Comment: Semiconductor Industry to hit $400bn in 2013

Charlie Cheng, president and CEO of Kilopass Technology, reveals why he believes 2013 could be the year the semiconductor industry breaks $400bn… 

Charlie Cheng president and CEO of Kilopass Technology commentThe semiconductor industry has some of the most visionary people who have succeeded by breaking conventional wisdom. Since 1987, the industry has delivered innovation, convenience and capability far exceeding any other innovation, and in doing so grown the business to nearly $300bn per year.

Despite several attempts and breakneck GDP growth globally of five percent per year for the past decade, the elusive $400bn per year is still that mythical forecast about five years out. So what can be done in 2013 to change that?

The transition of our focus from smarter smartphone to green infrastructure and automotive will perhaps fuel some new product expansion of current technology, but as a supplier of semiconductor intellectual property, I argue that the root of the growth to $400bn is not where to chase the next volume, but where to find the next breakthrough technology.

I see the industry desperately needing a laboratory for innovation. Very little has been written about the demise of SVTC Technologies, a small wafer fab dedicated to serving ambitious new technology developers such as Kilopass. SVTC provided semiconductor wafer fabrication for chip designs that required a non-standard process recipe that large foundries could not accommodate.

In 2009, when we started the development of our Vertical Crosspoint Memory technology to quadruple NVM IP storage density, we sought help from SVCT. Eventually, we were able to secure 110nm experimental wafers from a Korean wafer fab. But the entire journey took us until 2012 to successful validate, even though our “breakthrough” requires only one additional (non-critical) implant step. SVTC’s dated but serviceable 8-inch fab was able to help innovative teams requiring exotic materials and changes in process recipe.

The ones lucky enough to validate their invention would then commercialise the production in established high-volume foundries, whose scale isn’t suited for small volume experiments full of contamination risks. Without a laboratory like SVTC to incubate new inventions, the industry’s evolution will be restricted to those developments with manageable risks required for existing, proven high volume needs. None of this is good for the semiconductor industry’s ambition to achieve $400 billion dollars per year.

So I see a modest-sized 12-inch wafer fab, with quick turnaround time, mainstream in technology, and an experienced and flexible engineering team that can make a profit serving the development of next generation memory, MEMs, sensor, and packaging breakthroughs as the first giant step that we all need. In Europe, Japan, Taiwan, and US there are areas where some 180nm to 40nm 12-inch fabs – most likely fully depreciated – with yesteryear volume scale can still be found, and abundance of process technology expertise is still available.

The formation of such an R&D foundry service business will be critical for Kilopass’ future success, and those of other revolutionary companies wanting to introduce technologies that can define new market, new applications, and new volume to take the semiconductor industry quickly to $400 billion per year. I believe 2013 is the year; it has to be.