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Overview of Microelectronics Overview of Microelectronics
Market in RussiaMarket in Russia
AN INNOVATION DRIVEN ASSESSMENTAN INNOVATION DRIVEN ASSESSMENT
SEMICON Russia June 2013SEMICON Russia June 2013
© 2013 Frost & Sullivan. All rights reserved. This document contains highly confidential information and is the sole property of
Frost & Sullivan. No part of it may be circulated, quoted, copied or otherwise reproduced without the written approval of Frost & Sullivan.
2
Innovation driven future world!As part of the TechVision psyche, we look at “technology cluster ↔ market ↔ trend” interplay to evaluate and
pick top 50 technologies (for a given year) from a larger pool of 140 or so technology capabilities
Medical Devices
& Imaging
Technology
Mic
roel
ectr
on
ics
Sensors & Control
Sustainable EnergyClean & Green
Environment
Ad
van
ced
Man
ufa
ctu
rin
g &
Au
tom
atio
n
Informatio
n &
Communication
Technology
Materials & Coatings
Health & Wellness
Automotive &Transportation
Chemicals,
Materials & Food
En
ergy
&
En
viro
nm
ent
Electronics &
Security
Healthcare
Industrial
Automation &
Process Control
Metals&
Minerals
Mea
sure
men
t &
Inst
rum
enta
tion
Aerospace &
Defense
Urbanization:City as a Customer “Smart” is The New
Green
Social
Trends
Connec
tivi
ty&
Conve
rgen
ce
Bricks & Clicks
Innovating to Zero
New Business Models:
Value for Many
Beyo
nd
BR
IC: T
he
Next G
ame
Ch
angers
Future
Infra
structu
re
Developm
ent
Health,
Wellness,
&
Well-Being
Future of Mobility
F&S’s
Technology
Clusters
F&S’s
Vertical
Business
UnitsMega Trends
Technology
Candidates
3
Technology Attractiveness Dashboard9 dimensions (cornerstone of technology selection) that eventually influence a technology to be a “market
show stopper” rather than a “technology gimmick”
Year of Impact Market Potential Global Footprint
IP Intensity Funding Breadth of Industries
Megatrend Impact Potential Points of Convergence Size of Innovation Ecosystem
4
Top 50
Technologies
Web
Regenerative MedicineNext-Gen Sequencing
BiomarkersPersonalized MedicineTargeted Drug Delivery
Genetic Cosmetics
Advanced Energy Storage
Concentrated Solar PowerWind Power
Grid Energy ManagementSuperconductors
Waste-to-Energy
Advanced FiltrationSolid Waste Treatment
BiochemicalsDesalination
General Illumination LEDs
Energy Efficient ProcessorsNext-Gen Non-Volatile Memory
Smart Haptics & TouchFlexible ElectronicsOLED Displays
Carbon FibersBiocompositesSuperhydrophobic Coatings
Smart PackagingLightweight Composites
Polymer ChameleonsAlternative Feedstocks
Nanocoatings
CBRNE DetectionEnergy Harvesting
NanosensorsUbiquitous Wireless Sensor
Roll-to-Roll Manufacturing
3D PrintingComposites ManufacturingMicromanufacturing
Remote Patient MonitoringSurgical Robots
Interventional Radiology Neuromodulation Technologies
Information & Communication Technology
Health &
Wellness
Sustainable Energy
Clean &
Green Environment Microelectronics
Materials & Coatings
Sensors & Controls
Medical Device & Imaging
Technology
Advanced Manufacturing &
Automation
5
Interesting signals associated with Top 50 TechnologiesIdentifying and evaluating macro/micro signals (past, present, forecasted) associated with the technologies is
key to understanding the true potential and their future impact on markets and industries
$1.9 Tn over 5 years$1.9 Tn over 5 years$104 Bn in 2012$104 Bn in 2012
190k patents awarded over 190k patents awarded over
last 3 years last 3 years
Average impact across Average impact across
5 industries and 5 industries and
3 MegaTrends3 MegaTrends
Ma
rke
t P
ote
nti
al
Pa
ten
t A
ctiv
ity
Fu
nd
ing
Co
nv
erg
en
ce
6
Russian Microelectronics Market Overview –Worldwide & Russia
7
Global Semiconductor Market Worth US$ 320.4 Billion in 2012*
EUROPE
•After a brief slowdown, in 2010
the European semiconductor
market expanded by 27%,
totalling US$ 38.6 billion
AMERICAS
•Sales of semiconductors are concentrated
in the North America, particularly in the US
•In 2011, North American semiconductor
market grew by 40.7%, the highest regional
growth, reaching US$ 54.2 billion
ASIA PACIFIC
•The semiconductor market has risen
by 35% amounting US$ 175.3 billion
•China’s demand for industrial and
automotive ICs was among the key
growth drivers
JAPAN
•Following a difficult 2009, the
Japanese semiconductor
market amounted to US$ 49.0
billion in 2010, 21.1% year-on
year growth
17.2% of the
world market
17.2% of the
world market
12.1% of the
world market
12.1% of the
