1985 JAPANESE SEMICONDUCTOR INDUSTRY CONFERENCE
April 14-16, 1985
Hakone Prince Hotel Hakone Japan
SUNDAY, April 14 5:00 p m to 8:00 p m
8:00 p.m. to 9:30 p.m
MONDAY, AprII 15
00 a m
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10:30 a m
11:00 a m
12:00 noon
1:45 p m
2:15 p m.
2:45 p m
3:15 p m
3:45 p.m.
4 15 p.m
6:00 p m
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^ I J*»v^ ^Dataquest
Registration ».. * - ^ , ^ , , , ^ » . * , , . , . ,,. r. Main Lobby
Cocktails * -^. ^, Ballroom
Buffet Breakfast . . . - . . , , . r, ^. - - . .Restaurant "Sakura"
Registration Continues ,». . _^., * _ . , , . . Main Lobby
Welcome . . , . . » . . . . ^ -» .», . . e - ' - Congress Hall Gene Norrett Vice President Dataquest Incorporated
World Semiconductor Outlook * Congress Hall Frederick L Zieber Senior Vice President Dataquest Incorporated
Japanese Semiconductor Market . . : : . . . . Congress Hall Sheridan M. Tatsuno Research Analyst' Dataquest Incorporated
Concentrated or Welt-Balanced Products Strategy? . . . ^ . . Congress Hall
Tsuyoshi Kawanishi Director and Group Executive Semiconductor Group ToshIba Corporation
Break , . . . . _ , . < » . _ . Garden
Technology Futures . . . »4. .^**^* , ' Congress Hall Or William G. Howard Senior Vice f resident Director of Research and Development Motorola. Inc
Government Involvement: Help or Hindrance? Congress Hall Clyde Prestowitz Special Counsel to Ihe Secretary of Japanese Affairs ' -i U S Department of Commerce
Lunch Restaurant "Sakura"
Achievements and Challenges— A View from the Oldest and the Newest Congress Hall
D A DiLeo Product Marketing Manager—IC's AT&T Technology Systems
Fundamental Forces Driving the 32-Bit MRU Market Congress Hall
Richard L Sanquini Vice President and General Manager Microprocessor Group National Semiconductor
Break . . Garden
Japanese Semiconductor Industry—s The Coming New Age Congress Hall
Tomihiro Matsumura Senior Vice President NEC
Challenges and Opportunities Facing U.S. Equipment Suppliers in the Far East . . Congress Hall
Jon D. Tompkins President, Semiconductor Equipment Group Varian Associates
Silicon Pervasiveness ^ Congress Hall Kihachi Tamura President Shin-Etsu Handotai Co , Ltd
Cocktails On the Ship "Koma No. 2"
Dinner ^^ L . - * Congress Hall
Guest Speakers Congress Hall Dr. Atsuyoshi Ouchi W J Sanders III Vice Chairman of the Board Chairman of the Board, President NEC Chief Executive Officer
Advanced Micro Devices, Inc.
1985 JAPANESE SEMICONDUCTOR INDUSTRY CONFERENCE
April 14-16, 1985 Hakone Prince Hotei
Hakone, Japan
TUESDAY, April 16
8:00 a m Buffet Breakfast Restaurant "Sakura"
10:00 a m
10:30 a m
11:00 a^m.
MOS Memory Strategy: Face-to-Face with the New Market Realities Congress Hall
Lane Mason Senior Industry Analyst Dataquest Incorporated
Lithography Technology Today and Tomorrow - * , ^ , , . . Congress Hall
Shoichiro Yoshida Director, General Manager Industrial Supplies and Equipment Division Nikon (Nippon Kogaku)
Break ,, Garden
The Emerging Asian Semiconductor Industry . Congress Hall Dr. P. June Min Senior Managing Director Goldstar Semiconductor and Telecommunications
The Recent Development of Industry Information in Taiwan . . . . v . , . . ^ . . , . . . . Congress Hall
Dr Irving T Ho President Institute for Information Industry
11:30 a m
12:00 noon
1:45 p m
2:15 p.m
2:45 p m
4:15 p.m.
4:30 p.m.
7:00 p,m.
Status Quo and Tomorrow Japanese Semiconductor Industry
Hiroshi Shima Industry Electronics Deputy Director MITI
Lunch . .
MOS Memory, The Propulsion Power of the IC Industry
Sutezo Hata Executive Managing Director Hitachi, Ltd
A Fresh Look at Japan and Asia Eugene J Flath Vice President and Assistant General Intel Corporation
Panel Discussion • NEC • Intel • Hitachi • Motorola • Toshiba • National • GoldStar Semiconductor
Summary of Conference , , , Osamu Ohtake Manager, Research Dataquest Incorporated (Japan)
Cocktails and Buffet Dinner , .
Buses Depart for Tokyo . , , , , . , ,
Congress Hall
Restaurant "Sakura"
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Congress Hall
Manager
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A-1 C A-1 C A-2 C A-2 D A-2 A-2 A-2 A-1 A-1 A-1 A-2 A-1
A-1 A-1 A-2
A-1 A-1 A-1 A-1
C B-2 A-2 C C A-2 D B-2 B-1 C A-1 C A-1 B-2
B-2 C A-2 A-2 B-2 B-1 A-2 B-2 C
mm
4/14 4/14 4/14 4/14 4/14 4/14 4/15 4/14 4/15 4/14 4/14 4/14 4/14 4/14 4/14 4/14 4/15 4/14 4/15 4/14 4/16 4/15 4/14 4/13 4/15 4/14 4/15 4/14 4/14 4/14 4/14 4/14 4/15 4/14 4/14 4/14 4/14 4/14 4/14 4/14 4/14 4/15 4/14 4/14 4/14 4/14 4/14 4/14 4/14 4/14 4/14
^
4/15 4/ie 4/lf 4/16 4/lC 4/ie 4/lC 4/ie 4/lf 4/ie 4/lf 4/ie 4/lf 4/16 4/lf 4/16
4/16 4/16 4/18
4/16 4/17 4/16 4/16
4/16 4/lf 4/16 4/16 4/16 4/lf 4/16 4/16 4/te 4/16 4/16 4/16 4/16 4/16
4/16 4/ie 4/16 4/16 4/ie 4/16 4/16 4/ie 4/16
>», ^t, >», REGISTRATION DQJ
REGISTRATION OK
^ t t ^ K=g ROOM ^M
V VLSI TECHNOLOGY INC. V 9-y*-'5r$*A;{"' ^-:;?h 7>'"7' ^ j ^ ^ W "i? X X 3 > 7-* t ' 3? ;b V i ' >'° Z ^/ -f D >/ v* ^ A° > ^^ ^ ^ tt
2 A tt y
GIBSON. L. R M W 7%a5 W /J !?§ ^ HJ :t eg M —
A-2 c A-1 B-2
4/14 4/14 4/14 4/14
4/ie 4/ie 4/If 4/U
CJ li-208
• * .
••<{...
JSIS Conference - April 14-16, 1985 Hakone, Japan
F0ST-CX>NFBiU5NCB MEgTHlG
1. Room rate should be confirmed in conference letter.
2. Should explain details of room rate in the brochure(ie, rate service chg., tax). Include note in brochure regarding getting reservation in early in order to budget for appropriate rate.
3. Brochures should be out Feb. 1 (per GXi). Ad at the same time Datagram Dec. 1 & Jan. 1. Last ad should go out 2 weeks before conference. Brochure should be ready for Mo on Jan. 1. Majority of speakers should be locked in by Labor Day.
4. 02 suggests having workshops. GN disagrees. Ok to have small DQ presentations, but not called %K>rkshops, because people don't like to give away secrets in front of competitors.
5. Buses good. Food wonderful. High level of att:endee8. Facilities excellent. Copy of tliese notes should go to Gail Van Tubergen, DQJ staff, & marketing.
6. Keep more on schedule for speakers.
7. Seating plan at dlruter needs a little more planning.
8. Allot 45 min. per speaker, instead of 30 minutes.
9. Mechanics of seating vrent flawlessly^
10. Buffet lunch - Day 1 Sit down dinner - Day 1 [Arranged seating] Sit down lunch -<• Day 2 Buffet dinner - Day 2
11. Karaizawa-- possible site for next years conference-4 hour bus ride frem Tokyo. TOO far, should be no furtiher than 2 hours away.
12. Have podiuii close to a doBf' sO Gene cem. leave easily.
13. Lighting not controlled well. System 8hoald.be checked out beforehand. Also, projector buttons should be checked. Have AV people provide exactly the same egui{»ient in practice rocD as in the main meeting room.
-14. Translation - Guy was ok, woman not good. We should pick the exact people we want to translate. Mr. Fujii is good. Larry
. ,- Armstrong will give GN names of good people. Tomoko & Yamane both know Fujii.
• ^
15. Yamane will do suonary of Japanese questionaires. 17 yes- - -Japanese opinion
20 no - - " on location for 19 7 next year
Mo will suBnarize U.S./Eur. guest.
16. Journalists no problem. Larry Armstrong could become a good friend of DQ (Buiness Week).
17. There was a problem with buses leaving. Mo bus for Odawara Station. Hiscommunications with travel agent. DQJ will apologize to clients affected.
18. GN got approx. 6 cards from people who want tapes of speeches. O^ will give GN the tapes. GN will mail out.
19. O^ will send picture of speaker to each one with thank you letter. .
20. Conference Attendee's-list - No way to make it accurate - too many last-minutie chemges.
21. Prospects (Frank Sammann) JSIS Prospects: Alps Electric - Hr. Yoshida
Canon ESI Japan Fuji - Xerox Fujitsu (Yu Hirano) Marubeni Hightech Monsanto (Charles Cook)- - : Naruini China ,Tony Watts <SGS)-ASIA Service
[Give Frank copy of Kuwahara's business card.]
SEH Tokyo Ohka Kogyo (photo resist ) Tokyo Sanyo Toshiba UTC (Mostek Japan) (Sam China)
Each person should copy all business cards to DQ conference staff (ie. Max and San Jose JSIS conference file).
Next year speakers - 1 American - 1 Japanese Speaker on manufacturing.
Pat to write newsleter Priority #1 when she returns
Copies of IC USA articles should go to 02
Datagram l ^ ra
4 7 ^ :ii^ ::=C N
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Dataquest
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Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company, 1290 Ridder Parl< Drive, San Jose, CA 95131, (408) 971-9000, Telex: 171973
-'•i;;5*S»SfSs'.«flt=i*S
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19 84^^ffl 7 0% -^ 6 7%
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(m 1 3 %
9 %
4 1%
2 %
3 0 %
7 0 %
Correction - Please make following changes in the text & slide copy.
