A invited talk in NCKU University Graduated School compound semiconductor class in 2009. The time right upon finalcial storm.

1. To NCKU Compound Semiconductor Class
A 2008 Year End Update on Current
Semiconductor Industry Eco-System
James Chu
2009.01.05

2. Outlines
Heads-Up! Open Your Business Eyes
The Driver for CMOS Technology Evolution
The Semiconductor Industry Eco-system
Episode 1: CMOS scaling: Challenge & Opportunity
Episode 2: SEMI Market & Economic Status Diagest
Episode 3: What Options Besides CMOS ?
Briefing: New Business Start Up Process
Summary

3. Heads-Up! Open Your Business Eyes

4. Opportunity Recognition Part 1
General
Deregulation (cell phone) or Regulation (health care)
Unequal Development Pace (80’s hw/sw)
Many fragmented industries
Service Shift (fi, 30% to 80% in 25 years)
Off-shore Manufacturing
Early in Product Lifecycle
Missing Niches

5. Opportunity Recognition Part 2
High Potential Ventures Criteria
Industry Issues
Structure (Sellers fragmented)
Market Size (Large ,but not too big, and Growing)
Growth Rate (Accelerating)
Market Capacity (Demand not filled)
Market Share Attainable
Reducing Cost Conditions are BAD
Economic Issues
Profits after tax (High)
Time to Breakeven (Less then 2 years)
Return of Investment (ROI) is 25% and up
Capital Requirements (Low)
Gross Margins (High)

6. Opportunity Recognition Part 3
High Potential Ventures Criteria
Harvest Issues
Value-Added Potential
Exit Mechanisms Nurtured by Founders
Capital Market Context - Timing
Competitive Advantage Issues
Degree of Control over Prices
Entry Barriers
Team

7. IC Chips System Requirement : the Driver

11. Episode 1: CMOS scaling: Challenge & Opportunity

12. Consumer Stationary Performance Trends

13. Consumer Stationary Design Complexity Trends

14. Consumer Stationary Power Consumption Trends

15. Consumer Portable Process Performance Trend

16. Consumer Portable Design Complexity Trend

17. Consumer Portable Power Consumption Trend

18. Recent ADC Performance Needs for Important
Product Classes

19. Preliminary Summary
Design complexity (from desired function diversity) and Power
Consumption are two key trends for the design of SOC
Consumer chips.
Stationary Device:
Processing performance is the most important differentiator.
Multiple Data Processing Engines (DPEs) to enhance the performance
Software enabled functional flexibility.
Longer lifecycle and broader application area.
Portable Device:
Desire High Performance-to-Power ratio.
The trend indicate the power consumption substantially exceeds the
performance requirements.
Shorter product life cycle due to dedicated functions.

20. A Example : Intel CPU evolution on
- Ion increase increase performance
- Ioff reduction reduce leakage

21. From Intel IDF 2008

22. From Intel IDF 2008

23. From Intel IDF 2008

24. CMOS Scaling : Challenge and
Opportunity

26. CMOS built on Silicon Material Engineering
Curtsey of ©Robert Simonton

27. From Intel IDF 2008

28. Scaling Drive the Transistor Engineering Complexity

29. Scaling Drives the Need for New Materials
© 2008 Muhammad Hussain/Twan Bearda
SPCC Tutorial Short Course 2008

30. From Intel IDF 2008

31. ITRS (International Technology Roadmap of Semiconductor)
2008 Year End Update

32. From Intel IDF 2008

33. From Intel IDF 2008

34. From Intel IDF 2008

35. From Intel IDF 2008

36. From Intel IDF 2008

37. From Intel IDF 2008

38. From Intel IDF 2008

39. From Intel IDF 2008

40. TSMC Technology roadmap

41. From Intel IDF 2008

42. Preliminary Summary
CMOS Scaling bring in lots of new materials into
manufacturing process.
The recent CMOS scaling barriers overcomed by
Strain Silicon and HKMG.
CMOS Scaling will continue to 22nm (2012 available) ,
III-V material play more role in the scaling.
CMOS Scaling likely to end in 22nm and followed by
nano wire devices, optical connect , carbon nanotube.

