Letter to the Editor
Staff -- Semiconductor International, 9/1/2003
At times I wish I had more business and history training to provide me the depth of knowledge to understand our current situation, but that of course doesn't stop me from having an opinion (see "Don't Fix the Guillotine ," Semiconductor International, June 2003).
We are in a relatively young industry, rapidly growing and maturing to the (irreconcilable?) tunes of the market and Moore's Law. All this, overlaid with an up-and-down global economy combined with a truly global manufacturing marketplace makes for a messy system to model. It's nice to imagine IC manufacturers and semiconductor equipment manufacturers increasing prices to rational (sustainable) levels, but typical market forces weigh against this happening. More likely, we will continue to witness a reduction in the number of IC and equipment manufacturers via merger, acquisition and bankruptcy until the venerable supply/demand model is satisfied. And it's gonna hurt, a lot of us.
A difficult part of the system to understand and accept is that the "marketplace" is truly global, with all the ramifications that implies. The playing field is not level, nor will it be in the foreseeable future. Differences in equity markets, governments, political environments, and cultures throughout the world mean that capital availability, ROI and profitability requirements are not uniform and drive business decisions counter to what many of us would like to see. Once again, many of us will be hurt in the short term as market forces drive toward the longer term.
IC manufacturing is not particularly different from other manufacturing industries; we would do well to recognize this rather than continue to blow the trumpet of high technology. We're in the same cycle that textiles, automobiles and many others are, just in an earlier phase. We are unique in many ways, but this has not exempted us from market imperatives and "the way of the world." My only thought for the future is that, individually and as an industry, we review our slavish adherence to Moore's Law and consider whether the market (the ultimate purveyors of our paychecks) wants what we can produce. Clearly, we can do it (stay on the roadmap), but should we?
Kevin
McLaughlin
Strategic Account Manager
SCP Global Technologies
