Electronics Weekly Electronics Design & Components Tech News
Warren Savage, CEO of IPExtreme, reckons 2010 taught the silicon industry five major lessons and it has emerged into a New Era.
1. Globalization found its limit.
“Companies found there was a natural limit as to how fast and how complete that transition could be. It’s not that easy to transplant 50 years of microelectronics know-how so quickly. The conveyor belt of jobs to Asia slowed way down,” says Savage.
2. The race to be cheapest ended at the bottom of a cliff.
“Turns out that semiconductors, and especially semiconductor design is not a commodity that can be driven by the market price of sand,” says Savage, “companies that played into that mindset found themselves with undifferentiated products and no cash to invest in next generation technologies.
3. Consumers became discriminating.
“Consumers are increasingly conscious of quality and value.”
4. Viva la differentiation!
“The big change I see in semiconductors is an explicit strategy shift towards differentiation through customization,” says Savage, “cheaper and undifferentiated is a provably failed strategy – not only is there no money in it, but it’s not want consumers. Semiconductor companies are finding that they need to focus on the niches where their unique specialization adds value that cheaper competitors cannot easily reach.” Examples: Apple with PA Semi and increasing use of proprietary IP in ASICs.
5. The New Era
“We are in a new era where systems level considerations together with understanding of consumer behaviours are important to the semiconductor industry,” concludes Savage, “the good news for those of us working in it is that we did not wind up in a world where the outputs of great scientific minds are rendered into a commodity when reduced to silicon.”
The race to be cheapest is not over yet. The race to pay off personal debt excuses a lot of us from playing this game for some time.
I would like to believe — no, I would LOVE to believe that Mr. Savage is correct. The last few years have made me more pessimistic than I once was and I fear that Rupert is closer to the truth.
Ah, wishful thinking – otherwise characterised as Steve Jobs Will Save Us All.
1. If that were so, you wouldn’t find every CTO eyeball in semiconductors glued quite so nervously to China. It’s behind by two to three generations, but the rate of change is picking up.
2. I give you the £80 Android phone. What will you do in hardware that will compensate for all the user-detectable cleverness being in software? Moore says that in the race downhill, there’s always more room at the bottom.
3. From where I sit, consumers – and B2B – are biting their nails about money first and foremost.
4. How much of that A4 processor comes from 1 Infinite Loop, and how much from 250, 2-ga Taepyung-ro Chung-gu?
5. Systems level thinking means handling complexity with sanity, and that particular prize is still open to all. Apple can do it, but there’s not much evidence that this scales outside its niches; Sony can do it, but is still the idiot savant in marketing. Samsung, ARM, Intel and the others are utterly dependant on doing what they do but more so. Show me how their ‘understanding of consumer behaviours’ goes beyond spotting what’s driving the market now and assuming it’ll carry on that way ad infinitum.
Not convinced.