The semiconductor industry has reached a crucial turning point, and key players are reassessing the way they do business. Jim Clifford, senior vice president and general manager of Qualcomm CDMA Technologies (San Diego), discussed the need for the industry to adapt and how best to meet the needs of a changing market during a keynote address at the SEMICON West 2008 SEMI/Gartner Market Symposium yesterday.
Craig Addison, Senior Editor, Communications, SEMI, San Jose — Semiconductor International, 7/15/2008 10:00:00 AM
The semiconductor industry has reached a crucial turning point, and key players are reassessing the way they do business. Jim Clifford, senior vice president and general manager of Qualcomm CDMA Technologies (San Diego), discussed the need for the industry to adapt and how best to meet the needs of a changing market during a keynote address at the SEMICON West 2008 SEMI/Gartner Market Symposium yesterday
Jim Clifford, Senior Vice President and General Manager, Qualcomm CDMA Technologies
Jim Clifford, Senior Vice President and General Manager, Qualcomm CDMA Technologies

Clifford pointed out that technology drivers in the semiconductor industry have changed. In the past, “If you wanted to develop a new technology, DRAM was the way to shake out the bugs. What’s becoming even more important in driving technology is communications and consumer electronics,” he said.
One of the hottest end-product markets is mobile communications. The global handset market has reached about 1.2 billion units and is expected to grow to 1.6 billion by 2012, according to data cited by Clifford. Entry-level phones — those selling for ~$20 — will grow at the fastest rate, accounting for about half the handset total by 2012. “It is a huge market, and we need to service that market,” Clifford said.
At the higher end of the market are smart phones, which cost ~$300 and will account for about 400 million units by 2012. In the middle are the “enhanced phones” in the $100 price range.
The entry-level phone market is being driven by demand in China and India, and the market will continue to grow as those consumers move up the ladder to more feature rich phones, according to Clifford. He pointed out that there are currently about 800 million people in rural China who are not serviced by mobile phones, and each month 5-7 million phone subscribers are added in China.
India is a similar growth story. In that market, the price of handsets has come down from $99 to around $22, giving millions of new people access to information via the Internet. “They know what’s going on in the world. This is a societal transformation,” Clifford said.
Going forward, global growth prospects for handsets are still strong. By 2020, there will be 9 billion people on the planet, “so it’s a huge market for us,” he said.
Another industry trend identified by Clifford was the shift by IDMs to a “fab-lite” manufacturing strategy to reduce capital investments and lower manufacturing costs. In Qualcomm’s case, the company has adopted what it calls the “integrated fabless manufacturing” model. Clifford said this provides significant benefits for a wireless chip supplier. It allows design houses to focus on technology leadership in end-user markets with better use of design R&D; it leverages collaboration of supply-chain partners such as the designers, EDA companies, foundries, and packaging and test companies; and it enables all parties to focus on and invest in core strengths.

Clifford discussed the erosion of average selling prices (ASPs) in the industry, calling it “a big deal for us.” The challenge for companies like Qualcomm is to keep adding more features and more functionality to avoid ASPs eroding, according to Clifford.
On the technology front, Clifford discussed the push towards “More than Moore.” “We are doing a lot of development in 3-D packaging because we think its something we will need in the near future,” he said. A significant challenge will be to achieve lower power consumption at lower cost. Clifford noted that in new electronic products today, the low-power processes are typically introduced before the high-power performance versions are available, whereas in the past it was the other way around.
To deal with the technology challenges, Qualcomm has joined with IMEC in Europe to develop new packaging technology to drive the infrastructure required to enable More than Moore. Clifford said the solution to dealing with compressed cycle times is to collaborate closer with supply chain partners. “We are moving much closer to the foundries, much closer to the SATs,” he said.
Looking ahead, Clifford said he was excited about what he called the “holy grail” of semiconductor packaging; that is, being able to solve the issues in thinning wafers down to 25 µm and attaching them to one another in multiple stacks. This opens up the opportunity to approach customers about products that are not even envisioned today.
Prior to Clifford’s presentation, Dean Freeman, research vice president of Gartner Inc. (Stamford, Conn.), provided introductory remarks to open the symposium. He noted that 2008 will be the fourth worst downturn since 1982, which is when Gartner started collecting data on the semiconductor market. “Everyone is facing challenges…business models will have to be revised to deal with this going forward,” he said.

Freeman said all players will have to figure out how to do more with less. “The easy scaling has ended, so we have a lot of R&D to do to continue to stay on the Moore’s Law curve.”

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