I aterial for Mr. Hiroshi Shima of Mill
1) Speech, page 4 (the third line from the bottom) error correction
70 percent 67 percent
2) Appendix 7 (Changes in the Relative Weight of Different Fields in the Demand for IC's in Japan)
1984 TV/VCR " Other consumer goods " OA machinery & equipment " Other equipment for industrial use " For consumer use " For industrial use
error
13% 9%
41% 2%
30% 70%
correction
17% 8%
33% 7%
33% 67%
Dataquest
JAPANESE SEMICONDUCTOR INDUSTRY CONFERENCE EVALUATION QUESTIONNAIRE
Hakone, Japan April t4-16, 1985
Thank you for attending our Japcnese Semiconductor Industry Conference. Would you please assist us jn planning our next conference by completing and returning this questionnaire?
1.' Please rate each praaen^ion on a scale of 1 to 10 (where 10 is highest in terms of youK approval):
CONTENT DELIVERY COMMENTS
Norrett, Welcome Speech
Zleber, World Senticonductor Outlook ^ ^ . £ _
l^tsuno, Japanese Semiconductor Market .JO 1
Matsumtira, The Coming New Age
Howard, Technology Futures
(1 to 10) (1 to 10) (Use reverse side if necessary)
•6 Prestowttz, Help or Hindrance?
DUjaOi The Oldest to the Newest
Sanquini, 3?-M AfPU Market
Kawaniahli Product Strategy?
TompmimbUiS. EquiprmntSuppliers
% i i n M | ^f^n Piirvasiveness —^_
Oucht, Dihrrer Speech
Sand«i«, Dinner Sf»ech
IMason, MOS Memory Strategy
\bshida, Lithography Tbchncriogy
IMIn, Asian Semiconductor Industry
Ho, Industry Information .
Shima, Status Quo wnd Tomorrow .
Hata, MOS Memory
Ptath, Japan and Asia
Ohtake, Summary
2. At our next conference, would you prefer more or less of the following types of ^takers?
MORE LESS
DATAQUEST Speakers
; Speakers from [.arge Semiconductor Comjsanies
;.s.- Speakers from Small Semiconductor Companies .
••tT: Speakers from Semiconductor Users
Speahftrs from Distributors ^ (over)
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
3. Please suggest other types of speakers you might lil<e to hear.
4. How would you rate the conference facilities (1 to 10)?
Location Guest Rooms Meals Meeting Rooms Recreational Facilities.
5. Conference location for April 1986: Maui, Hawaii
Will you attend? '
6. Topics that would be of interest to you for the next JSIS conference:
7. Comments:
8. Your primary interest in the semiconductor industry is as a:
Manufacturer User Other (PIease SpacIfy)
Name artd Company (optional)
CONSUMPTION CAPACITY
CATASTROPHE
THE SEMICONDUCTOR SAGA
Howard Bogert Robert McGeary
- 1 -© 1985 D a t a q u e s t I n c o r p o r a t e d O c t . 14 e d . - R e p r o d u c t i o n P r o h i b i t e d
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 RIdder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
AGENDA
DEMAND
SUPPLY
CAPACITY
PRICE
RECESSION
- 2 -
® 1985 D a t a q u e s t I n c o r p o r a t e d O c t . 14 e d . - R e p r o d i i c t i o n P r o h i b i t e d
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
DEMAND
CONSUMER DRIVEN
SAVINGS RATE INVESTMENT ALTERNATIVES
CREDIT RATE TAX RATE
MONEY SUPPLY INVENTORY
ADVERTISING NEEDS
- 3 -© 1985 D a t a q u e s t I n c o r p o r a t e d O c t . 14 e d . - R e p r o d u c t i o n P r o h i b i t e d
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
SEMICONDUCTOR DEMAND MEASURED BY BOOK/BILL RATIO
BOOKINGS VS. BILLINGS BY MONTH (1980-1985)
Billions of Dollars 1.1
0-2 |i n n i l II111 n i l II Mil i |n i I I I III i i | i III i i i m i | i I I I I m i l I |i III I 1980 1981 1982 1983 1984 1985
Source: DATAQUEST
- 4 -
Datapues. Incorporate? A ^ull^iaHPo*T^^.^eSsln'^go°m^^n5ni9^0 R^^dV' pbt ol^^e Ftn^'folto'k'^'^^l /W^r ' ^ - ^^bS^ / Telex 171973
SEMICONDUCTOR DEMAND
BOOK-TO-BILL RATIO
IS VERY INELASTIC
LEADS BILLINGS BY FIVE MONTHS
AVERAGE IS 1.09
HAS NO RELIABLE PREDICTOR!
- 5 -® 1985 Dataquest Incorporated Oct. 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.G. Nielsen Company /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
SEMICONDUCTOR SUPPLY--CAPITAL SPENDING
U.S. AND JAPAN CAPITAL SPENDING (1980-1984)
Billions of Dollars
Em NORTH AMERICA • JAPAN
$3,480
$3,051
$1,902
$1,373 $1,349 $1212 $1 452
OL-^
$ 0 7 5 3 $1,009 $1,058
1980 1981 1982 1983 1984
Source: DATAOUEST
- 6 -1985 Dataquest Incorporated Oct. 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
CAPITAL SPENDING
U.S. vs. JAPAN U.S. JAPAN
EQUITY LOW DEBT/EQUITY 5% SAVINGS RATE
BANKERS ADVERSARIAL MARGIN MOTIVE GROW EQUITY PROFITABILITY
COST OF CAPITAL 12% INDEPENDENT
DEBT HIGH DEBT/EQUITY 20% SAVINGS RATE
BANKERS PARTNERS CASH FLOW MOTIVE
COVER DEBT BURDEN MARKET SHARE
COST OF CAPITAL 6% CAPTURED
- 7 -© 1985 Dataquest Incorporated Oct. 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.G. Nielsen Company /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
SEMICONDUCTOR SUPPLY--FORECASTED CAPITAL SPENDING
U.S. AND JAPAN CAPITAL SPENDING (1985-1990)
Billions of Dollars
8 m NORTH AMERICA n JAPAN
S6.S78
19073 S5.400 J5,439 $5,290
S3 85 1 14 117
12.664 S2 323, , $2 291
S2.9Sg
S4.788
1985 1986 1987 1988 1989 1990
Source: DATAQUEST
- 8 -© 1985 D a t a q u e s t I n c o r p o r a t e d O c t . 14 e d . - R e p r o d u c t i o n P r o t i i b i t e d
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
CAPITAL SPENDING
FORECAST ASSUMPTIONS
DATAQUESTS FORECAST FOR SEMICONDUCTOR REVENUE CAPITAL/REVENUE STEPPED FROM 1975 TO 1985 TREND CONSTANT AFTER 1985 U.S. CAPITAL/REVENUE LAGS REVENUE SEVEN MONTHS JAPAN CAPITAL/REVENUE COINCIDENT WITH REVENUE
- 9 -© 1985 D a t a q u e s t I n c o r p o r a t e d O c t . 14 e d . - R e p r o d u c t i o n P r o h i b i t e d
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
CAPITAL SPENDING WORLDWIDE 1984-1990
Billions of Dollars
6
5
4
3
2
1
0
n U.S. • JAPAN C3 EUROPE • ROW CZl CAPTIVES 'iA
•I I V%
r. ' •
i l 'I
J r'S' '^
1 1984 1985 1986 1987 1988 1989 1990
Source: DATAQUEST
- 10 -© 1985 Dataquest Incorporated Oct. 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
INSTALLED BASE--U.S. VS. JAPAN PROPERTY. PLANT. AND EQUIPMENT
Billions of Dollars
40
30
20
10
• U.S. O JAPAN
V* I
.^A .'\
«. -- 1 ,
N ( . ,, >. ' r '
L' -
1 ^
1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990
Source: DATAOUEST
- 11 -© 1985 Dataquest Incorporated Oct. 14 ed.-Reproduction Protiibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
CAPACITY MANUFACTURING ECONOMICS
rf-
/
^
J^ r
ss: <f^
Q2Q2 Qi C
<^Z ^".