world market
15.3of the
world market
15.3of the
world market
54.7% of the
world market
54.7% of the
world market
<1% of the
world market
<1% of the
world market
RUSSIA
•In 2012 the Russian semiconductor market is
expected to be valued at US$ 2.2 billion. With
new initiatives and Mega Trends in the global
Industry and in its optimistic scenario, F&S
forecast that by 2018 the market could total
US$9.9 billion
*Source: World Semiconductor Trade Statistics, IC Insights, Frost &Sullivan analysis
Global Semiconductor Market Size – Breakdown of Consumption by Region
8
Semiconductor Market in 2012* – Snapshot
COMMUNICATIONS
Total semiconductor revenue for 2012 stood at $320.4* billion Total semiconductor revenue for 2012 stood at $320.4* billion
*Note: Revenues mentioned here are market estimates
9
The
opportunity
for Russia is
defined by …
The
opportunity
for Russia is
defined by …
The right timing
given the market’s
normal demand
cycles
The right timing
given the market’s
normal demand
cycles
The Russian
Government is
advocating full
support
The Russian
Government is
advocating full
support
The ability to engage
in a partnership to
address weaknesses
The ability to engage
in a partnership to
address weaknesses
Experience with
90nm tech provides
solid foundation
Experience with
90nm tech provides
solid foundation
Russia could be
strategic hub for
supplying
microelectronics
Russia could be
strategic hub for
supplying
microelectronics
Growing demand for
microelectronics
from developing
industries
Growing demand for
microelectronics
from developing
industries
ICTICT
AutomotiveAutomotive
RailRail
Medical
devices
Medical
devices
NavigationNavigation
RFIDRFID
Smart gridsSmart grids
GlobalGlobal
CEECEE
CISCIS
OthersOthers
Opportunity for Russia on the Global Microelectronics Stage
10
Microelectronics Capability Requirement for Russia
Capital and land
Effective transportation
/ logistics
Robust Public-Private
Framework
Technical and Managerial Competence Tax and Tariffs
Tax and Tariffs
•Semiconductor industry remains sensitive about various policy issues. The Government must create the right
incentives for investment by revisiting its policy for tax and import/export duties, in
order to become competitive on a world stage.
•Creation of economic zones with
preferential treatment as Zelenograd or Skolkovo is a welcoming step forward.
Capital and Land
•Russia boasts no shortage of land mass for manufacturing expansion
as opposed to, for example, Taiwan or South Korea – both countries also
prone to earthquake impacts as a stability concern for the industry.
• Government’s support of microelectronics development, we believe, also signifies readiness to
provide capital funding.
Robust Public-Private Framework
•Globally, semiconductor industry has evolved due to successful cooperation between public and private
institutions – governmental bodies, R&D institutes, business investors.
•In particular, Russia must encourage and facilitate commercialization of innovations by large number of
start-ups and R&D centres in the country.
Effective Transportation/ Logistics
•Both semiconductor and electronics manufacturing rely heavily of effective
logistics system – Russia is advantageous on the cost side, however a lot yet to be
done in terms of efficiency.
•On a flip side, advances in microelectronics can help solving some of
the pressing issues in transportation (RFID tagging, satelite navigation, stolen vehicles
tracking).
Technical and Managerial
Competence
•Russian has good technical education, with proper training in
microelectronics its graduates could become a potent driving force
behind the industry growth.
•More is to be done in terms of
developing managerial competencies.
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Partner Evaluation Criterion
✔✔✔✔ Current exposure in Russia
Company’s presence in Russia, including non-microelectronics businesses, in particular –availability of manufacturing capacities or R&D centres
✔✔✔✔ Political and economic relations
Major semiconductor corporations are the beacons of their homeland’s technological and economic prowess; cooperation with such firms usually involves senior government officials and evolves within a framework of wider intergovernmental relations. For example, Brazil’s engagement with Toshiba in the field of microelectronics was initiated at Brazil-Japan talks; Intel’s Chairman personally flew and met with Israeli Prime-Minister to discuss potential investment into new fab.
