Executives debate future of chip manufacturing

Executive panel discussions at this year’s SEMICON West addressed a number of key issues in the chip manufacturing industry, from globalization to design-for-manufacture (DFM), next-generation materials and processes, and China.

SAN FRANCISCO, CA - Executive panel discussions at this year’s SEMICON West addressed a number of key issues in the chip manufacturing industry, from globalization to design-for-manufacture (DFM), next-generation materials and processes, and China.

Among the questions addressed in several debates is whether the center of the industry will inevitably shift away from North America toward Asia, reflecting the growing size and importance of the Asia-Pacific market. George Scalise, president of the Semiconductor Industry Association (SIA), said there is no question that a major migration of chip manufacturing activities toward Asia is under way.

“More than two-thirds of all the state-of-the-art chip making facilities now under construction are being built in Asia,” said Scalise. “This trend reflects both the rapid growth of electronics manufacturing in Asia and the effectiveness of tax incentives and other assistance programs offered to attract high-tech investment in the region.”

Similarly, Sven Lofquist, president and CEO of Sweden-based Micronic Laser Systems (Taby, Sweden)-which just opened its new Asia Technical and Applications Center in Tokyo, the company’s first tech center outside of Sweden-noted that with much of the semiconductor business moving to Asia, there’s no question suppliers will follow.

“Although the opportunities China holds for this industry are great, the supplier community must not lose sight of other important regions: Taiwan, Korea and Japan,” he said. “Moreover, it’s not only a question of cost. Suppliers still must be able to deliver the technology.”

Other speakers during the conference said Asia will never completely dominate the semiconductor industry. For example, Tien Wu, president, Americas and Europe, ASE noted in his keynote address that in order to dominate any segment of the semiconductor business, a country has to control three core values: IP, manufacturing, and consumption. When it comes to low-end PCs, all of these are controlled by Asia. But in most other market segments, some part of IP always needs to stay “close to home”-which means Europe, Japan, and the United States will always control part of semiconductor manufacturing, according to Wu.

“If you are considering going to China, it is not a value proposition-it is a matter of how a company views itself,” he said. “If you want to embrace high-volume business (of low-end PCs), go-but find a partner who understands the infrastructure issues. If you want to be in the defense, biomedical, or smart appliances business, stay in the United States.”
- Kathy Kincade

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