^_
S^ :\t-
A £ ^ - - -
-^
Q'^Q^ Qi
BREAKEVEN ANALYSIS
Source: DATAQUEST
- 12 -© 1985 Dataquest Incorporated Oct. 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
CAPACITY- -MANUFACTURING CARDIOGRAM
Percent
U.S. CAPACITY UTILIZATION North American Companies
00
90
80
70
60
c>n
/ \
\
\
/
/
/
^ ^ ^ ^
J
/ r
- - i
V \ 1
y f
i
J f
I
\
\
\ /
V
I
/
f
J
/
L
\ • * *
73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 Year
Source: DATAQUEST
- 13 -© 1985 D a t a q u e s t I n c o r p o r a t e d O c t . 14 e d . - R e p r o d u c t i o n P r o h i b i t e d
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
CAPACITY--MANUFACTURING KNOW-HOW JAPAN PERCENT CAPACITY
1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990
Source: DATAQUEST
- 14 -® 1985 D a t a q u e s t I n c o r p o r a t e d O c t . 14 e d . - R e p r o d u c t i o n P r o h i b i t e d
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
CAPACITY--TWO CULTURES U.S. vs. JAPANESE
CAPACITY UTILIZATION
Percent
100
90
80
70
60
50 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990
Source; DATAQUEST
i «
# ^^^^
*
*
^1
^ / \\x y o^ / \ V^ / "s \ y
X /
V
- 15 -© 1985 D a t a q u e s t I n c o r p o r a t e d O c t . 14 e d . - R e p r o d u c t i o n P r o h i b i t e d
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
COMPARISON OF CHANGES IN U.S. SEMICONDUCTOR CONSUMPTION AND U.S. GNP
PERCENT CHANGE IN SEMICONDUCTOR CONSUMPTION
+ 70% + 60%
+ 50%
+ 40%
+30%
+ 20%
+ 10%
0
-10%
-20%
-30%
^^^^^^^^US. REAL GNP m ^ ^ (Right Axis)
f— U.S. SEMICONDUCTOR V ' CONSUMPTION '
(Left Axis)
PERCENT CHANGE IN GNP
^ ( /o
+ 5%
+ 3%
+ 1%
- 1 %
_ ' a 0/
O /o
1975 1980 1985
Source: DATAQUEST
- 11 -c 1985 Dataquest Incorporated Oct. 14 ed. -Reproduct ion P roh ib i t ed
Dataquesl Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
COMPARISON OF CHANGES IN U.S. SEMICONDUCTOR CONSUMPTION
AND U.S. REAL INVESTMENT PERCENT CHANGE IN SEMICONDUCTOR CONSUMPTION + 60%
PERCENT CHANGE IN REAL INVESTMENT
+60%
+40%
+30%
+20%
+ 10%
0
-10%
-20%
-30%
U.S. INDUSTRIAL PRODUCTION (Right Axis)
+ 25%
+ 20%
+ 10%
0
-10%
J-20% 1975 1980 1985
Source: DATAQUEST
- 12 -o 1985 Dataquest Incorporated Oct. 14 ed.-Reproduct ion ProtiiDited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
COMPARISON OF CHANGES IN U.S. SEMICONDUCTOR CONSUMPTION
AND U.S. INDUSTRIAL PRODUCTION INDEX PERCENT CHANGE IN SEMICONDUCTOR CONSUMPTION + 60%
+ 50%
+ 40%
+30%
+ 20%
+ 10%
0
-10%
-20%
-30%
PERCENT CHANGE IN INDUSTRIAL PRODUCTION INDEX
+ 15%
+ 10%
+ 5%
0
-5%
-10%
1975 1980 1985
Source: DATAQUEST
- 13 -« 1985 Dataquest Incorpora ted Oct . 14 ed. -Reproduct ion Pron ib i t ed
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
COMPARISON OF U.S. SEMICONDUCTOR CONSUMPTION
AND U.S. ELECTRONIC EQUIPMENT INDEX PERCENT CHANGE IN SEMICONDUCTOR CONSUMPTION +60%
+ 60%
+40%
+ 30%
+20%
+ 10%
0
-10%
-20%
-30%
PERCENT CHANGE IN EQUIPMENT INDEX
U.S. SEMICONDUCTOR^ CONSUMPTION
(Left Axis)
+ 25%
+ 20%
+ 15%
+ 10%
1975 1980 1985
Source: DATAQUEST
- 14 -nataniiPQt Inrnrnor=.?»H ^^{^^^•J?^*^^9y^st Incorporated Oct. 14 ea . -Reproduct ion Pron ib i t ed Dataquest Incorporated, ;?SubsIdiary ofA.C. Nielsen Cofnpany /1290 Bidder Park Drive / San Jose, CA 95131 / (408^971-9000 / Telex 171973
SEMICONDUCTOR TO EQUIPMENT INPUT/OUTPUT RATIO
BEST COMPOUND FIT
I/O RATIO
1973 1975 1977 1979 1981 1983 1985
Source: DATAQUEST
- 19 -c 1985 Dataquest Incorpora tea Oct . 14 ed . -Reproduc t ion Prohi lDi ted
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
CHANGES IN SEMICONDUCTOR TO EQUIPMENT INPUT/OUTPUT RATIO
PERCENT CHANGE 30
20
10
0
- 1 0
- 2 0
- 3 0
- 4 0
— I I ' — —h—r
1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985
Source: DATAQUEST
- 20 -« 1985 Dataquest Incorpora ted Oct . 14 ed . -Reproduct ion P r o h i b i t e d
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Parl< Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
READ/WRITE MEMORY PRICE PER BIT CHANGES RELATIVE TO TREND LINE
PRICE DECLINE TO THE TREND LINE 20Z
15X
10X
5X
0
-5X
•10X
-15X
-20X
-25X
-30X
n ~1 n m nl I I \ • —
ANNUAL PRICE DECLINE 15%
20%
25%
30%
35%
40%
45%
50%
55%
60%
65% 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986
Source: DATAQUEST
- 21 -c 1985 Dataquest Incorpora ted Oct . 14 ed . -Reproduc t ion P r o h i b i t e d
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Parl< Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
RELATIONSHIP BETWEEN RELATIVE BIT PRICE AND PERCENT CAPACITY UTILIZATION
X DEVIATION FROM AVERAGE 18
10
S
0
-5
-10
-15
-20
'30
M P
I I i
i I i I
i I • I I i i ^
1972 1974
Q RELATIVE BIT PRICE
1976 1978 1980 1982
D RELATIVE CAPACITY
198* 1986
Source; DATAQUEST
•
- 22 -© 1985 Dataquest Incorpora ted Oct . 14 ed . -Reproduct ion P r o n i b i t e d
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
IMPACT OF FUNCTION PRICE CHANGES
CHANGE IN CONSUMPTION 1985 /1984
PRICE MARKET FUNCTIONAL PER IN
UNITS FUNCTION DOLLARS
READ/WRITE MEMORY (BITS) READ ONLY MEMORY (BITS) MICROPROCESSORS (BYTES) MICROCONTROLLERS (BYTES) GATE ARRAYS (GATES)
+46% +65% + 4% + 20% +81%
-63% - 5 1 % - 2 1 % -33% -35%
Source:
- 4 6 %
- 1 9 %
- 1 8 %
- 1 9 %
+ 18%
DATAQUEST
- 23 -c 1985 Dataquest Incorporated Oct. 14 ed.-Reproduction Prohibited
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INDUSTRY BOOKINGS 1974/1975 RECESSION AND 1984/1985 RECESSION
PERCENT OF PEAK
150
100
74/75 RECESSION
84/85 RECESSION
FORECAST
01 Q2Q3Q4Q1Q2Q3Q4Q1 Q2Q3Q4Q1 Q2Q3Q4Q1 Q2 03 Q4
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© 1985 Dataquest Incorporated Oct. 14 ed.-Reproaudtion Pronidited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
INDUSTRY BILLINGS 1974/1975 RECESSION AND 1984/1985 RECESSION
PERCENT OF PEAK
150
100 74/75 RECESSION
^1 FORECAST
01 02 03 04 01 02 03 04 Q1 02 Q3 Q4 Q1 02 03 04 01 02 03 Q4
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ESTIMATED QUARTERLY U.S. SEMICONDUCTOR CONSUMPTION
(Millions of Dollars)
1985
IC DISCRETE TOTAL
X CHANGE
10 DISCRETE TOTAL
X CHANGE
OUARTFR 1 $2,328
448 $2,776
-19.5X
$1,436 431
$1,867
4 . n
QUARTER 2 $2,068
430 $2,498
-10X
1986 $1,824
465 $2,289
22.6%
QUARTER 3 $1,675
403 $2,078
-16.8%
$2,184 480
$2,664
16.4X
QUARTER 4 $1,386
407 $1,793
-13.7%
$2,712 510
$3,222
20.9%
Source:
TOTAL $7,457 1.688
$9,145 -314%
$8,156 1.886
$10,042
9 6%
DATAQUEST
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STRATEGIC CONSIDERATIONS
FOCUS ON THE APPLICATION
ELIMINATE THE NEED FOR SECOND SOURCES
CORNER ENGINEERING RESOURCES
GET IN TOUCH WITH THE BILLION-TRANSISTOR ARCHITECTS
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STRATEGIC CONSIDERATIONS (Continued)
CONSIDER ALTERNATE WAFER FABRICATION STRATEGIES
BUILD NEW PLANTS WHEN EVERYBODY ELSE ISN'T
GENERATE CASH AT BUSINESS CYCLE TROUGHS
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Dataquest
Dataquest
ASICs IN JAPAN
K e i s k e Yawata C h i e f E x e c u t i v e O f f i c e r
Nihon LSI L o g i c C o r p o r a t i o n and Nihon S e m i c o n d u c t o r I n c .
Mr. Yawata i s C h i e f E x e c u t i v e O f f i c e r o f Nihon LSI L o g i c C o r p o r a t i o n and Nihon S e m i c o n d u c t o r I n c . , b o t h J a p a n e s e a f f i l i a t e s o f LSI L o g i c C o r p o r a t i o n o f M i l p i t a s , C a l i f o r n i a . P r e v i o u s l y , h e was P r e s i d e n t and C h i e f E x e c u t i v e O f f i c e r o f NEC E l e c t r o n i c s I n c . , a f t e r h a v i n g s e r v e d as G e n e r a l Manager o f NEC's i n t e r n a t i o n a l E l e c t r o n D e v i c e s D i v i s i o n . Mr. Yawata r e c e i v e d a B .E . d e g r e e i n E l e c t r i c a l Communica t ion E n g i n e e r i n g from Osaka U n i v e r s i t y and an M. E . E . d e g r e e from t h e E l e c t r i c a l E n g i n e e r i n g S c h o o l o f S y r a c u s e U n i v e r s i t y , where he a t t e n d e d g r a d u a t e s c h o o l on a F u l b r i g h t S c h o l a r s h i p .
D a t a q u e s t I n c o r p o r a t e d SEMICONDUCTOR INDUSTRY CONFERENCE
O c t o b e r 1 4 , 1 5 , and 1 6 , 1985 T u c s o n , A r i z o n a
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
B * A S I C m i l " A S I C i n J a p a n "
1. Diversification of Application
The a p p p l i c a t i o n of IC i n i t i a l l y cen te red around nain frane EDP and
telecommunication equipment. As the capacity of memory IC increased, that
applicat ion grew rapidly in EDP area. The development of microprocessors
made EDP and telecom terminals smarter. The application specific IC further
increased the use of semi-custom IC in such a way that prototype quant i t ies
of ASIC can be economically developed within a few weeks. The CAD software
or ien ted system enables designers to s imulate many c i r c u i t performance
before the c i r cu i t is fabricated in s i l i con . Many ASIC suppliers agree to
design and fabricate prototype IC's without a follow-on production contract .
I t gives researchers and designers more l a t i tude in the use of semicustom
IC's in programs such as the 5th Generation Super Speed Computer.
So ca 1 led ( ]me chat r o n i c s ^ j f h ich i s a J a p a n e s e / E n g l i s h word for the
application of e lec t ronics in machinery such as robots, pr int ing •achines,
copying machines, automobiles, video games, precision machinery and many
other conventional machines and equipment. These applications are ideally
su i t ed for ASIC because the u s e r s ' needs for a small quanti ty of custon
designed devices with d i f fe ren t s p e c i f i c a t i o n s can eas i ly be fulfilled
without a prohibitively high cost.
2. Energy Saving and Reduction in Size '
The p r o l i f e r a t i o n of IC 's made e l e c t r o n i c products shr ink in s i z e and
consume less power which perfectly matched the popular Japanese saying "Kei-
Haku-Tan-Sho" which means l ighter weight, thinner, shorter and smaller in
dimensions. Some examples of "Kei-Haku-Tan-Sho" are Walkman'''', 8 mm video
camera, LCD TV, and c r e d i t card s i ze c a l c u l a t o r , to name a few. Using
d i sc re t e IC 's instead of mechanical and electromagnetic par t s and ga te -
arrays instead of TTL lead the mechatronics to low energy consumption and
Walkman is a registered trademark of Sony Corporation.