✔✔✔✔ Product focus
Relevance of the company’s product portfolio to the domestic microelectronics demand in Russia is crucial. For example, partnering with a company which solely produces memory ICs or chipsets for mobile communications is less attractive due to lack of internal demand
✔✔✔✔ Investment outlook
That is company’s on-going, large-scale investment projects elsewhere would make commitment to a significant project in Russia less likely
✔✔✔✔ Business model and strategy
For example, foundries are less attractive for knowledge sharing and technology transfer agreements
✔✔✔✔ Other
Collaboration history, experience/willingness to operate in the emerging markets’, past
technology transfer agreements, cooperation with government bodies
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Inputs into the Microelectronics Market in Russia
1. We believe that there is an opportunity for Russia to be established as a
manufacturing hub in the global micro-electronics industry.
2. Given the industry’s demand cycles and given the lead-time for Russia to move
from planning to execution, there is a limited window-of-opportunity.
3. There is a tendency for specialisation (fabless/ fab-lite vs. foundry), rather than
implementation of an end-to-end (IDM) business model.
4. Irrespective of the business model, countries wishing to be established as a global
hub need to develop a powerful value proposition based on an holistic ecosystem.
5. For the strategy to be successful, partnerships at several levels are required – a
technology-focused approach is insufficient.
Having a clear strategy based on these points PRIOR to engaging potential partners is critical.Having a clear strategy based on these points PRIOR to engaging potential partners is critical.
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Russian MicroelectronicsMarket Survey 2013. Part I
• Highlights and key findings
14
Russian Microelectronics Market Insight(April – May 2013)
Around 100 participants
from Russian and foreign
companies
Technical experts and
top-level respondents
15
Which segments have the best growth perspectives in the next 3 years?
Top 4segments
Top 4segments
Source: Frost & Sullivan.
Processors (MCU, MPU, DSP) RF Components and ICs
Optoelectronics MEMS and sensors
64%
36%
43%
29%
16
Which industries will demonstrate the largest demand for microelectronics products in the next three years?
Other industries noted: Lighting, Healthcare, Energy, Automation Systems
Source: Frost & Sullivan.
Aerospace & Defence
Telecommunication
Transportation
• Role of State
• Sharp increase of government financing
• Change of production and purchase strategy
• General development of the market
• Growth of navigation segment
• Localization of manufacturing in Russia
• Focus on components production
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What are the prospects of your company revenue growth in the next 3 years?
10%
18%
27%
45%
0% 10% 20% 30% 40% 50%
No change
<10%
annually
10-20%
annually
>20%
annually
Source: Frost & Sullivan.
45%
of respondents believe their
revenue will grow faster than
the market
18
What are the main strategic priorities for your company in the next 3 years?
Source: Frost & Sullivan.
Diversification
Development of new technologies
Cost optimization
New markets/ segments penetration
11
22
33
44
Other priorities noted: Further penetration of the Russian market,
Consolidation of the assets, Survival
“Further penetration of the Russian Market is a
key objective for us” ©
19
Microelectronic Market RestraintsRanked in Order of Impact
Other restraints noted•Lack of complex approach to government cluster policy
•Unfair competition
•Lack of development strategy and roadmaps for the industry
•Customs limitation (significant period of time for all custom procedures)
Insufficient government support
Weak local market demand
Drawbacks in legislation
Technology and infrastructure insufficiency
11
22
33
44
“Imperfect tax and customs legislation, focused
only on fiscal measures” ©
20
What State measures are the most efficient for the development of microelectronics in Russia?
Development of special clusters
Tax incentives
Grant/project financing
Fundamental and applied research
financing
Preferences for local producers in state
purchase contracts
Export support
Potential
effectiveness
Low High
Low High
Low High
Low High
Low High
Low High
1 52 3 4
1 52 3 4
1 52 3 4
1 52 3 4
1 52 3 4
1 52 3 4
of respondents noted that
current government support
measures are NOT enough to
maintain Russian
microelectronics
competitiveness
Source: Frost & Sullivan.
92%
21
Key Emerging Technologies
22
Memory Technologies – Industry Scenario
Technologies
Magnetoresistive
RAM
Phase
Change
Memory
Ferroelectric
Memory
Nanotechnology
-Based Memory
Emerging Memory Technologies
• There has been persistent demand for high density, low cost, low power, and high-performance data storage devices
attributed by end-user’s ever growing need for more memory.
