Semiconductor industry must collaborate or die

The semiconductor industry is going to have to collaborate in the future to keep a rein on costs, according o leading lights in the industry.

Speaking at Semicon West 2009 industry heavyweights were in broad agreement that the industry would have to change its business model in the face of global recession and ever-advancing research and development (R&D) costs.

“The global economic crisis is fundamentally reshaping the semiconductor industry,” said George Scalise, president of the Semiconductor Industry Association (SIA).

“We’re approaching a tipping point where previous strategies won’t work. We must work together on R&D.”

He said that new and better technology was driving the costs of research and production up at a time when money was increasingly tight. Companies would have to collaborate on cost sharing to survive.

“Wave to move to Bell Labs model and have institutes for joint research,” said Mike Campbell, senior vice president of engineering for Qualcomm.

“You can’t have 300 tiny differences in semiconductor processes between manufacturers. If suppliers are going to survive you have to have a basis for a common point of technology.”

Other agreed by Mark Durcan, president of Micron, said that collaboration could only be taken so far.

“Collaborative research has a significant place but only in pre-competitive work,” he said.

“We’re all under same pressures and that is a part of the solution. But if we are going to live in a world with fewer memory developers than we have to get value for R&D by getting competitive advantage from it.”

He continued that in the last year capital expenditure on NAND and DRAM was down 60 per cent from its peak.

Government was cited by some as a possible saviour of the industry by pumping money into research but some were sceptical.

“Asking government to do this work is like getting my teenager to drive himself,” said Tien Wu, chief operating officer of Advanced Semiconductor Engineering (ASE).

“We need government to put money into research but government may not be the best candidate to do the research.”