That’s bad news for the industry, he indicated. “Intel has paid for all the innovation in process equipment since the 80s,” Hogan said. ‘So if Intel stops doing new fabs, where is the innovation going to come from? The Chinese are a generation out. The Koreans are going to get killed with the DRAM thing, so it won’t be Samsung. I don’t have the answer.”
IoT sucks/IoT will save us
So if memories all move to China and process innovation is too expensive, what path can the U.S. semiconductor industry take? There’s lots of hype about the Internet of Things right now, and maybe there’s some hope for the industry there. Maybe.
“No IoT companies have been very successful to date,” said Helen Li, managing partner, Needham & Company. “It’s a very fragmented market, there isn’t enough volume, but that could change. More applications are coming out of IoT, particularly industrial ones. That’s one of the sectors in which people forecast highest growth in next 5 years.”
“I hate IoT,” said Hirsch. “I think IoT sucks. You have these stupid tiny chips, that cost a buck or so, going into a smart building [and they] can last 30 years. One of the things [that drives] the semiconductor industry is turnover. Why do I want to sell a chip that lasts 30 years and costs practically nothing? What I want is to sell a disposable chip that goes in the garbage almost as soon as I sell it. We want to make chips that have value along with a turnover rate that lets us keep pushing out silicon.”
Hirsch says the answer might be in making devices that aren’t generally thought of as traditional semiconductor industry products, like MEMS, microfluidic chips, and novel displays. Hogan is betting on products that move intelligence to the edge, particularly on chips that process both analog and digital signals. What’s clear in any case, he said, is that “we are going to have to design-innovate our way out of this, using the processes that we have. It is going to be tough to process-innovate our way out of this.”
Young people wanted
In any discussion about the future, concern about the future workforce typically comes up. The panelists expressed concern about the drop-off in women entering computer science programs, and the challenge to get students interested in STEM in general. The semiconductor industry has an even tougher workforce challenge than the more software-oriented companies, they pointed out; those companies are struggling to offer jobs that seem as interesting, and to present financial incentives sweet enough to let them compete for talent.
“Maybe the semiconductor industry has to change to be as attractive as software industry,” Li said. “My son, who is 13, recently had a tour of Google. He was very impressed, he now thinks Google is the best company in the world. Semiconductor companies don’t give the same notion.”
Said Hogan: “We were never that cool.”