• Storage capacity of devices such as hard disk drives and flash drives are constantly enhanced; solid state drives with
NAND flash memory are gaining momentum.
• While CDs and DVDs are currently the most popular low-cost storage device, Blu-Ray discs though attributed by high-
storage capacity are expensive and not widely adopted. Technologies, such as, holographic technology are capable
of offering high-storage densities, but it is still in the development stage.
• To effectively address the challenges associated with certain existing and emerging data storage technologies,
researchers are investigating new memory technologies such as magnetoresistive random access memory (MRAM),
nanotechnology-based memory (NRAM), phase change (PCM/PRAM) and ferroelectric memory (FRAM).
• There has been persistent demand for high density, low cost, low power, and high-performance data storage devices
attributed by end-user’s ever growing need for more memory.
• Storage capacity of devices such as hard disk drives and flash drives are constantly enhanced; solid state drives with
NAND flash memory are gaining momentum.
• While CDs and DVDs are currently the most popular low-cost storage device, Blu-Ray discs though attributed by high-
storage capacity are expensive and not widely adopted. Technologies, such as, holographic technology are capable
of offering high-storage densities, but it is still in the development stage.
• To effectively address the challenges associated with certain existing and emerging data storage technologies,
researchers are investigating new memory technologies such as magnetoresistive random access memory (MRAM),
nanotechnology-based memory (NRAM), phase change (PCM/PRAM) and ferroelectric memory (FRAM).
OverviewOverview
• MRAM is gaining momentum; and with improvements in performance and density, MRAM can be used for data
storage applications (solid-state drives). High speed, high capacity, non-volatility are the key attributes that make
MRAM a candidate of choice compared to other emerging memory technologies. With spin-transfer-torque-write
MRAM and toggle MRAM considered as alternate switching mechanisms to conventional MRAM, spin-transfer-
torque-write MRAM is gaining attraction in the recent years, due to its low-power consumption and enhanced
scalability over conventional MRAM.
• Ferroelectric memory is characterized by high-access speed, high endurance in write mode, low-power consumption,
non-volatility, and excellent mechanical resistance. Such memory finds potential use in smart cards, where high
security and low-power consumption features are desired, as well as in cellular phones and other applications such
as data storage devices.
• PCM/PRAM is attributed by high endurance and enhanced scalability; PRAM may be considered in computer
memory as well as in data storage systems/solid state drives in the long term.
• Nanostructures such as CNTs are evolving to be potential data storage technologies due to their enhanced scalability
and storage capacity.
• MRAM is gaining momentum; and with improvements in performance and density, MRAM can be used for data
storage applications (solid-state drives). High speed, high capacity, non-volatility are the key attributes that make
MRAM a candidate of choice compared to other emerging memory technologies. With spin-transfer-torque-write
MRAM and toggle MRAM considered as alternate switching mechanisms to conventional MRAM, spin-transfer-
torque-write MRAM is gaining attraction in the recent years, due to its low-power consumption and enhanced
scalability over conventional MRAM.
• Ferroelectric memory is characterized by high-access speed, high endurance in write mode, low-power consumption,
non-volatility, and excellent mechanical resistance. Such memory finds potential use in smart cards, where high
security and low-power consumption features are desired, as well as in cellular phones and other applications such
as data storage devices.
• PCM/PRAM is attributed by high endurance and enhanced scalability; PRAM may be considered in computer
memory as well as in data storage systems/solid state drives in the long term.
• Nanostructures such as CNTs are evolving to be potential data storage technologies due to their enhanced scalability
and storage capacity.
TrendsTrends
23
Compound Semiconductor – Technology Snapshot
• Silicon MOSFETs have now approached a performance plateau, while cost of advancements has
increased dramatically. Concurrently, next generation and emerging applications are demanding
further substantial leaps in power conversion performance. Hence, to meet the new requirements of
forthcoming applications, new materials and transistor structures are needed to fill this gap.
• Using compound semiconductor materials, a new generation of electronic devices can be unleashed
that combine the capability to handle higher powers with lower switching loss and higher operating
frequencies, that could boost the efficiency of power inverters, while trimming their size and weight.
• Benefits that would follow include better power supplies for computers and more efficient power
conversion in solar converters and hybrid electrical vehicles.
• Silicon MOSFETs have now approached a performance plateau, while cost of advancements has
increased dramatically. Concurrently, next generation and emerging applications are demanding
further substantial leaps in power conversion performance. Hence, to meet the new requirements of
forthcoming applications, new materials and transistor structures are needed to fill this gap.
