2009 Ncku Talks Semi Industry Business Update

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A invited talk in NCKU University Graduated School compound semiconductor class in 2009. The time right upon finalcial storm.

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2009 Ncku Talks Semi Industry Business Update

  1. 1. To NCKU Compound Semiconductor Class A 2008 Year End Update on Current Semiconductor Industry Eco-System James Chu 2009.01.05
  2. 2. Outlines Heads-Up! Open Your Business Eyes The Driver for CMOS Technology Evolution The Semiconductor Industry Eco-system Episode 1: CMOS scaling: Challenge & Opportunity Episode 2: SEMI Market & Economic Status Diagest Episode 3: What Options Besides CMOS ? Briefing: New Business Start Up Process Summary
  3. 3. Heads-Up! Open Your Business Eyes
  4. 4. Opportunity Recognition Part 1 General Deregulation (cell phone) or Regulation (health care) Unequal Development Pace (80’s hw/sw) Many fragmented industries Service Shift (fi, 30% to 80% in 25 years) Off-shore Manufacturing Early in Product Lifecycle Missing Niches
  5. 5. Opportunity Recognition Part 2 High Potential Ventures Criteria Industry Issues Structure (Sellers fragmented) Market Size (Large ,but not too big, and Growing) Growth Rate (Accelerating) Market Capacity (Demand not filled) Market Share Attainable Reducing Cost Conditions are BAD Economic Issues Profits after tax (High) Time to Breakeven (Less then 2 years) Return of Investment (ROI) is 25% and up Capital Requirements (Low) Gross Margins (High)
  6. 6. Opportunity Recognition Part 3 High Potential Ventures Criteria Harvest Issues Value-Added Potential Exit Mechanisms Nurtured by Founders Capital Market Context - Timing Competitive Advantage Issues Degree of Control over Prices Entry Barriers Team
  7. 7. IC Chips System Requirement : the Driver
  8. 8. Episode 1: CMOS scaling: Challenge & Opportunity
  9. 9. Consumer Stationary Performance Trends
  10. 10. Consumer Stationary Design Complexity Trends
  11. 11. Consumer Stationary Power Consumption Trends
  12. 12. Consumer Portable Process Performance Trend
  13. 13. Consumer Portable Design Complexity Trend
  14. 14. Consumer Portable Power Consumption Trend
  15. 15. Recent ADC Performance Needs for Important Product Classes
  16. 16. Preliminary Summary Design complexity (from desired function diversity) and Power Consumption are two key trends for the design of SOC Consumer chips. Stationary Device: Processing performance is the most important differentiator. Multiple Data Processing Engines (DPEs) to enhance the performance Software enabled functional flexibility. Longer lifecycle and broader application area. Portable Device: Desire High Performance-to-Power ratio. The trend indicate the power consumption substantially exceeds the performance requirements. Shorter product life cycle due to dedicated functions.
  17. 17. A Example : Intel CPU evolution on - Ion increase increase performance - Ioff reduction reduce leakage
  18. 18. From Intel IDF 2008
  19. 19. From Intel IDF 2008
  20. 20. From Intel IDF 2008
  21. 21. CMOS Scaling : Challenge and Opportunity
  22. 22. CMOS built on Silicon Material Engineering Curtsey of ©Robert Simonton
  23. 23. From Intel IDF 2008
  24. 24. Scaling Drive the Transistor Engineering Complexity
  25. 25. Scaling Drives the Need for New Materials © 2008 Muhammad Hussain/Twan Bearda SPCC Tutorial Short Course 2008
  26. 26. From Intel IDF 2008
  27. 27. ITRS (International Technology Roadmap of Semiconductor) 2008 Year End Update
  28. 28. From Intel IDF 2008
  29. 29. From Intel IDF 2008
  30. 30. From Intel IDF 2008
  31. 31. From Intel IDF 2008
  32. 32. From Intel IDF 2008
  33. 33. From Intel IDF 2008
  34. 34. From Intel IDF 2008
  35. 35. From Intel IDF 2008
  36. 36. TSMC Technology roadmap
  37. 37. From Intel IDF 2008
  38. 38. Preliminary Summary CMOS Scaling bring in lots of new materials into manufacturing process. The recent CMOS scaling barriers overcomed by Strain Silicon and HKMG. CMOS Scaling will continue to 22nm (2012 available) , III-V material play more role in the scaling. CMOS Scaling likely to end in 22nm and followed by nano wire devices, optical connect , carbon nanotube.
  39. 39. Episode 2: Digest of Economic Status & Forecast
  40. 40. From Intel IDF 2008
  41. 41. Electronic Industry Independence