43. Episode 2: Digest of Economic Status &
Forecast

44. From Intel IDF 2008

45. Electronic Industry Independence

52. It is interesting to note that every time there was a two-year double-digit decline in capital spending, the
following year showed a double-digit increase.
Moreover, in every instance in the past, in the second year after the two-year decline, a 59% or greater surge in
capital spending took place!
If the post 2008/2009 time period follows the historical pattern, 2010 will show a double-digit capital
spending increase, which correlates nicely to IC Insights’ current forecast for a 15% increase in spending in
2010.

53. From Strategic Marketing Associates

54. WW Capital Spending – by Company

58. The Forecast

64. WW Electronics Sales Growth will be Flat, if not Negative, from 2008 to 2009.

65. Inventories are on the Rise

66. VLSI’s CPPI Predicts Another Negative Year

72. Preliminary Summary
IC market revenue will be flat to minus in 2009,
despite the shipment continue to grow.
Optoelectronic revenue growth is outpacing the
crowd.
IC Capital Equipment Business will highly impacted
in 2009. But likely to rebound in 2010.
FPD Capital Equipment Business has worst outlook.

73. Episode 3: What besides CMOS ?

75. Optoelectronics, Sensor, and Discrete Report (O-S-D Report).

85. Regional Market Shares of O-S-D Products

87. Reminding : the Business Eyes

88. Start-Up Capital Formation Process
1. Idea
2. Kitchen Table
3. Founder’s Commitment
4. Pullout from Employer
5. Business Plan Creation
6. Filling Management Team
7. Raising Seed Capital
8. Closing Capital & Incorporation
9. Finding a Home
10. Start-Up
11. Secondary Capital Rounds
12. Launch First Product
13. Raise Working Capital
14. Initial Public Offer

89. Participants in Capital Formation Process
1. Person with Idea (Founder)
2. Key Followers (Buddies, Founders)
3. Business Consultant
4. Lawyers (General, Patent)
5. Corporate Accounting Firm (Acct, Taxes)
6. Venture Capital
7. Board
8. Equipment Leasing Company
9. Commercial Banker
10. Real Estate (Broker, Landlord)
11. Key Suppliers (Tel, Insurance, Furniture, Utility …)
12. Recruiters (Contingent, Retained)
13. Public Relation Firm
14. Media (Local, National, Industry)
15. Customers
16. Wall Street Analysts (Stock Exchange Company, Investment Bank)
17. General Public

90. Recommended Steps in Plan Stages
1. Idea
2. Research
3. Decide Channel
4. Marketing Plan
5. Strategy
6. Build Rapport with
Suppliers
7. Business Plan
8. Iron out Operation Idea
9. Sell or Funding

91. The Lessons

92. Summary: 10 Lessons for High Tech
Entrepreneurs
1. Pick right industry
2. Identify valuable opportunities
3. Fit strategy to industry
4. Target technological transitions
5. Focus on an underserved market niche
6. Identify customer needs
7. Project market growth
8. Cross the chasm
9. Prevent imitation
10. Manage risk and uncertainty

93. Technological Transitions
Performance
n
io
Disruptive
at
ov
innovation
n
in
t al
en
em
cr
In
Time

94. A Normal Distribution of Adopters…
Most customers
adopt new products
In the middle
of the adoption cycle
Number
Of
Adopters
In Time
Period
Few customers adopt Few customers adopt
new products at first new products at the
ed of the
adoption cycle
Early Adopters Early Majority Late Majority Laggards
Innovators
13.5% 34% 34% 16%
2.5%
Two standard deviations One standard deviation Mean adopter One standard deviation after the man
before the mean before the mean

95. Leads to S-Shaped Market Growth
Slowing of market growth
80
60
Percent Acceleration of market
Adopting growth
40
Low rate of
market growth
20
0 5 10 15 20 25 30 35
Time

96. Who Succeeds at Innovation?
Performance
Start-ups
s
m
fir
d
ishe
bl
ta
Es
Time

97. Lesson #8: Cross the Chasm
Entrepreneurs often find the
majority of adopters to be a
large enough market, but have
a hard time transitioning to
serving them
Th
eC
Number of ha
sm
Adopters in
Time Period
Entrepreneurs often find it
easy to sell to innovators and
early adopters, but can’t sell
enough to make the business
worthwhile
Early
Innovators Adopters Early Majority Late Majority Laggards
Time

98. Summary
CMOS Scaling has create new material / process
technology challenge, so as business opportunity,
the continue growth is inevitable.
Besides CMOS, the Optoelectronic / MEMs / Discrete
devices enter into rapid growth phase.
2009 will be a low year and consensus of economic
rebound likely in 2010.