Happy new year, to all of you. 🙂 And, it gets even better, having a discussion with Dr. Walden C. Rhines, CEO and Chairman of the Board of Directors of Mentor, A Siemens Company, on the global semiconductor industry trends for the year 2019.
Semiconductor industry in 2018, and 2019
First, I needed to know how did the global semiconductor industry performed last year? And, what is the way forward in 2019.
Dr. Wally Rhines said: “2018 was another strong growth year for the global semiconductor. IC bookings for the first 10 months remain above 2017 levels and silicon area shipments for the last six quarters have also been above the trends line, with fourth quarter YoY growth 10 percent. And, IC revenues overall continue to have strong double-digit growth for 2018, with fourth quarter YoY growth of nearly 23 percent.
“However, analysts are expecting much more modest growth in 2019. Individual analyst predictions for growth in 2019 vary from -2 to +8 percent, with the average forecasts at +4.4 percent.
“Much of this is due to the softening memory market, along with concerns about tariffs, inflation and global trade war. While the rest of the IC business has been relatively strong with Samsung and Intel noting solid demand for ICs for servers and PCs, sentiment by senior managers of semiconductor companies is near a record low level. So, I’m not expecting much growth, if any, in 2019 and more likely a decline.
EDA in 2019
On the same note, how is the global EDA industry performing, and what’s the path in 2019?
He said: “Revenue growth of the EDA industry continues to be remarkably strong, fueled by new entrants into the IC design world, like networking companies (e.g. Google, Facebook, Amazon, Alibaba, etc.) and automotive system and Tier1 companies, as well as a plethora of new AI-driven fabless semiconductor start-ups. Design activity precedes semiconductor revenue growth so it would not be surprising to continue to see strong EDA company performance even with a weak semiconductor market in 2019.
“EDA venture funding has rebounded, reaching a 6-year high of $16.5M showing a renewed confidence in the future of EDA. The major companies all have sighted better than expected results. On the semiconductor side of EDA there seem to be more technology challenges than the industry has faced in a long time.
“Some of those include new compute architectures, the emergence of photonics, increased lithographic complexities involving EUV and other techniques, new and more complex packaging, massive increases in data, and the multiplication of sources of design data (often created according to differing standards).
“The challenges on the system side of EDA are multiplying as expected. It is becoming more difficult to be at the leading edge when designing end-products in silos. Embedded software, mechanical, PCB, packaging, electrical interconnect, networking (access to the intranet) and security are just a few of the domains that need to work closer together in a more integrated manner. The increasing complexity is also making each of the domains more challenging. This all pushes new materials and methodologies into each of the domains listed above.”
Five trends in semicon for 2019
I wanted to find out about the top five trends in semicon for 2019.
He said: “The top five semiconductor technology trends include:
* the ongoing ramp of next-generation technologies, led by Machine Learning, Artificial Intelligence and cloud, and SaaS demand on the datacenter,
* the roll-out of IoT – especially in manufacturing,
* 5G development,
* computing on the edge, and
*the increasing semiconductor content within electrical devices.”
Menlo Micro announced that it has successfully ported Digital-Micro-Switch (DMS) technology platform from an R&D facility to a commercial 8” wafer manufacturing line, at Electronica 2018, Messe Munchen, Germany.
Menlo is a GE spinoff that is re-inventing the electronic switch. Menlo’s DMS technology operates up to 1000x faster than a typical mechanical switch with 1000x longer lifetime. It can handle kilowatts of power and is built in a structure smaller than a human hair.
Working in partnership with Corning Inc. and Silex Microsystems, Menlo is now sampling product from this new manufacturing line and will begin scaling up the production of its unique micro-mechanical switches before year’s end.
Elaborating on the Digital-Micro-Switch (DMS) technology platform, Menlo’s senior VP of Products, Chris Giovanniello, said: “The electromechanical switch hasn’t experienced much change in the past 150 years, and many of the applications Menlo is addressing have seen little innovation in the last 25 years. Menlo Micro’s innovations have come to market by developing unique materials, designs and processing techniques to build an enhanced electronic switch that can handle high-temperature, high-stress conditions for products that require decades of useful life.
“Menlo Micro’s DMS platform is the re-invention of the most basic electronic function, the switch. It is a game changer for those who design electronic systems with a market opportunity of more than $20 billion.
“It has the potential to serve multiple industries, including: next generation 5G mobile networks, industrial IoT markets, battery management, energy management, enterprise building management, home automation, electric vehicles and medical instrumentation.
“The new switch operates up to 1000x faster than a typical mechanical switch with 1000x longer lifetime; it can handle hundreds of watts of power and is built in a structure smaller than a human hair.”
Some of the key attributes of Menlo Micro’s switch technology include:
Size: Board space and weight are at a premium in many applications. Traditional mechanical switches take up lots of space, have limited number of channels, and in some cases need to be manually assembled. Menlo Micro switching elements are smaller than the width of a human hair and are architected to be scalable, depending on the power ratings required. All switches are manufactured using automated wafer-level processes and tools. They are so small we can fit hundreds of them in a space smaller than 10mm2.
