Working Toward a Truly Borderless Semiconductor Business
From its inception, the semiconductor industry has, on average,
grown much faster than the global gross domestic product (GDP).
Since 1987, when semiconductor growth and global GDP growth
started to correlate strongly, the industry has delivered innovation,
convenience and capability far exceeding any other innovation, and
in doing so grown the business to nearly $300 billion per year. But in
the past decade, despite the most prosperous growth in human history,
measured simply by global GDP increase; semiconductor industry
revenue has not been able to keep up with the society it serves. The
interesting and critical issue isn't which region will take up the larger
share of this $300 billion, but how we can break down the regional
barriers and mindset to grow the semiconductor industry to $400
billion per year.
Globalization as a Necessity
First, let's try to illustrate the need for globalization, besides the fact
that oscillating around $300 billion isn't a viable business. Around
the globe, all bemoan the problems of flat lining growth, competitive
pressure and issues of scale. But each region has its own unique,
specific issues. The United States sees a hollowing of capital and
human resources to mobile/online media; Japan sees a need for a
structural change in its industry; Taiwan sees lack of roadmap clarity
for its execution machines; China still struggles to convert "homefield"
advantage into growth; and Israel sees promising start-ups
mostly turn into subsidiaries of multi-nationals. The fact that each
region has its distinctive view of challenges suggests that each region
possesses its own strengths, focuses on different areas of the market/
value-chain and is vulnerable to its own region-specific issues.
China's Semiconductor Industry Continues to be a Bright Spot in the Global Economy
Over the past several years, the Chinese central government has
created a favorable business environment to enable the growth
of the semiconductor industry in China. That support was on
full display this past October during the 10th China International
Semiconductor Exhibition and Forum (IC China 2012), a forum for
industry exchange and international cooperation on the development
of China's semiconductor industry. More than 200 exhibitors spanning
the entire industrial chain participated in this vibrant, three-day event
hosted by the China Semiconductor Industry Association (CSIA).
This has been an important year for the Chinese Semiconductor
Industry. The implementation of the National Economic and Social
Development 12th Five-Year Plan and the State Council's decision
to accelerate the development of new strategic industries has helped
make China the largest semiconductor market in the world, and its
consumption of semiconductors the highest worldwide.