  42. 42. It is interesting to note that every time there was a two-year double-digit decline in capital spending, the following year showed a double-digit increase. Moreover, in every instance in the past, in the second year after the two-year decline, a 59% or greater surge in capital spending took place! If the post 2008/2009 time period follows the historical pattern, 2010 will show a double-digit capital spending increase, which correlates nicely to IC Insights’ current forecast for a 15% increase in spending in 2010.
  43. 43. From Strategic Marketing Associates
  44. 44. WW Capital Spending – by Company
  45. 45. The Forecast
  46. 46. WW Electronics Sales Growth will be Flat, if not Negative, from 2008 to 2009.
  47. 47. Inventories are on the Rise
  48. 48. VLSI’s CPPI Predicts Another Negative Year
  49. 49. Preliminary Summary IC market revenue will be flat to minus in 2009, despite the shipment continue to grow. Optoelectronic revenue growth is outpacing the crowd. IC Capital Equipment Business will highly impacted in 2009. But likely to rebound in 2010. FPD Capital Equipment Business has worst outlook.
  50. 50. Episode 3: What besides CMOS ?
  51. 51. Optoelectronics, Sensor, and Discrete Report (O-S-D Report).
  52. 52. Regional Market Shares of O-S-D Products
  53. 53. Reminding : the Business Eyes
  54. 54. Start-Up Capital Formation Process 1. Idea 2. Kitchen Table 3. Founder’s Commitment 4. Pullout from Employer 5. Business Plan Creation 6. Filling Management Team 7. Raising Seed Capital 8. Closing Capital & Incorporation 9. Finding a Home 10. Start-Up 11. Secondary Capital Rounds 12. Launch First Product 13. Raise Working Capital 14. Initial Public Offer
  55. 55. Participants in Capital Formation Process 1. Person with Idea (Founder) 2. Key Followers (Buddies, Founders) 3. Business Consultant 4. Lawyers (General, Patent) 5. Corporate Accounting Firm (Acct, Taxes) 6. Venture Capital 7. Board 8. Equipment Leasing Company 9. Commercial Banker 10. Real Estate (Broker, Landlord) 11. Key Suppliers (Tel, Insurance, Furniture, Utility …) 12. Recruiters (Contingent, Retained) 13. Public Relation Firm 14. Media (Local, National, Industry) 15. Customers 16. Wall Street Analysts (Stock Exchange Company, Investment Bank) 17. General Public
  56. 56. Recommended Steps in Plan Stages 1. Idea 2. Research 3. Decide Channel 4. Marketing Plan 5. Strategy 6. Build Rapport with Suppliers 7. Business Plan 8. Iron out Operation Idea 9. Sell or Funding
  57. 57. The Lessons
  58. 58. Summary: 10 Lessons for High Tech Entrepreneurs 1. Pick right industry 2. Identify valuable opportunities 3. Fit strategy to industry 4. Target technological transitions 5. Focus on an underserved market niche 6. Identify customer needs 7. Project market growth 8. Cross the chasm 9. Prevent imitation 10. Manage risk and uncertainty
  59. 59. Technological Transitions Performance n io Disruptive at ov innovation n in t al en em cr In Time
  60. 60. A Normal Distribution of Adopters… Most customers adopt new products In the middle of the adoption cycle Number Of Adopters In Time Period Few customers adopt Few customers adopt new products at first new products at the ed of the adoption cycle Early Adopters Early Majority Late Majority Laggards Innovators 13.5% 34% 34% 16% 2.5% Two standard deviations One standard deviation Mean adopter One standard deviation after the man before the mean before the mean
  61. 61. Leads to S-Shaped Market Growth Slowing of market growth 80 60 Percent Acceleration of market Adopting growth 40 Low rate of market growth 20 0 5 10 15 20 25 30 35 Time
  62. 62. Who Succeeds at Innovation? Performance Start-ups s m fir d ishe bl ta Es Time
  63. 63. Lesson #8: Cross the Chasm Entrepreneurs often find the majority of adopters to be a large enough market, but have a hard time transitioning to serving them Th eC Number of ha sm Adopters in Time Period Entrepreneurs often find it easy to sell to innovators and early adopters, but can’t sell enough to make the business worthwhile Early Innovators Adopters Early Majority Late Majority Laggards Time
  64. 64. Summary CMOS Scaling has create new material / process technology challenge, so as business opportunity, the continue growth is inevitable. Besides CMOS, the Optoelectronic / MEMs / Discrete devices enter into rapid growth phase. 2009 will be a low year and consensus of economic rebound likely in 2010.

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