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Kei-Haku-Tan-Sho. CMOS technology in part icular played an important role in
energy" sav ing. This slogan or theme ideally su i ted the s i t u a t i o n Japan
faced at the time of the energy c r i s i s . By pursuing Kei-Haku-Tan-Sho Japan
developed compact cars , compact d i s c s , and many other e l ec t ron ic devices
which have a high potential for gate arrays . Because of the popularization
of TIL and microprocessors designers commonly used them in the e lce t ronic
c i rcu i t s designed.
In order to further reduce weight and size TTL and microprocessor components
must be eliminated and the e n t i r e p r in ted c i r c u i t board or even several
boards be integrated in a gate array . Sophisticated CAD software exis ts to
replace these boards with gate arrays or other ASIC devices which resul ts in
Kei-Haku-Tan-Sho. There are s t i l l many opportunities for ASIC to take over
from conventional electronic c i r cu i t s .
3. Oversupply of Commodity IC
The current over capacity s i tuat ion forced most broad line IC suppliers to
sh i f t t h e i r product mix toward semi and full custom products because of
the abundance of marketing opportunit ies . The price of a 64K DRAM is as low
as 40 cents and a 256K DRAM dropped from 4 dollars ear l ie r th is year to 1.70
do l l a r s today and has become u n a t t r a c t i v e to manufacture. Although the
price of ASIC has also declined, i t is s t i l l a t a reasonable level and one
can be profi table manufacturing ASIC which invited more competition. ASIC
technology is not something which can be developed overnight. It requires
CAD software. The lack of CAD software capabil i ty drives many salesmen to
re ly on low p r i ce s because they do not have other s t r e n g h t s to use in
s e l l i n g ASIC. Hopefully buyers and purchasing managers know tha t ASIC
supp l i e r s should f i r s t be chosen for t h e i r CAD software, not for t h e i r
price, because good ASIC is designed with good CAD software. There are many
other elements which are far more important than p r i ce , i . e . , var ie ty of
packages available to encapsulate an ASIC in, performance and speed of the
ga te , sca le of in tegra t ion the CAD software may co r r ec t l y handle, turn
around time of proto-typing, f i r s t time accuracy of design and the size of
the macro-cell l ib ra ry . A price quotation based on a per-gate-pr ice is a
ridiculous way to value ASIC.
- 2 -
Dataquest Incorporated, A Subsidiary of AC. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
4. Diversification of ASIC
As CAD software becones more sophist icated and wafer processing technology
is lore refined, the density of ASIC increases and consequently the c i r c u i t
performance d ive r s i f i e s . For t h i s to happen the library of •acroce l l s and
building blocks nust be expanded. Japanese customers expect ASIC suppliers '
development suppor t system and product development c a p a b i l i t y t o be
re l iab le , i . e . , broad ASIC product l ine, strong development system and quick
turn around tiwe. Major Japanese gate array suppl iers are responding to
such expectation by building more design centers, developing higher density
arrays with new building blocks including ROM, RAM and PLA. The prevailing _ — >^
technology is 2.0 u Si gate CMOS process with double metal layer, but : /
1.5 u technology i s emerging. Demand for complex ASIC such as analog
functions, CPU and peripheral fuctions integrated with logic c i rcu i t ry is
also popular among ASIC users .
Impact of Software Development
Japan i s one nation where hardware value is viewed more important than
software value. Although the software is beginning to be valued, the level
of recognit ion is not suf f ic ient ly high. Design serv ice is often times
given away, if there is a s ignif icant volume of components. If software is
not given s u f f i c i e n t v a l u e , the software development a c t i v i t i e s a re
discouraged and copyright is not respec ted . The fac t tha t a copyright
legislation has been enacted in Japan may indicate the increase of awareness
toward software and if i t is a trend, the awareness will be reflected in the
marketing andpurchasing a c t i v i t i e s . When the software is given full ci t izen
ship, the ASIC will real ly flower in Japan.
- 3 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
(Fig. I) Application of O O S Gate Arrays tiy Sector in Japan
(1962)
(Source: Yarvs Keizai)
(Fig. 2) Application of OCS Gate Arrays by Sector in Japan
(1983)
(Source: Yano Keizai)
- 4 -
Dataquest Incorporated, A Subsidiary of A C Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
(Fig. 3) Application of OOS Gate Arrays by Sector In Japan
(1984)
(Source: Yano Kelzal)
- 5 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
(Fi£. 4) Growth of Japanese Gate Array Shipment
(in IOC Million yen)
3,000
2.600 I-
2,000
1,500
1.000
BOO
JS&.
?,a-.2
a.362
1,923
A^SZi
1,253
863
sai.
fi2 eS B4 a5(£) B6(E) 87(E} Be(E) B9(E)
Year
(Source: Yaro Kelral)
- 6 -
Dataquest Incorporated, A Subsidiary of A C Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
(Fig. 5) Growtt-. of Japaneee OOE Cat* Array Shipner.t
(in MilUor. yen;
800.OOC
150.000
100,000
50.000
S,115
62
95^311
^ 3 1 5 ^ 2LJJ^
^iilf^ 5£,4Se
j L ^
03 B4
Yea.-
17i ''"' —
145,3^1
117,^97
1 B6(E; B7(EJ ee{E', eg a)
(Surce; Yanc Kelrai;
- 7 -
Dataquest Incorporated. A Subsidiary of A C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Dataquest
THINK TANK AND SILICON CRANK: PARTNERS IN INNOVATION
Arthur J. Collmeyer Lesident
Weitek cbrporation
Dr. Collmeyer joined Weitek Corporation in 1981 as its first president. Previously, he was vice President of R&D at Calma Company, and later served as vice President/General Manager of Calma's Microelectronics Division. Prior to that time, he was employed at xerox Corporation and Motorola Inc. Dr. Collmeyer received B.S. and M.S. degrees in Electrical Engineering frcrni the University of Illinois and a Ph.D. in Electrical Engineering from Southern Methodist University.
Dataquest Incorporated SEMICONDUCTOR INDUSTRY CONFERENCE
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Dataquest
George W. Cone
Mr. Cone is a Senior Vice President ay^eattle Silicon inc.JjSSH and his career spans 27 years of experience in bbth bipolar and MOS technology. He holds seven patents that range from semiconductor processing to electrostatic printers. Before joining SSI, he was President and Chief Executive Officer of a start-up called Array Devices'inc. Mr. Cone was also one of the founders of Applied Micro Circuits Corporation, where he held the title of Vice President of Operations and Marketing. IXiring his tenure at Garrett Corporation's Micro Components Division, he was instrumental in growing sales to $50 million.
Walter P. Curtis III
Mr. Curtis is Vice President of Marketing at/^Silicon Compiler^ Inc. a t ( ^ tion^T" (SCI). He joined SCI after ten years with Nationai Semiconductor where
he was Director of Marketing for the Microprocessor Group. IXiring his tenure at National, he introduced the NS 32000 family of microprocessors and before that he held various management positions in both strategic marketing and field applications engineering. Mr. Curtis has also worked as a design engineer for Addressograph-Multigraph Corporation and was the primary developer of one of the first microprocessor-based, point-of-sale, and transaction processing systems for the banking, travel, and entertainment industries.
Douglas G. Fairbairn
Mr. Fairbairnj^ the Vice President of Design Technology at VLSI Technology Inc.<; ?VTjjS. He was a founder of VTI in 1980, and is currently responsible for all IC design tool development, marketing, and support. Before founding VTI, he was founder and publisher of VLSI Design Magazine, which was sold to CMP Publications in 1983. Mr. Fairbairn was with Xerox Palo Alto Research Center from 1972 until 1980. While at Xerox, he served as Architect Project Manager for the development of the first 16-bit portable computer and for an advanced office terminal system.
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Dataquest
Richard N. Gossan Jr.
Mr. Gossen is President and Chief Executive OfficeJ^-gf .s-j i iff9n 'frj'?''' Labs and his perspective comes from 17 years in the semiconductor industry. He spent 16 years with Texas Instruments (TI), where he participated in some of the early microprocessor development of the late 1960s. More recently, he was responsible for all MOS memory development at TI, including ttie 64K DRAM. Mr. Gossen joined Environmental Processing Inc. (EPI) in 1983 as Vice President of Business Development. At EPI he participated in the rapid growth that led to a successful initial public offering in July 1984.
Michael L. Hackwort:h
Mr. Hackworth is President and Chief Executive Officer ofyCirrus Logic Inc., and has more than 20 years of experience in the semiconHuctof' industry. As Senior Vice President at Signetics, Mr. Hackworth directed three product divisions, an MOS Technology Development Unit, the Albuquerque MOS Manufacturing Plant, and a total of more than 2,500 employees. In 14 years at Signetics, Mr, Hackworth's achievements included developing the bipolar digital marketing effort and directing and staffing the company's successful entry into MOS technology. He also has held a variety of marketing and sales positions at Motorola and Fairchild.
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Dataquest
AN INDUSTRY IN TRANSITION
Alex Au P re s iden t and CEO
V i t e l i c Corporat ion
Dr. Au i s the founder and P r e s i d e n t of ViteTi^y Corpora t ion . P rev ious ly , he was VLSI Research Manager a t Faircniid- 'Semiconductor where he managed t:he design and manufacturing of a 64K CMOS s t a t i c RAM, a 16R NMOS EEPROM, and a 64K NMOS dynamic RAM. Pr io r to t h a t , he was R&D Director a t I n t e r s i l , a Senior Design Engineer a t F a i r c h i l d Semiconductor, and a Senior Design Engineer a t Hewlet t-Packard. He holds four p a t e n t s on MOS memory c i r c u i t s . Dr. Au received a B.S. degree in E l e c t r i c a l Engineer ing from the Univers i ty of Ca l i f o rn i a a t Los Angeles, and an M.S. degree and a Ph.D. in E l e c t r i c a l Engineer ing from Stanford Un ive r s i t y .
