The changing semiconductor industry: from components to silicon systems

Over the last 30 years the global semiconductor market has grown at an average rate of 17%, to its present size of 130 billion/year. And it is not showing any signs of slowing. With the advent of the personal computer and more recently the growth of mobile communications, especially mobile phones, the semiconductor content of electronic equipment has been rising dramatically. This trend will only continue as devices get smarter and estimates predict the continued growth of the semiconductor industry to a figure of almost 250 billion/year by 2003. While overall volume growth has been relatively stable, with the demand for memory bits and CPU cycles showing a generally steady growth throughout the period, it hides quite a considerable year-to-year fluctuation in the annual growth rate in dollar terms. This cyclical variation, from the dizzy heights of +40% to the worrying lows of -8%, has primarily been due to price erosion of ageing products. The memory market is a good example of the nature of the overall semiconductor market. With each increase in memory size, prices start high and quickly erode as production ramps up. Overall however, the cost per megabyte has continually dropped. The huge rise in output and tumbling prices have largely been facilitated by shrinking feature sizes and increasing wafer sizes. Over the years we've moved from 3" wafers to 300 mm (12") wafers. At the same time feature sizes have dropped to a current low of 0.25 /spl mu/m in volume production for cutting edge products with 0.18 /spl mu/m presently being ramped up, increasing the number of transistors/cm/sup 2/ from a few hundred thousand to tens of millions. This improved output has made our business boom possible. It has also raised a number of technological challenges and has been a major driver of our changing approach to silicon design.