological change, semiconductor companies have a huge opportunity that can only be realized through closer partnerships between chip companies and suppliers, Adams told the crowd of mostly equipment and materials professionals. “We have to work more closely than we ever have,” Adams said.
“Semiconductor companies need equipment companies more than ever,” Adams added, citing the increasing complexity of process technology as chipmakers continue to scale to more advanced technology nodes. “The partnership and solving problems is fundamental to how successful we can be going forward.”
Ten years ago, Adams noted, the semiconductor industry largely served the PC market. But today, that landscape is fragmented, with chips targeting enterprise storage, networking, embedded, server, mobile, client storage and client computing applications, among others, he said.
Those chip firms who fully understand and adapt to this new reality will be best poised for the future, Adams said. “Those who understand and are partnering to best serve these markets I think will be the winners going forward,” Adams said.
Citing historical precedent, Adams showed a slide that listed more than 40 companies that were involved in the memory business in 2003. But by 2013, only four remained—Micron, Samsung, Toshiba and SK Hynix. These four companies, Adams said, remained in the memory game because they most clearly understood how the memory business was changing.
Adams also weighed in on the increasing consolidation that has defined the capital equipment industry in recent years. But rather than express concern over the shrinking number of suppliers, Adams applauded it, noting that the technical challenges facing the industry as it moves to more advanced technology nodes requires a great deal of R&D—something larger companies would be more suited to fund.
“I don't look at consolidation in the equipment industry as a bad thing,” Adams said. “In fact, I look at it as a good thing. The challenges we are trying to solve require scale and investment.”
Adams cited five factors that he said were critical to innovation: safety/risk reduction, time to market, quality, time to mature yield and cost.
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