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POTENTIAL NEXT-GENERATION
PRODUCTS
VITEUC
1 MEGABIT VIDEO RAM FOR DIGITAL TELEVISION
Frame Storage May Require One to Four Megabits per Frame
Device Will Have High Speed Logic Functions For Data Processing Before Display
2 High Speed Serial Access Ports
W VITEUC
- 9 -
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SUPER HIGH SPEED DUAL PORT SRAM
2Kx 8to 8Kx8 Required for Buffer Memory Applications
25 nS Access Time
On-Board Anti-Contention Logic
VITELIC
CONTENT ADDRESSABLE MEMORY FOR ARTIFICIAL
INTELLIGENCE APPLICATIONS
• Fast Searcii and Matcfi
• Large Memory
• Logic Capability
Compare Exclusive or Invert
W VITELIC
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SUPER LOW STANDBY POWER DRAMS FOR SEMICONDUCTOR
DISK APPLICATIONS
T High Density, Low Cost DRAM
• Serial and Random Access
• Battery Back-Up
• Special Packaging
W VITELIC
MEMORY FOR HIGH TEMPERATURE APPLICATIONS
• 150 to 200 Degree Celcius Operation
• Designed to Compensate for High Leakage and Vt Reduction at High Temperatures
w VITELIC
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SUPER RELIABLE MEMORIES
• Organized x9
• Internal Error Checking and Correction
• On-Chip Functions to Ease Addition of External Error Checking and Correction
W VITELIC
THE CHALLENGE
OF THE NEW [VIEMORY MARKET
IT VITELIC
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•"^ Dataquest
ASICs IN THE ANALOG WORLD
Alan Grebene ;?-= e:eai.dent
Hicro Linear Corporation
Dr. Grebene is the President of Micro Linear Corporation, which he founded in 1983 to serve t±e application-specific linear/digital LSI market. Previously, he founded Exar corporation of Sunnyvale, California, and until recently, served as Senior Vice president responsible for product development and marketing activities. Prior to tihat, he was Director of Product Development at Signetics Corporation. He has also held various technical and management positions with Sprague Electric and Fairchild. Dr. Grebene received an M.S.E.E. degree from tihe university of California at Berkeley and a Ph.D. from Rensselaer Polytechnic Institute.
Dataquest incorporated SEMICONDUCTOR INDUSTRY CONFERENCE
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ASIC'S IN THE
ANALOG WORLD
Alan B. Grebene
President
Micro Linear Corporation
San Jose, California
PRESENTED AT
DATAQUEST SEMICONDUCTOR INDUSTRY CONFERENCE
OCTOBER 1^-16, 1985
TUCSON, ARIZONA
1 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
SYSTEMS IN THE ANALOG WORLD
Measuring and Sens ing
Media
• Industrial Cont rols
• T e l e c o m • Speech • Robo t ics
Data Aquis i t ion
Storage and
Transmiss ion Med ia
• Compu te r Pe r iphe rals
• Displays • T ransm i t te r s • Receivers
— Data In te r f ace
•Micro Linear-
TRENDS IN THE LSI WORLD
1 - INCREASING COMPLEXITY:
Component • Subsystem • Complete System
2 - SPECIALIZED APPLICATIONS: ( Special ized A
Increasing Complexity • Reduced Versat i l i ty ( Apnl icat ions J
Specialized Applications ASIC Solutions
3 - SYSTEM-LEVEL INTEGRATION:
System —on —a—Chip • Linear/Digital M ix
m^m^m^^^^^^'^mi^^^^^^^^^^mm^^^^^mmi^ima^^^^^i^i^^^^^^Km^m^^^^^m^m^^^^^mmmm'^^^^^^^^^i
- 2 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 RiddeV Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
"Hicro Linear-
• >
IN CUSTOM LSI DESIGN
THREE CRITICAL FACTORS ARE:
• Design Time
• Design Cost
" Design Talent
•Micro Linear'
LIMITED DESIGN TALENT
• There are over 250,000 Systems Designers, worldwide
• There are less than 250 Expert Linear LSI Designers in the world
RESULT:
There is less than one Linear LSI Expert for every 1000 Systems Designers!
•Micro L i near '
- 3 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
SOLUTION
Simplify and Automate Custom LSI Design through:
• NEW DESIGN CONCEPTS Semicustom Modular Design
• NEW CAD TOOLS
This has been done successfully in Digital LSI.
It has not been done in Linear LSI.
•nicro Linear
THE PROBLEM
Traditionally Linear LSI circuits are designed at the individual transistor/resistor level.
This approach has the following limitations:
• It requires an Expert LSI Designer
" No two designs are alike
Each design has to be individually "hand—crafted"
•Ricro Linear'
- 4 -
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DIFFICULTIES OF ANALOG LSI DESIGN
• Difficult to specify • Difficult to simulate
• Difficult to interface
" Sensitive to chip layout
• Difficult to test
Therefore: Difficult to automate
•Micro Linear-
SPECTRUM OF ANALOG ASIC SOLUTIONS S I
CELL-BASED DESIGNS
HAND-CRAFTED FULL CUSTOM
•flicro Linear-
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" \
TWO CLASSES OF LINEAR AND
MIXED LINEAR/DIGITAL ASICS
1 — Those requiring unique grouping of relatively standard functions:
BEST SERVED BY SEMICUSTOM
2 — Those requiring very high performance specialized blocks:
mmm^ ^ESJ SERVED BY FULL-CUSTOn««»«»« ^
•Micro Linear'
CHARACTERISTICS OF
LINEAR BIPOLAR TECHNOLOGY
• High performance (gain, bandwidth, noise)
• Less sensitive to chip layout
• Easier off—chip interface
• High power consumption
• Poor silicon efficiency
Best suited to Array Designs
•Micro Linear-
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CHARACTERISTICS OF CMOS TECHNOLOGY
FOR ANALOG APPLICATIONS
• Poor performance (gain, bandwidth, noise) • Very sensitive to chip layout • Difficult Off—chip interface • Low power consumption • Sample / hold capability • High silicon efficiency • Can mix Linear / Digital functions
^^*^ Best suited to Standard—Cell Designs ^A'-
•Micro Linear-
r SEM
F
> (J
o _ j
• o z X
u LU h-
ICUSTOM TECHNIQUES
OR ANALOG ASICS
METHODOLOGY
cr <x. _ l o a. M (D
C/) O r o
ARRAYS
yy
X
STAND. CELLS
y
yy
>
Linear '^
- 7 -
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I
LINEAR ARRAYS
RANDOM ARRAYS o Random grouping of resistors / transistors o Suitable for component—level design o Difficult to automate
STRUCTURED ARRAYS o Combinations of mini—arrays o Can be used with cell libraries o Suitable for function—level design o Easy to automate
•nicro Linear'
T H E T I L E - A R R A Y C O N C E P T An Array of Mask -P rog rammab le "Tiles"
j u n riivin
TILE ARRAY CHIP
Mask-Programmable "Ti les"
Customized with 2-Layers of Metal Each "T i le " Mask-Programmable into a Stand-Alone Linear Function Allows Automated Design of Linear LSI at Modular Function Level
•Micro Linear•
- 8 -Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
CUSTOM LSI DESIGN Case Study
PRODUCT: Disk Drive Controller ORDER QUANTITY: 20,000 Pieces
Development Tinne: Development Cost: Unit Selling Price: Total Program Cost:
TILE-ARRAY DESIGN
10 Weeks $ 12,000.00 $ 6.00
$132,000.00
CONVENTIONAL
FULL-CUSTOn
60 Weeks
$120, 000. 00
$ 5.00
$220, 000. 00
Advantages: • 90% Development Cost Savings
• 83% Reduction in Development Time
•Hicro Linear'
/ — X
A PARTIAL LIST OF LINEAR CELLS IN THE SC~2000 FAMILY
• Gain Cells (5 Cells)
• Operational Amplifiers (12 Cells)
• Buffer Amplifiers (3 Cells)
• Comparators (2 Cells)
• Sample/Hold (1 Cell)
• Voltage Reference (1 Cell)
• Bias Generators (3 Cells)
• Oscillators (2 Celts)
• Phase—Locked Loops (2 Cells)
• Multiplexers and Modulators
(5 Cells)
• Switched-Capacitor Filters (10 Cells)
• Continuous-Time Filters (2 Cells)
• Analog/Digital Converters (3 Cells)
• Digital/Analog Converters (3 Cells)
•^Hicro Linear-
- 9 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
ANALOG CAD/CAE TOOLS
SOFTWARE
• Device Modeling
• Circuit Simulation
• Circuit Synthesis
• Parameter Extractioii
• Cell Compilation
• Auto Place/Route
HARDWARE
Personal Computer Based
Workstation Based
Mainframe Based
•Kicro Linear'
r TWO KEY FACTORS IN
ANALOG DESIGN AUTOMATION
* Device Modeling
• Circuit Simulation
«,...«»« Particularly Critical in MOS Analog
'Micro Linear -" "^
- 10 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Level I User-oriented (Linear-CAD I)
A HIERARCHY OF LINEAR LSI CAD TOOLS
Level II User-
Interactive
Level III Internal Host
Computer System
•Micro Linear•
TOTAL AVAILABLE MARKET FOR APPLICATION-SPECIFIC
LINEAR AND COMBINED LINEAR / DIGITAL LSI
1600
^ 1200
o I 800
^ 400 </>
0
m LINEAR/DIGITAL LINEAR
780 S9Q
440
IQBS 1986 1087
SOURCES. EDN. OATAOUEST. L C . E .
98D
1988
12QD
1989
•nicro Line*!'
- 11 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-900(3 / Telex 171973
TOTAL MARKET FOR APPLICATION-SPECIFIC
LINEAR AND MIXED LINEAR / DIGITAL LSI
e/j
2 g !J _j
</>
1600
12001-
800f-
400 1-
1985 1986 1987
SOURCES: OATAOOEST, GNOSTIC CONCEPTS. I.C. E.
1968 1989
•nicro Linear-
TOTAL MARKET FOR SEMICUSTOM
LINEAR AND MIXED LINEAR / DIGITAL LSI
1000
^ 750
o _l 500
J, 250 </>
^CELL-BASED DESIGNS ARRAY DESIGNS
240 350
140
1985 1986 1987
SOURCES. DATAQUEST, GNOSTIC CONCEPTS, I.C. E.
500
1988
700
I 198Q
•nicro Linear'
- 12 -Dataquest Incorporated, A Subsidiary of A C . Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
"N LINEAR AND MIXED LINEAR/DIGITAL
ASIC MARKET
F u l l Custom
Arrays
1985 = $290 Million
standard Cells
Full Custom
Arrays
1990 = $1,100 Million
•nicro Linear'
PRIMARY END-USER MARKETS FOR
LINEAR AND MIXED LINEAR / DIGITAL ASICS
• Telecommunications
• Computer Peripherals
• Industrial Controls & Instrumentation
" Military
v •Hicro Linear'
- 13 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
~ \
TRENDS IN ANALOG ASICS
INCREASING SEMICUSTOM CAPABILITY
o Structured Linear Arrays
o System-level mixed Linear/Digital ASICS using CMOS Standard Cells
INCREASING USER INVOLVEMENT IN DESIGN PROCESS
PROGRAMMABLE ANALOG ASIC'S
(Software—controlled Analog VLSI)
•Micro Linear'
SOFTWARE-CONTROLLED ANALOG ASICS
[
o o o o o o
111 n - • • t ANALOG IMWTS/OUTPUTS
ANALOG FUNCTIONS
MEMORY MICROCONTROLLER
DIGITAL FUNCTIONS AND INTERFACE
I t i l i . . . ! "ISITAl T T t t T t IHPUTS/0 IHPUTS/OUTPUTS
MICROPROCESSOR BUSS
•Micro Linear'
- 14 -Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Dataquest
STRATEGIES FOR EFFECTIVE SILICON USE
Eli Harari President
WaferScale Integration, Inc.
