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Intel exec paints picture of better days

Posted: 21 Jul 2009 ?? ?Print Version ?Bookmark and Share

Keywords:Intel keynote? microprocessor? fab tool?

In the opening moments of his keynote at Semicon West, Intel Corp. Ultra Mobility Group senior VP and general manager Anand Chandrasekher offered the beleaguered semiconductor capital equipment executives in the audience the perspective of history.

In 2001, at the height of the last major semiconductor industry downturn, Intel was just beginning work on what would become its Centrino mobile microprocessor platform, Chandrasekher said. At the time, few would have been able to conceive of the idea of surfing the Internet while sitting in a backyard, watching kids play in a pool, he said.

"In 2001, that was not possible," Chandrasekher said. "Today that's an everyday occurrence."

Chandrasekher's point was simple: while the outlook for the semiconductor industry today is beyond bleak, there are new applications for electronics on the horizonperhaps unconceivable todaywhich will drive the consumption of semiconductors and, in turn, investment in semiconductor manufacturing equipment.

At times early on Chandrasekher seemed like a football coach in a half-time locker room, trying to restore the confidence of a team that was being whipped out on the field. The equipment industry has borne the brunt of this downturn, which took shape in the second half of last year and throttled virtually everyone into the second quarter of 2009. Looking to cut costs anywhere and everywhere, chip manufacturers swiftly put the brakes on capital expenditures, including equipment buys.

SEMI, the chip gear industry trade group which organizes Semicon West, projects that the fab tool market will fall by 52 percent this year and that equipment spending as a percentage of semiconductor sales will be a mere seven percent. Market research firm Gartner Inc. currently projects that fab tool spending will decline 45.8 percent to $16.6 billion, a level not seen since the early 1990s.

But Chandrasekher said there is still plenty of room for growth in semiconductors and that the industry would rise again. Downturns, he said, are typically the times when breakthrough products are conceived, which go on to help pull the chip industry from downturns and spawn boons in future years. Companies generally make the best bets on new technologies when money is tight and anxiety is high, he said.

"Recessionary periods tend to be the periods when companies look hard at investments," Chandrasekher said.

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