Speed: Making mechanical structures small also means you can make them move fast. A typical mechanical switch might operate in a few milliseconds, whereas Menlo Micro switches can operate 1000x faster, in only a few microseconds. This can have enormous implications on systems that were previously limited in performance by how fast they could reconfigure, or open and close critical circuits.
Power handling: This is an area where Menlo Micro completely throws conventional wisdom out the window. When faced with the prospect of handling higher power levels, most people think bigger. More mass, more metal, larger air gaps between conductors. We took a different approach. We make everything smaller and move the electrical contacts closer and closer together. Our miniaturized switches and scalable architecture allows us to handle 100s of volts and 10s of amps without arcing.
Power efficiency: In an increasing number of systems, power is getting more and more expensive. When you’re working off a battery, every 0.1dB and every microamp counts. Both RF and AC/DC losses need to be balanced with amplification and in some cases with extra power supplies. This is where the Menlo Micro technology really shines.
We can scale our switches to have ultra-low losses, from 1 ohm down to a few milliohms. Additionally, our electrostatic-driven actuator means that a single switch only needs a few pico amperes (pA) to function.
Reliability: When you are developing products to meet the needs of businesses that serve markets like healthcare, aviation, and other mission-critical industrial applications, reliability is not an afterthought; it’s the primary design criteria. In the end, that’s why we are here. Our mechanical switching device has lifetimes more than 1000x longer than traditional mechanical switches; not millions of cycles, but tens of billions of cycles without degrading performance.
“Even more important than the performance demonstrated to date, is the deep understanding in material science, reliability, and failure analysis that enables us to model and predict the failures, so that we can push the technology even further.”Read the rest of this entry »
According to an IC Insights report, the 47 percent full-year 2017 jump in the price-per-bit of DRAM was the largest annual increase since 1978, surpassing the previous high of 45 percent registered 30 years ago in 1988! This sounds interesting!
Are the rising DRAM prices aiding startup Chinese competitors? Are major DRAM suppliers somehow stunting global DRAM demand?
Dr. Walden C. Rhines, president and CEO, Mentor Graphics, a Siemens Business, said: “The DRAM business has always gone through cycles of imbalance between supply and demand. Growth of demand in the last 18 months has been stronger than growth of supply.
“Substantial investments in 2017 by the MOS (metal-oxide semiconductor) memory producers, as well as the addition of China to the supply chain, will correct this imbalance late this year or, at the latest, early next year.”
The DRAM price-per-Gb has been on a steep rise. To this, Dr. Rhines said: “It is a commodity, although there are many types of specialty DRAMs emerging. Because DRAMs are viewed by customers as a near-commodity, the price is heavily influenced by the availability of supply. Supply has been very tight during the last 18 months.
Malcolm Penn, chairman and CEO, Future Horizons, UK, added, “This is supply and demand, pure text-book economics.”
Are the rising DRAM prices opening the door for startup Chinese competitors?
Dr. Rhines noted: “Chinese competitors made their decision to invest in DRAM capacity long before the recent strengthening of demand in the balance of supply and demand. Of course, higher, or stable, pricing may make it easier for new producers to absorb the costs of ramping up new capacity and developing experience with a new technology.”
Malcolm Penn agreed: “Potentially yes, and to anyone else. Coca Cola were contemplating building DRAMs in the 1990s. DSRAM market boom, again, pure text-book economics. Whether or not they succeed is an entirely different matter. If the Chinese do enter the market, can they then survive the inevitable downturn and cycles? That remains to be seen!”
Can the startup Chinese DRAM producers field any competitive product soon? Dr. Rhines noted: “They probably can. But, they will have to develop a production base of “learning” to reduce cost, improve yields and maybe even reliability. This will take some time.”
Penn added: “Technically (i.e., meeting the spec), probably, yes. Reliability, probably no, for the Tier 1 customers (that will take several years to build up the production experience). Cost, definitely not!
“Their small fab scale and late learning curve start means that their die cost will be sizably higher than those of Samsung and SKH, and also Micron. Plus, their yields will be lower. Then, there’s the deep cash pockets issue to fund these ongoing cost disadvantages.”
In a separate situation, some 300mm fabs closing, for example, ProMOS. Dr. Rhines said: “It’s because of an imbalance of supply and demand for the products they make, thus limiting their profitability. It could also be because they don’t see an adequate investment return from the expensive new capacity investments, and therefore, find it more attractive to phase out some of their existing capacity.”
Malcolm Penn felt that the fabs were too old and technically obsolete.
Finally, are there more IC companies making transition to fab-lite or fabless business model?
Penn noted: “There’s no-one left to change! Everyone’s now fablite or fabless, except for Intel and Samsung (logic) and the memory manufacturers.”
Dr. Rhines said: “Based upon the growth of foundry revenue vs. total semiconductor revenue growth, there must be a continuing transition of capacity away from IDMs toward foundries. In addition, IDMs like Samsung are finding it economic to build the foundry business to increase the volume base of products that utilize their technology and capital investment.”