Mr. Harari is the President and Chief Executive Officer of WaferScale Integration, Inc., Fremont, California. Previously, he was Vice President of Operations/Technology at Synertek, Inc.; Manager of Technology Development at Intel Corporation; and Manager of the Microelectronics Research Center at Hughes Aircraft Company. Mr. Harari invented the first commercial CMOS EEPROM and the CMOS NOVRAM. In addition, he holds more than ten U.S. and foreign patents in EEPROM, EPROM, DRAM, SRAM, serial memories, imagers, and semiconductor processing techniques. Mr. Harari received a B.Sc. degree in Physics with honors from Manchester University in England and a Ph.D. degree in Solid State Sciences from Princeton university.
Dataquest Incorporated SEMICONDUCTOR INDUSTRY CONFERENCE
October 14, 15, and 16, 1985 Tucson, Arizona
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
y/ciPGfi/taLG
STRATEGIES FOR EFFECTIVE SILICON USE
y/ai'Gri/tciL^
• Effective Silicon Use Involves Unique Devices for Specialized Functions
• Effective Silicon Use Requires a Systems Perspective
• Tools Are Now Available to Enable the System Designer to Create Unique Devices
• Successful ASIC Companies Will Become the Natural Extension of the System Designer
SynFeri/fenLE
MARKET OPPORTUNITY WORLD STANOAnO
C(1_L tlAR«ET
I 1W5
WORLD STANOARO . CELL MARKET
IC . J19.37 8 (100H) Standard CcII $ Q.2S B (1.3H)
$51.54 B (100H) t 3.94 a (7.6H)
Standard Cell Market Will Grow 1546% in 5 Years
towm: D—qmi . Jutm. l«i
- 1 -
Dataquest Incorporated. A Subsidiary of A C Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
y/ai^fBn/taLfz ASIC's Satisfy a Growing Need for System Companies: • Reduced System Cost
—Reduced Components, Boards, Power Supplies, Cooling
—Lower Assembly, Test, Bum-in Costs
• Enhanced Product Competitiveness —Higher Performance and Reliability —Smaller Size —Proprietary Design Protection —Feature Differentiation
INCREASED PROFITABILITY
y/aFeti/taLe
SEMI-CUSTOM EMPHASIS
MOO MTECNATKMt Nceos
Tt7i * kHcnopnoc£S^Ofi miwxiucED
Hugh Co«npuwr Ca«n
S^rtH^Iii i i i ie^siion
Off Pnntvd CMttitt
• CtiiMBT Silicon f i w i f Cofnouwrs
3 D*ntJT>
BASIC BARRIERS ARE FALLING
• Process Technology — CMOS VLSI Here Now, WSI Within Sight
• Manufacturing Yields — Automation Allowing Very Affordable Cost Per Gate, Very Reliable Silicon
• Workstations — Powerful, Affordable, Proliferating
- 2 -
Dataquest incorporated, A Subsidiary of A C. Nielsen Company / 1290 Ridder Park Drive / San Jose, GA 95131 / (408) 971-9000 / Telex 171973
^aFEffi/caLE
BASIC BARRIERS ARE FALLING • Design Software —
• Time to Market —
• Remaining Barrier —
Correct Design By Construction, Good Simulators and Place/Route, Expanding Large Block Libraries
8-16 Weeks Now Normal for VLSI Devices
Universal Embrace By System Designers
Tools Are Now in Place for Effective Use of Silicon
WHY THE NEED FOR A SYSTEM/SEMICONDUCTOR
PARTNERSHIP? • Systems Must Integrate on Silicon to Survive
• Capital Intensity of Semiconductor Facilities Must Be Diffused Among Users
• System and Semiconductor Complexity Require Scarce Complementing Skills
y/c\P5rJtaLe
TODAY'S STRATEGIC ALLIANCE
y/gp^rJcaLs
- 3 -Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
SynFEc/taLE EXAMPLE OF AN EFFECTIVE
USE OF SILICON • "System-on-a-ChIp" Solution
WcnoCOQE uoueNcen
Bit Slice Architecture System
CONTnOL STOfK
— < ^ — ^
COMI^ItlOh coot CIBC Ul T l'V-'^''~~~^> -.
PIPELINE | ^ . . M ( 1 1 S T E H
• I T t U C E PnOCESSOnS M U L T I F L I E K
II
• "System-on-a-ChIp" Solution
Bit Slice Architecture System
uicno£:onE SEQJENCf n COMTROL ST04)E
COXOLriDM C 3 0 e C IftCUIT AT .^'•^'"^-•-i
PI*ELINE j ^ . .HECISTEB
••<? / " " ^ ^ ^ ^ ' j »IT SLICE P B 0 « 5 S ( » S UULTIPLIEB
EFFECTIVE USE OF SILICON
twrt •rr-suce n«ocE$*o«
y/gpeti/taLe
- 4 -
Dataquest Incorporated, A Subsid iary of A C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
y/aptsfi/toLfs EFFECTIVE USE OF SILICON
^
wsrr •T^Lice pnocEssofl
n
(
(//qperJcaLe
EFFECTIVE USE OF SILICON
32 WT MT-SUCE PflOCESSOR
^
y/aperi/taLe
• "System-on-a-Chip" Solution
Bit Slice Architecture System
MICBOCOOE SEQUENCER
. ^ ^ ^ ^ ^
CONDITION CODE
^ 1^
i0
2> i^
?-^ - ^
COHTHOL STO«E
. ^'^Ji C^ ^~~^^f^ PIPELINE
(^.^^HCOISrEO
^^ 1 ^ ^ 1 SIT S L I « MOCISSOBS
/ ^ .--Oa < ^ < ^ ^*T ^* i
M T * M
•ULTIPLIEft
^
r
- 5 -Dataquest Incorporated, A Subsidiary of A C. Nielsen Connpany / 1290 RIdder Park Drive / San Jose. CA 95131 / (408) 971-9000 / Telex 171973
S^aFEfi/caLe EFFECTIVE USE OF SILICON
e :
32 BIT BIT-SLICE PROCESSOR l iULrmjEA
• "System-on-a-ChIp" Solution
Bit Slice Architecture System
HICROCODC SEQUENCER
COMOiTion CODE CI HC Ul T RV i^''""--^..
- < ^
CONTROL STOne
PIPELINE i ^ ^ E S I S T E H
-^ I SIT SLICE FROCESSOnS UUl.TIPl.IEn
EFFECTIVE USE OF SILICON
'
KB IT BIT-SLICE PROCESSOR
'
nPELJfC RECISTEfl
MULTtPLIER
y/aPGc/taLe
- 6 -
Dataquest Incorporated, A Subsidiary of A C Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
S^nFEc/caLS • "System-on-a-Chip" Solution
Bit Slice Architecture System
wicnocooE SEQUENCER CONTROL STORE
P»EUME ) ^ . ^ C G I S T E B
COWDITtON C O M ^_^^ CIRC Ul T H I r / ^ ^ ^
MT SLICE PROCESSORS
EFFECTIVE USE OF SILICON
32 BIT BIT-SLICE PROCESSOR
n £PRoM CONTBOL STORE
PIPELINE REGISTER
MULTIPLIER
y/c\PGrJcaLG
• "System-on-a-ChJp" Solution
Bit Slice Architecture System
HICROCODE SEauEHCER
CONDI TtON CODE , C I R C U I T R Y ^ ' • ' ^ - 3 , .
'<y
CONTROL STORE
l^, .R€CJSTER
BIT SLiCt PROCESSORS KUlTIPLlER
- 7 -Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose. CA 95131 / (408) 971-9000 / Telex 171973
SynFCfi/caLE EFFECTIVE USE OF SILICON
t 1
DHCnoCODC CEOISNCER
32 BIT BIT-SLICE PROCESSOR
EPnOM CONTROL STORE
PIPELINE REGISTER
MULTIPLIER
y/aperJcaLe
• "System-on-a-Chip" Solution
Bit Slice Architecture System
mcxoeooE SeOUEftCEB
coNOiriON coos ciRcuiTtrr ciRCUi Ttrr ^^^~'~^ ^
- ^
COtTTtOL STOflE
< ^ ^ ^ . (^-rt fOJsrEH
•IT SLICE PIIOCE5SORS MULTIPLIER
^ ' " ^ - ^
EFFECTIVE USE OF SILICON f
MICROCODE SEQUENCER
CONOmON CODE cjBcumw
32 BIT BIT-SLICE PROCESSOR
1 r'
EPROM CONTROL STORE
PIPELINE REGISTER
MULTIPLIER
SynPEC^nLE
- 8 -Dataquest Incorporated, A Subsid iary of A C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
SC^aFEn/caLE EFFECTIVE USE OF SILICON
D«U In
Data In
Data In .
Data Out .
HICItOCOOE SEQUENCER
CONDITION CODE
ancuiTRY
12 BIT BirSLICE
PROCESSOR
EPROM CONTROL
STORE
nPELINE REGISTER
Graphics Processor Engine • CMOS •Syalam-oiva-Chlp" • Si IMIPS • Prototypes in 14 Waeks Attar Simulation Sign-off
EFFECTIVE USE OF SILICON
Graphics Processor Engine • System Architect — Definition • SiIicon Integrator — Creation
S^nFEfL/cnLE
EFFECTIVE USE OF SILICON • HIGH PERFORMANCE SEMI-CUSTOM
APPLICATIONS: CAD/CAE Workstations High ResoIution Graphics Controllers Telecommunications Speech Processing Image Processing Graphics Engine Mini-Computers High Speed Industrial Control Local Area Network Controllers
Synpec/cnLE
- 9 -Dataquest Incorpora ted, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose , CA 95131 / (408) 971 -9000 / Telex 171973
(^QFfsC/tnLfz
EFFECTIVE USE OF SILICON REQUIRES: • Cooperative Business AIIiances
• Systems Definition by Systems Architects
• Efficient High LeveI Design Tools
• l.everaged Manufacturing Sources
• Latest SiIicon Technology
y/c\Pfst:/tc\Lfs
- 10 -Dataquest Incorporated, A Subsidiary of A C Nielsen Company / 1290 Bidder Park Drive / San Jose, GA 95131 / (408) 971-9000 / Telex 171973
Dataquest
AUTOMATION OF LSI MANUFACTURING
Hiroyoshi Komiya Deputy Managerr Saijo Factory
Mitsubishi Electric Corporation
Dr. Komiya is a Deputy Manager of Mitsubishi Electric Corporation's Saijo Factory, and has general responsibilities for production and technology at the Saijo Factory. Before being transferred to the Saijo Factory, he was a Manager of the Equipment Engineering Department at Mitsubishi's Kitaitami Works, where he managed the design, development, and construction of production lines for the Saijo Factory. Before that, he worked as a Deputy Manager of the Memory and Microprocessor Department at the Kitaitami Works, as a member of the senior research staff for wafer processing technology at the cooperative laboratories of VLSI Research Association, and as a senior research staff member at Mitsubishi's Central Research Laboratories. Dr. Romiya holds a B.S. degree in Physics and a Dr. Science degree from Kyushu University.
