Toward a Brighter Tomorrow

There are encouraging signs of strength in key segments of our industry. Sales of PCs, video games, and other types of personal electronics were only slightly affected by the economic downturn and should increase substantially as the economy recovers. Semiconductor-industry executives are naturally conservative in tough times, but in recent briefings, I've detected signs of optimism. These good feelings are especially strong from execs who made the right bets before and during the downturn—investing in the right technologies at the right levels to line up with market demand in the post-bubble world.

What are the right technologies? Embedded microprocessors, especially those with exceptionally high performance or low power consumption, have a bright future. So do configurable logic devices, which help equipment manufacturers avoid the increasingly high costs associated with ASIC development. Even memory chips and hard drives, of all things, will play a growing role in our everyday lives as enabling factors in the transition to all-digital multimedia entertainment. These products stand to surpass their current status as lowly commodities—at least for a while.

The future isn't entirely clear. Automobile sales, which grew while the economy shrank, may now be declining. High-definition television hasn't caught on as quickly as many of us predicted, but DVD players have overcome a similarly slow start. PC sales will surely improve in 2003 as customers make upgrades deferred in 2002, but how many people will buy PCs for the first time? Are Western markets finally saturated?

We can't afford to take the recovery for granted. The steps we took to survive the downturn were good, but, in my opinion, they weren't enough. There will be more-difficult decisions regarding projects and people as we get a better idea of how our industry will look in the future. I believe we'll see more demand for leading-edge fabs—including 300mm facilities—than has been predicted so far, and this shift in demand could abruptly deprive older fabs of the business they need to keep going.

Equally important is the need to find new markets and new applications for semiconductors. Worldwide economic productivity grows only a few percent a year. For chip sales to grow faster than that, chips must take a greater share of everyday expenditures. It's easy to see how this happens in some areas. The superior quality of digital cinema, television, and music encourages us to spend more of our entertainment budget on chip technology, for example—but we can divert only so much of our income to entertainment.

I can't say exactly how, but I believe semiconductors can, and must, earn their way into the other lines of our personal budgets. How can integrated circuits add value to our clothing, food, housing, and furniture? I don't have the answers, but I'm sure some of you will help find them.