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Design becoming bigger differentiator in IC industry, analyst says

Posted: 30 Jun 2005 ?? ?Print Version ?Bookmark and Share

Keywords:semiconductor?

Klaus Rinnen, managing vice president at Gartner Dataquest, predicted a bleak future for photomask manufacturers at the Advanced Reticle Symposium here Tuesday (June 28), warning them that they must find a way to capitalize on the rising importance of design as a differentiator within the semiconductor industry.

Rinnen said industry consolidation will result in fewer photomask customers and vendors over the coming years. He said continuing selective and frugal mask usage would result in lower photomask volumes and fewer overall semiconductor designs. Rinnen also predicted that the average selling price of photomasks would grow 30 percent over the next five years.

Rinnen reiterated his firm's forecast, delivered earlier this month, that the semiconductor industry would grow moderately over the next two years - 5.9 percent in 2005 and 6.5 percent in 2006.

Rinnen credited the quick reaction of the semiconductor industry for bringing what appeared to be a looming inventory problem under control, predicting that IC inventory will recover to suitable levels during the second half of the year.

He forecast that the photomask market would grow 5.3 percent in 2005 and 0.1 percent in 2006.

"2006 is when we see demand teetering at the edge of contraction," Rinnen said.

Rinnen predicted big changes for the entire semiconductor food chain over the next 10 years and would be increasingly driven by a consumer market where price, not performance, is king.

Rinnen predicted that consumer markets and four other drivers - scale of manufacturing, increasing device integration, industry consolidation and higher R&D costs - would shape the semiconductor industry of the future. He said that over the next 10 years the differentiator among semiconductor companies would shift from manufacturing to design and intellectual property (IP).

"We believe that the next 10 years will be a decade of change," Rinnen said.

He said photomask vendors must capitalize on the rising importance of design as the IC industry differentiator and that they "must get a piece" of the design-for-manufacturing (DFM) pie.

Rinnen warned photomask makers to be prepared to change with the times, cautioning that a "business as usual" attitude would lead to a next - and final - maskmaker holiday.

- Dylan McGrath

EE Times





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