Dataquest Incorporated SEMICONDUCTOR EQUIPMENT AND MATERIALS INDUSTRY SERVICE CONFERENCE
October 14-16, 1985 Tucson, Arizona
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, GA 95131 / (408) 971-9000 / Telex 171973
DR. HIROYOSHI KOMIYA
DEPUTY MANAGER, SAIJO FACTORY
MITSUBISHI ELECTRIC CORPORATION
AUTOMATION OF LSI MANUFACTURING
INTRODUCTION
AUTOMATION OF LSI MANUFACTURING HAS MADE PROGRESS IN ORDER OF THE
AUTOMATION OF INDIVIDUAL PRODUCTION EQUIPMENT, THE DEVELOPMENT AND USE OF
THE PRODUCTION MANAGEMENT SYSTEM, AND THE INTEGRATION OF MULTIPLE
EQUIPMENTS. RECENTLY, BIG EFFORTS ARE BEING MADE FOR MATERIALIZING A
TOTALLY AUTOMATED MANUFACTURING PLANT,
THE AUTOMATED MANUFACTURING LINE OFFERS SEVERAL BENEFITS:
1. THE NUMBER OF WORKERS IS DECREASED.
2. THE YIELD AND QUALITY OF LSI CHIPS BECOME HIGHER AND STABLE
BECAUSE THE HUMAN FACTORS, NAMELY, CONTAMINATION FROM PERSONNEL,
MIS-OPERATION DUE TO PERSONNEL, ETC., ARE ELIMINATED.
3. IT SIMPLIFIES THE VERY COMPLICATED PRODUCTION MANAGEMENT IN THE
MANUFACTURING LINE FOR LARGE VARIETY, SMALL VOLUME PRODUCTS LIKE
SEMI-CUSTOM LSI.
4. THE LEAD TIME BECOMES SHORTER AND THE WORK-IN-PROCESS DECREASES,
ETC.
-1-
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
ON THE OTHER HAND, THERE ARE SOME DEMERITS:
1. THE INVESTMENT IS INCREASED BECAUSE OF THE CONTROL SYSTEM AND
TRANSPORT SYSTEM ADDED.
2. IT BECOMES MORE DIFFICULT TO CHANGE THE LINE STRUCTURE WHEN THE
PRODUCTS ARE BEING CHANGED.
3. THE SPACE FACTOR AND THE WORKING RATES OF EQUIPMENT TEND TO
DECREASE, ETC.
THIS PAPER WILL DISCUSS SEVERAL PROBLEMS ABOUT THE AUTOMATION OF THE LSI
MANUFACTURING LINE.
- 2 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
STRUCTURE OF THE MANUFACTURING LINE
IN THE WAFER PROCESSING LINE, IT HAS BEEN QUITE COMMON THAT ONE EQUIPMENT
IS USED FOR SEVERAL PROCESS STEPS SINCE WAFERS PASS MANY TIMES THROUGH
SIMILAR PROCESSES AND EQUIPMENT HAS THROUGHPUTS MUCH DIFFERENT FROM EACH
OTHER. THE STRUCTURE OF THE AUTOMATED MANUFACTURING LINE, THEREFORE, IS
MORE COMPLICATED THAN THAT OF THE LINEAR STRUCTURE, IN WHICH WORK PASSES
ONLY ONCE THROUGH EACH PIECE OF EQUIPMENT,
THE OLDEST AND MOST POPULAR STRUCTURE FOR THE WAFER PROCESSING LINE IS THE
JOB SHOP STRUCTURE, IN WHICH THE SAME KIND OF EQUIPMENT IS GATHERED AND
PLACED IN THE SAME FAB AREA. FIGURE 1 SHOWS THE CONCEPT OF THIS
STRUCTURE. SUGIYAMA OF NEC ADVANCED THIS CONCEPT AND HAS PROPOSED THE
PROCESS CELL STRUCTURE.! THIS TYPE OF STRUCTURE MIGHT HAVE THE HIGHEST
FLEXIBILITY FOR CHANGE IN THE VARIETY AND VOLUME OF PRODUCTS, AND TO A
MODIFICATION OF THE LINE AND THE HIGHEST RATE OF OPERATION OF INDIVIDUAL
EQUIPMENT. ON THE OTHER HAND, IT REQUIRES THE INTER- AND INTRA-SHOP
TRANSPORT SYSTEMS TO" HAVE VERY HIGH EFFICIENCIES AND QUITE COMPLICATED
CONTROLS FOR THE TRANSPORT SYSTEM AND THE EQUIPMENT.
THE OPPOSITE EXTREME OF THE JOB SHOP STRUCTURE IS THE LINEAR STRUCTURE AS
STATED BEFORE. IN THIS STRUCTURE, THE TRANSPORT SYSTEM, THE CONTROL FOR
THE TRANSPORT SYSTEM, AND THE EQUIPMENT ARE GREATLY SIMPLIFIED. THE
FLEXIBILITY AND THE RATE OF OPERATION OF INDIVIDUAL EQUIPMENT, HOWEVER,
WILL BE EXTREMELY LOW, AND A PRACTICAL LINE WILL BE EXPECTED FOR THE MASS
PRODUCTION.
-3-
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
AS AN INTERMEDIATE STRUCTURE BETWEEN THE TWO TYPES OF STRUCTURES DESCRIBED
ABOVE, THERE IS THE BLOCK STRUCTURE, IN WHICH A LONG TRAIN OF PROCESS
STEPS IS DIVIDED INTO SEVERAL BLOCKS. THE BLOCKS ARE CONNECTED WITH EACH
OTHER INTO THE LINEAR STRUCTURE, AND INSIDE EACH BLOCK, THE LINE IS
CONSTRUCTED WITH THE JOB SHOP STRUCTURE. FIGURE 2 SHOWS THE CONCEPT OF
THE BLOCK STRUCTURE, WHICH, IN SHORT, IS AN OPTIMUM POINT OF COMPROMISE
BETWEEN THE JOB SHOP AND LINEAR STRUCTURES. THAT IS, IF THE NUMBER OF
BLOCKS INCREASES, THE BLOCK STRUCTURE WILL COME NEAR THE LINEAR STRUCTURE,
AND IF IT DECREASES, THE STRUCTURE WILL COME NEAR THE JOB SHOP STRUCTURE.
IT SHOULD BE DECIDED, DEPENDING ON THE CHARACTERISTICS OF THE PRODUCTION
LINE, IN WHAT WAY AND INTO HOW MANY BLOCKS THE PROCESS IS TO BE DIVIDED.
IN THE WAFER TESTING, ASSEMBLY, AND FINAL TESTING PROCESSES, THE LINES ARE
PRINCIPALLY CONSTRUCTED WITH THE LINEAR STRUCTURE. SOME PARTS OF THE LINE
CONSIST OF MULTI-PASSAGE FOR BALANCING THE THROUGHPUT AMONG PROCESS STEPS
OR FOR PROCESSING A VARIETY OF PRODUCTS. AFTER THE WAFER TESTING PROCESS
IS COMPLETED, THE UNIT OF WORK CHANGES FROM A WAFER TO A CHIP OR DEVICE,
AND THE WORK HAS NOT BEEN STANDARDIZED. THE LINE STRUCTURE, THEREFORE,
SHOULD BE DECIDED BY THE PRODUCTS OR PACKAGES TO BE MANUFACTURED AND BY
THEIR QUANTITIES.
-4 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
J[_ DIFFUSION/IMPLANTATION/ DEPOSITION SHOP
£7
• I i I ; I ! I i
TH '-n-' 4f ' "-rr' Sr" W
[^^^#p^ _ M I
INTRA-SHOP TRANSPORT SYSTEM
MA-
; 1 1
CHEMICAL SHOP L =
• INTER-SHOP TRANSPORT SYSTEM
.-COLLECTION/DELIVERY STATION
£s^s>&=s= i : : CTT^^X^^M
LITHOGRAPHY SHOP
•EQUIPMENT
FIG 1. CONCEPT OF JOB SHOP STRUCTURE
BLOCK 1
l&
LITHOGRAPHY ZONE
I I 1 1 I I I I I I I ' '-n-' '-^•J l - r . - l
J-:n:,JX-3uy
y. TRANSPORT SYSTEM
V
EQUIPMENT-
ETCHING ZONE DIFFUSION ZONE
BLOCK N
FIG 2. CONCEPT OF BLOCK STRUCTURE
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
I CPU I
CPU I CPU (
CPU in
CPU
12) CPU
(21
^^77? !> ^ > it
CPU
(2)
z: CPU 12)
I TO EQUIPMENTS!
I (J u T5~vr
1ST FLOOR
yWTTTT I TOEQUIFMEM"Tn
CPU
( I )
L
O t) (J-0 I
2ND FLOOR
FACTORY LEVEL
1ST LEVEL
COMPUTER COMMUNICATION LOOP
2ND LEVEL (l)AGV CONTROL (2) EQUIPMENT CONTROL
COMPUTER-£QUIPMET~ COMMUNICATION
EQUIPMENT LEVEL
FIG 3. HIERARCHICAL ARCHITECTURE OF CONTROL SYSTEM
• D
MOVING ROBOT
•
EQUIPMENTS
@
-C3;
1
1 ? ^ -
BRANCH STATION
/ -dJ
AGV ^...^^^^
- — CD- MAIN STREET
D I 1
CZ]
• nO
?g n n
^
FIG 4. EXAMPLE OF LAYOUT OF WAFER PROCESS LINE
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
THE CONTROL SYSTEM
THE CONTROL SYSTEM MUST ADDRESS THE FOLLOWING INFORMATION:
1. PROCESS INFORMATION: PROCESS PARAMETERS AND OPERATION OF EQUIPMENT.
2. QUALIFY INFORMATION: COLLECTION, ANALYSIS, AND MANAGEMENT OF THE TEST
PLUS INSPECTION DATA RELATING TO THE DEVICE QUALITY.
