Electronics Enters and Era of 'Systemic Risk

From EE Times and yesterday's Global Foundries Conference we hear from several industry leaders. The header for the discussion:

Electronics enters era of 'systemic risk'

During a panel at the conference Aart de Geus, chief executive of Synopsys, had this to say:

"We're not just dealing with silicon scaling complexity but with a kind of systemic complexity where being best-in-class in one area is not sufficient to avoid risk and risks are going up."

"It's a winner-takes-all situation with whole ecosystems racing to high volume systems, so value chains become very important."

A strong value chain is required today and it will be even more important in the next few years. Recall my comments the other day about the need to have everyone in sync when the industry transitions to 450mm wafers:

Applied Materials and the Semi-Equips

The chain extends well beyond the fab and the packaging house. If you are one of the remaining high volume producers of smartphones, tablets and, heaven forbid, PCs, you are bound to be a part of that chain. Hopefully your partners are all in sync.

Also on the panel was Warren East, chief executive of ARM. Supposedly he tipped his hat to Apple when he said,

"As products get more complex, no one company can provide everything, but some can provide a great deal of the system."

Hmmm... We're going to find out how good the Apple foodchain is over the next couple of quarters. Everyone knows that TSMC is the company that they want to make the next iteration of their processor (A-6). A good friend, a process expert that works right in the trench, had this to say when asked about TSMC's efforts:

I guess then the 28nm scaling of some long-in-the-tooth device technology coupled with a new form of packaging technology could provide for a perfect “s”-storm scenario. That ought to have someone at Apple concerned, I would think, not to mention TSMC. If it causes them to skip a beat on getting new products out relative to the steady drum-beat of new product announcements in the past – put in context after the Jobs resignation – and you could easily have a lot of folks shouting “See, I told ya so.” Rarely do those types do enough digging to realize the pre-cursor to such a hiccup was already set into motion while Jobs was still at the helm.

It is anticipated that the The A-6 processor, as noted on many tech sites, will hit the market in the second quarter of next year. It will be interesting to see if that time line can be met. What if it doesn't work? Will they go back to rely on Samsung?

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Is the chip industry really getting close to the wall? The challenge of improving chip yields, a subject we have been discussing on my mailing list over the past two weeks, was mentioned by the panel:

"Process technology tolerances are edging closer to design rule margins, affecting chip yields which can be in single digits as new nodes first come up. That means changes in IC design can more readily impact manufacturing yields."

Single digit yields (and in some cases a bit higher) are exactly what we are hearing about today. Maybe we are getting close to the wall? Speculation that the end is near has been going on for years. Perhaps it is just going to take more time to get past the challenges?