Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : The Hot Button Questions:- Money, Banks, & the Economy -- Ignore unavailable to you. Want to Upgrade?

To: maceng2 who wrote (100)	10/21/2002 7:19:26 PM
From: maceng2	Read Replies (1) \| Respond to of 1417

As if this was not expected... e-insite.net ------------------------------------------------------ Chip Profits Crisis By Richard Ball, Electronics Weekly -- Electronic News, 10/16/2002 NICE, FRANCE -- The semiconductor business is facing a crisis with chip companies finding it harder to make profits as costs increase, according to delegates at last week’s SAME conference. The shift to smaller processes, such as 0.13-micron and 90nm, is cutting margins to the point where no real profit can be made from chip making. "What we’re facing is not an engineering problem, it’s an economics problem," said Jacques Benkoski, president and CEO of EDA tool supplier Monterey Design Systems Inc. "The profitability of the semiconductor industry is at stake here." Very few designs reach the volumes needed to make them profitable, while programmable logic is still too expensive, he said. "The cost incurred by not being right first time is tremendous," said Guillaume d'Eyssautier, European VP at Cadence Design Systems Inc. Robert Payne, CTO at Philips Semiconductors, added, "The chip industry won't recover when the economy recovers unless we can stimulate demand." But rather than being an economic problem, Payne said a collapse in the chip industry would be the fault of designers failing to innovate. "There’s a crisis of confidence in the industry," said Jim Tully, chief analyst at Gartner Dataquest. Tully said the number of ASIC design starts peaked at 11,000 a year in 1997, but by last year had dropped to about 5,000. This trend is caused mainly by the success of integration and SOC design, but leaves fabs running at lower capacity, especially if they move to 300mm wafers. The big winners have been the IP sector and programmable logic. IP grew about 25 percent last year, according to Tully, while FPGAs have been mopping up the low end of the ASIC market. ----------------------------------------------------------- There will be some big losers in the near future. 300mm migrations are just the tip of the iceberg. 200mm migrations will flood the industry with chips. 150mm migrations are already doing that. yyyyyyyyyyyawn pearly.