The first third of this year has been incredibly interesting, driven by technical and business trends that will continue to impact the electronics industry for a long while. Here’s a short list.
First, short-term uncertainties, long-term confidence. Some analysts are predicting the chip industry may shrink this year, generating short-term anxieties. Take heart. Next year is the double boon of a U.S. presidential election and a summer Olympics…in China, no less. Longer term, wireless links are expanding the Web to new parts of the global economy.
Secondly, competition remains robust. Intel is nearly crushing AMD, and H-P is kicking Dell down the rankings. And yet, central Texas has a 3.5 percent unemployment rate, and regional economic growth is said to be limited by a scarcity of talent. Capitalism is working, bruises and all.
Third, innovation thrives. Intel will soon be making MPUs with high-k dielectrics and metal gates, while IBM has committed to embedded DRAM on its processors and through silicon vias on power amplifiers and MPUs. Now, if the design tools and compilers could do as well.
Fourth, fab-lite spreads like wildfire. Texas Instruments surprised many early this year when it said it would license future process technology from a foundry. To varying degrees, executives from IDMs including AMD, Freescale, Sony, and STMicroelectronics have all said nice things about fab-lite strategies, and have strengthened relationships with foundry partners. Those $12 billion gigafabs at TSMC may fill up faster than many thought.
Fifth, Google wins, paper loses. Google seems to have figured out how to make money (a cool billion dollars in the first quarter alone) while the print media, which has done very well since Johannes Gutenberg’s invention in 1440, morphs into a “Web-plus-print, maybe” mode.
Sixth, global warming represents a boon to electronics. As the data builds and Arctic glaciers melt, global warming no longer is being dismissed as a liberal fantasy. What is bad for the polar bears and so many other species may benefit engineers. Tax breaks for hybrid vehicles, solar-generated power, and working from home should bolster the electronics industry as traditional markets mature.