• Using compound semiconductor materials, a new generation of electronic devices can be unleashed
that combine the capability to handle higher powers with lower switching loss and higher operating
frequencies, that could boost the efficiency of power inverters, while trimming their size and weight.
• Benefits that would follow include better power supplies for computers and more efficient power
conversion in solar converters and hybrid electrical vehicles.
OverviewOverview
• Although, silicon carbide (SiC) FETs have emerged on the scene in the past 10 years to address these
issues, they suffer from significant cost premiums due to limited quality material supply, as well as the
intrinsic cost structure of the material.
• Structurally, bulk gallium nitride (GaN) substrates have been prohibitively high-priced, requiring the
use of hetero-epitaxial films. However, major substrates used for GaN epitaxy until now, such as SiC
or sapphire, have also been relatively expensive.
• Gallium arsenide (GaAs) can operate at higher power levels than the equivalent silicon device thanks
to a higher breakdown voltages. However, high power operation is limited due to the poor thermal
conductivity of the material. Overall, GaAs offers a good balance of properties for a wide range of RF
applications.
• Although, silicon carbide (SiC) FETs have emerged on the scene in the past 10 years to address these
issues, they suffer from significant cost premiums due to limited quality material supply, as well as the
intrinsic cost structure of the material.
• Structurally, bulk gallium nitride (GaN) substrates have been prohibitively high-priced, requiring the
use of hetero-epitaxial films. However, major substrates used for GaN epitaxy until now, such as SiC
or sapphire, have also been relatively expensive.
• Gallium arsenide (GaAs) can operate at higher power levels than the equivalent silicon device thanks
to a higher breakdown voltages. However, high power operation is limited due to the poor thermal
conductivity of the material. Overall, GaAs offers a good balance of properties for a wide range of RF
applications.
TrendsTrends
Silicon
Carbide
Gallium
Nitride
Gallium Gallium
ArsenideArsenide
Compound Compound
Semiconductor Semiconductor
MaterialsMaterials
24
Waves of InnovationEvolution of technologies at different rates gives rise to various waves of innovation that impact industries and
markets at varying times
Flexible
Electronics
Advanced
Chemical
Batteries
Smart
Sensors
Electric
Vehicles
Future Application:
Rollable-intelligent
down-hole pipe
measurement
New paradigm in
automotive industry
paving the way for
new players with
disruptive potential
For e.g.: Bend polymer could
be used for batteries
Prime Driver: Consumer
Industry with growth annual
global of CAGR >19% for 2014-
2020
1 year
2 year
3 year
Legend:
25
Innovation Convergence Drives Solutions
26
Our Presenter Today
Ankit A. ShuklaPractice Director,
Europe
Technical Insights
Frost & SullivanGlobalOxford, UK
Functional Expertise
• Extensive experience of working with global and regional organizations providing them guidance on key strategies
related to technology, innovation and business development
• Particular expertise assisting R&D and Strategy teams in leading companies with the development and
implementation of their growth strategies in:
- Technology strategy development
- Innovation and Intellectual Property management
- Commercial due diligence
- Future R&D focus/strategic partnership development
Industry Expertise
� Experience base covering broad range of sectors and technology clusters, providing thought leadership guidance
to leading industry participants’ CTOs, R&D & Business Development Heads and Senior Executives in
- Aerospace & Defense
- Automation & Electronics
- Research entities
What I bring to the Team
• Years of industry contacts and connections, understanding technology and market trends across sectors
• Extensive client interaction and strategic project management
• “Impossible is nothing” attitude
Career Highlights
• Worked at Space Applications Center (Indian Space Research Organization) on satellite payloads
• At Frost & Sullivan, worked extensively with range of companies, government organizations, R&D Labs including:
- BAE Systems, Thales, EADS, Lockheed Martin, W.L. Gore, SABIC, Total, BP, ABB
- Kimberly Clark, SKF, Clariant, L’Oreal, Rusnano, Hitachi, Yorkshire Water, Schott AG
- National Physics Laboratory (UK), VTT, Technology Strategy Board (UK) and many others
Education
• MS in Control Systems from University of Sheffield (Sheffield, UK)
• B.Eng in Instrumentation & Control Engineering from Gujarat University (Ahmedabad, India)
27
For Additional Information
Ankit A. Shukla
Practise Director, Technical Insights
(Europe)
P: +44 (0) 1865-398687
Alexey Volostnov
Business Development Director, Russia
P: +7 499 918 6146 | M: + 7 916 811 4425
