HALF MOON BAY, Calif. — January, 2018 — The SEMI Industry Strategy Symposium (ISS) opened with the theme “Smart, Intuitive & Connected: Semiconductor Devices Transforming the World.” The annual three-day conference of C-level executives gives the year’s first comprehensive outlook of the global electronics manufacturing industry.
Yesterday highlighted market and technology opportunities and marked a record high tide for investments in 2017 for the semiconductor manufacturing supply chain. Day 1 awas noteworthy for its optimism with the more than 200 attendees clearly enjoying high levels of business. Deep discussions on applications and disruptions will be presented today in Day 2. Day 3 will convene an expert panel on “Nodes, Internodes and Real Nodes” to culminate SEMI’s business leader annual kick-off event.
Opening keynote speaker Kevin Bandy, SVP and Chief Digital Officer at Cisco Systems, focused on technology as the heart of business models and the ways digital disruption is reshaping markets and industries. Brandy noted forty percent of market incumbents are expected to be displaced in just three years and just 25 percent are responding to the threat. Bandy stressed that companies must act by reinventing their operating models.
Bandy gave several examples, one of which credited BMW for bringing together hardware, software, appliances and services to improve the driving experience. BMW understands it’s about a more enveloping experience of automotive travel and choices for consumers and has deployed technology throughout the customer experience.
In the Economic Trends session, presenters took on macroeconomic trends and detailed industry-specific forecasts:
Daniel Niles of Alpha Capital Partners highlighted the current unprecedented global economic growth but cautioned that, historically, dramatic expansions have been followed by sharp recessions. For only the third time in the past 50 years, all 45 countries tracked by OECD are growing. Fully 33 countries saw accelerating growth in 2017, the most since 2010. While Niles forecasts 2018 as a growth year, inventories are a concern.
Len Jelinek, IHS Marketing, forecast total semiconductor revenue growth of 7.4 percent in 2018, with memory growing by 14 percent and all other semiconductors by 4.5 percent. The growth will be fueled largely by consumer electronics, with 70 percent of chips ending up in consumers’ hands. Significant drivers include Internet of Things (IoT), a technology ubiquitous at last week’s CES conference, Jelinek said. He sees kitchen appliances sparking significant IoT growth, eventually enabling consumers to “voice-command your whole kitchen.”
Samuel Wang, Gartner forecast a 7.5 percent increase in semiconductor revenue for 2018, reaching $451 billion, with memory the largest contributor to the increase at expected growth of 30 percent. Application chips will be a driver, thanks to, not least, artificial intelligence and demand from bitcoin mining. For semiconductor manufacturers, he recommended adopting Artificial Intelligence (AI) and IoT in their own factories.
Matt Gertken, BCA Research, provided a geopolitical outlook for 2018. He noted potential geopolitical headwinds this year, with protectionism a heightened risk due to US trade policy. The high level of polarization in the US stoked in part by economic inequality could also be a destabilizing force. The global bull market, he noted, can persist for six to 12 months, though understated geopolitical risks could drive risk aversion in 2018.
The afternoon session focused on Market Perspectives, including AI, IoT, machine learning (ML), automotive, 5G and augmented reality (AR).
Wally Rhines, Mentor, shared technology lifecycle and trend predictions – with a unique analysis based on Gompertz mathematical modeling. The model shows a bright future for solid-state imaging and IoT wearable sensors, both early in lifecycles expected to extend past 2030. Strong revenue growth is expected for data centers at the heart of the IoT revolution with analytics, storage and networking.
David Pellerin, Amazon Web Services, described the critical role of AI and ML in many of the newest, most advanced analytics and IoT applications, including robotics, autonomous vehicles, smart factories and consumer-facing services in the financial and healthcare sectors. Amazon customers increasingly rely on AI/ML coupled with IoT hardware and software to innovate faster, and at cloud scales.
James Faucette, Morgan Stanley, discussed the challenges and opportunities of deploying 5G networks. Compared to 4G, costs, obstacles, and business case infancy will make 5G rollouts less uniform than previous network technologies, and take longer. Standardization of 5G will begin in earnest in 2019, though 5G faces three main hurdles – backhaul, siting (will require 100 times more base stations than currently deployed) and spectrum (signal range is unpredictable). Fixed wireless, he said, will be the first 5G use case.
Joe, O’Keefe, Oculus, offered a vision for AR glasses for a wide range of what will likely be ubiquitous applications in the future. Requiring contextually aware AI, full AR will be equivalent to having a personal assistant with a perfect memory, he said. For AR to materialize, the industry must first overcome the silicon challenges related to power, performance and form factor, O’Keefe concluded.
Maarten Sierhuis, Nissan Research Center Silicon Valley, described how, last week in Mountain View, California, a Nissan test autonomous vehicle drove 40 minutes without the driver touching the steering wheel. However, designing autonomous cars to make quick, complex decisions poses a considerable challenge and raises key questions. For example, when should the vehicles be allowed to violate traffic laws to put safety first?
Days 2 and 3 at ISS will delve deeper into the industry with presentations by: Intel, imec, ASML, IC Knowledge, Versum Materials, ASE, PsiQuantum, VLSI Research, IBM, Tufts University, JSR Corporation, Integrated Sensing Systems, Accenture Labs, Deloitte Consulting, Nikon Precison and SEMI.
The SEMI Industry Strategy Symposium (ISS) examines global economic, technology, market, business and geo-political developments influencing the global electronics manufacturing industry along with their implications for your strategic business decisions. For more than 35 years, ISS has been the premier semiconductor conference for senior executives to acquire the latest trend data, technology highlights and industry perspective to support business decisions, customer strategies and the pursuit of greater profitability.