Financial crisis drives innovation in chip market

Ng: Companies that continue to innovate through the current recession will be the ones to emerge as future winners.

In September 2008, the global financial crisis stopped the chip industry. This collapse was all encompassing; it impacted all market sectors, all end use applications, all regions and all customers simultaneously—there were no safe havens. The world saw the severest recession on record: For our industry, IC demand plunged almost 40 percent in two quarters from Q4 2008 to Q1 2009.

While recessions, like a tsunami, can be devastating and traumatic, they also lay the foundation for the subsequent recovery, accelerating innovation and launching new applications. These side effects help restart the markets, transform the landscape and create new opportunities for growth.

Recession seeds innovation
Now, we are seeing the markets rebound and there are clear signs that the chip industry is innovating to enable new products and applications that were previously impossible, probably due to cost, size or technology. These innovations will enhance our overall quality of life and make our daily routines richer.

Many of these innovative new products address real needs confronting the world today. Some focus on environmental problems, energy management, healthcare, safety and security; some target expanding connectivity challenges; still others believe in infotainment opportunities, from enriched multimedia content to new products and delivery options.

The green environmental agenda has moved from being the concern of a few to the very center of the boardroom. The need to reduce greenhouse gas emissions and consumption of fossil fuels is now one of the most important boardroom, government and consumer concerns. We are certain that semiconductors will play a crucial enabling role in providing innovative solutions that will challenge the best endeavors of our best and brightest engineers.

Solar power was probably the first new green energy source to explode in applications and growth, heralding the way for innovators to apply semiconductor technology to other green energy sources such as wind, tide and fuel cells. Semiconductors are also playing a key role in optimizing the conversion efficiency of both new and existing sources, in particular in enabling more efficient generation and distribution of electrical energy supplies.

Automotive electronics
Fuel consumption of automobiles and the reduction of harmful exhaust emissions has already benefited from semiconductor technology. The next generations of hybrid and electric vehicles, combined with even further levels of energy-efficiency improvement in conventional vehicles promises further improvements in these areas. Manufacturers are moving to combine intelligent navigation and traffic management systems with driverless automation and anti-collision systems to produce dramatic improvements in safety and highway capacity utilization as well as even more efficient vehicle use.

Semiconductor-driven solutions will transform electric motor control, home appliances, computers, office products and lighting—one of the single biggest energy users. Building automation, smart metering and power management will further contribute to energy savings. None of these gains would be possible without chip innovation.