3. WORK FLOW INFORMATION: CONTROL AND TRACK OF WORK-IN-PROCESS.
4. EQUIPMENT INFORMATION: WARNING OF EQUIPMENT NOT IN PROPER CONDITION
PLUS COLLECTION, ANALYSIS, AND MANAGEMENT OF DATA RELATING TO THE
STATUS OF EQUIPMENT.
5. MATERIAL INFORMATION: CONTROL OF PURCHASE AND SUPPLY OF DIRECT AND
INDIRECT MATERIALS.
THE FUNDAMENTAL DATA BASE, INCLUDING BASIC PARAMETERS AND PROCESS FLOWS
THAT BECOME THE BASE OF INFORMATION DESCRIBED ABOVE, MUST BE INPUT
MANUALLY BEFORE THE SYSTEM STARTS TO WORK. THE ORDER OF WORK TO BE INPUT
AND THE PRIORITY THAT IS BASED ON THE SALES ORDER PLUS MARKETING
INFORMATION IS ALSO INPUT MANUALLY. THE DATA OR INFORMATION OTHER THAN
THAT DESCRIBED ABOVE IS DESIRABLE TO BE PROCESSED OR TREATED AUTOMATICALLY
WITHIN THE SYSTEM.
- 5 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
FIGURE 3 SHOWS AN EXAMPLE OF THE CONTROL SYSTEM ARCHITECTURE THAT HAS A
HIERARCHAL STRUCTURE OF FOUR HALVES. THE FACTORY LEVEL PROCESSOR IS IN
CHARGE OF MANAGING AND PROCESSING THE DATA FOR THE FACTORY MANAGEMENT
LEVEL. THE PROCESSORS CONTROLLING THE PRODUCTION LINE BY THE REAL-TIME
BASE ARE THE FIRST AND SECOND LEVEL ONES, AND CONTROLLERS OF INDIVIDUAL
EQUIPMENT ARE THE LOWEST LEVEL PROCESSORS. THE INTERFACE BETWEEN THE
SECOND LEVEL PROCESSORS AND THOSE OF INDIVIDUAL EQUIPMENT IS BASED ON
FIGURE 1.
THE BASIC CONCEPT OF THE CONTROL SYSTEM IS NOT DIFFERENT FROM THOSE FOR
MANUFACTURING LINES IN OTHER INDUSTRIES, AS IS UNDERSTOOD FROM THE
ARCHITECTURE SHOWN IN FIGURE 3. IN THE CASE OF THE LSI MANUFACTURING
LINE, HOWEVER, THE FOLLOWING SPECIAL FEATURES EXIST:
1. THE LINE CONSISTS OF PRODUCTION EQUIPMENT THAT IS SUPPLIED BY A LARGE
VARIETY OF EQUIPMENT VENDORS.
2. THE LINE DOES NOT HAVE THE LINEAR STRUCTURE, ESPECIALLY IN WAFER
FABRICATION.
3. BOTH THE RELIABILITY OF EQUIPMENT AND THE PROCESS CAPABILITY ARE
FAIRLY LOW.
4. THE PERIOD FOR RETURN-OF-INVESTMENT IS VERY SHORT, AND EVEN IN SUCH A
SHORT PERIOD, THE EQUIPMENT AND PROCESS ARE OFTEN CHANGED.
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Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
THEREFORE, THE FOLLOWING SHOULD BE CONSIDERED WHEN THE CONTROL SYSTEM IS
DESIGNED AND CONSTRUCTED:
1. THE SYSTEM DEBUGGING THE ACTUAL PRODUCTION LINE IS TO BE DONE
EFFICIENTLY IN A SHORT PERIOD.
2. COMMUNICATION AND MECHANICAL INTERFACES BETWEEN EQUIPMENT AND OTHER
SYSTEMS MUST BE STANDARDIZED.
3. TROUBLE IN ONE PIECE OF EQUIPMENT SHOULD AFFECT AS NARROW OF A REGION
AS POSSIBLE, AND THE EQUIPMENT CAN EASILY RETURN TO CONTROL THE SYSTEM
IN A SHORT PERIOD AFTER THE RECOVERY.
4. UNUSUAL TREATMENTS, SUCH AS REPROCESSING AND EXPERIMENTAL FLOW, CAN BE
EXECUTED EASILY.
5. THE SYSTEM MUST BE FLEXIBLE TO CHANGES IN PROCESS FLOW, PARAMETERS,
MODIFICATION AND REARRANGEMENT OF THE LINE.
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Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
TRANSP9RT SYSTEM AND LAYOUT
VARIOUS APPROACHES TO THE INTER-EQUIPMENT TRANSPORT SYSTEM HAVE BEEN
PROPOSED.2 OF THOSE, A SINGLE WAFER TRANSPORT OVER A FIXED TRACK IS
CONSIDERED TO BE DIFFICULT TO USE IN THE MASS-PRODUCTION LINE, THEREFORE,
A BATCH TRANSPORT WILL BE EMPLOYED BY USING CASSETTES OR MAGAZINE.
THERE ARE MANY TYPES OF TRANSPORT MACHINES: CONVEYERS, AUTOMATED GUIDED
VEHICLES, MOVING ROBOTS, CEILING MONORAILS, ETC. WHEN WE CHOOSE THE
TRANSPORT SYSTEM, WE MUST TAKE INTO ACCOUNT THE DUST GENERATION, TRANSPORT
CAPACITY, WEIGHT AND SIZE OF WORK TO BE TRANSPORTED, POSITION ACCURACY
REQUIRED AT TRANSFER POINTS, FLEXIBILITY TO THE CHANGE OF ROUTES AND
TRANSFER POINTS, SAFETY, METHOD OF COMMUNICATION, LAYOUT OF THE LINE, ETC.
A TRANSPORT SYSTEM CONSISTS OF A COMBINATION OF TRANSPORT MACHINES AS
DESCRIBED ABOVE. TEMPORARY STORAGE SITUATIONS ARE NECESSARY FOR ADJUSTING
WORK-IN-PROCESS, BRANCH STATIONS FOR TRANSFERRING WORK BETWEEN TWO
TRANSPORT MACHINES, STATIONS FOR REARRANGEMENT OF BATCHES, NUMBER READERS
FOR RECOGNIZING LOTS FOR WORK, AND THE CONTROL SYSTEM. BEFORE THE DESIGN
OF THE INTER-EQUIPMENT TRANSPORT SYSTEM IS COMPLETED, THE TRANSPORT
SIMULATION MUST BE SUFFICIENTLY PERFORMED, INCLUDING THE CASE OF UNUSUAL
TREATMENTS DUE TO THE SYSTEM OR EQUIPMENT BREAKING DOWN OR PROCESS
TROUBLE.
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Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
ONCE THE STRUCTURE OF THE LINE IS DECIDED, THE LAYOUT CAN BE DESIGNED IN
BASICALLY THE SAME WAY AS FOR THE CONVENTIONAL LINE, EXCEPT FOR THE
INTER-EQUIPMENT TRANSPORT SYSTEM BEING ADDED. THEREFORE, SPACE FOR THE
INTER-EQUIPMENT TRANSPORT SYSTEM MUST BE PROVIDED, TRANSFER OF WORK
BETWEEN EQUIPMENT AND THE TRANSPORT SYSTEM MUST BE PROVIDED, AND TRANSFER
OF WORK BETWEEN EQUIPMENT AND THE TRANSPORT SYSTEM SHOULD BE WELL
EXAMINED. FOLLOWING ARE SOME REQUIREMENTS TO BE TAKEN INTO ACCOUNT WHEN A
LAYOUT IS DESIGNED FOR THE AUTOMATED LSI MANUFACTURING LINE:
1. THE NUMBER OF CROSSINGS BETWEEN TWO TRANSPORT CHANNELS IS AS FEW
AS POSSIBLE.
2. MANUAL OPERATION IS POSSIBLE LOCALLY WHEN ANY PART OF THE CONTROL
SYSTEM BREAKS DOWN.
3. REMODELING THE TRANSPORT SYSTEM MUST BE LIMITED TO A PART AS
SMALL AS THAT OF MANUFACTURING EQUIPMENT WHEN THE LINE IS
REMODELED.
FIGURE 4 SHOWS AN EXAMPLE OF A LAYOUT OF THE WAFER PROCESSING LINE. THERE
IS A "MAIN STREET" AT THE CENTER OF THE LINE ON WHICH AUTOMATIC GUIDED
VEHICLES (AGV) RUN. THE AGV CARRIES WAFER CASSETTES BETWEEN ANY TWO
BRANCH STATIONS THAT ARE UNDER CONTROL OF A SECOND LEVEL CPU AS INDICATED
IN FIGURE 3, AND TRANSFERS THEM TO OR FROM THE BRANCH STATION. FROM A
BRA.NCH STATION, A MOVING ROBOT RUNS PERPENDICULAR TO THE "MAIN STREET",
AND CARRIES WAFER CASSETTES AMONG THE BRANCH STATION AND LOADERS/UNLOADERS
OF EQUIPMENT ALONG THE ROUTE OF THE ROBOT.
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Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
EQUIPMENT
AMONG TECHNOLOGIES FOR LSI FABRICATION, ONE WHICH IS DIFFICULT TO BE
AUTOMATED IS VISUAL INSPECTION. PARTICULARLY IN RECENT YEARS,
REQUIREMENTS ABOUT THE SIZE AND TYPE OF DEFECT TO BE DETECTED HAVE BECOME
EXTREMELY SEVERE, AND THOSE ABOUT THE QUALITY AND RELIABILITY OF DEVICES
DID, ALSO. THEREFORE, WE WILL HAVE TO GIVE UP THE AUTOMATION OF VISUAL
INSPECTION FOR NOW, EXCEPT WITH VERY SIMPLE CASES. THAT IS, THE VISUAL
INSPECTION SYSTEM, IN WHICH AN INSPECTION AND A JUDGEMENT ARE DONE
MANUALLY, AND THE INCIDENTAL TASKS ARE ALL AUTOMATED, WILL THEN BE A
PRACTICAL SOLUTION. THE REMOTE VISUAL INSPECTION SYSTEM, HAVING A HIGH
RESOLUTION ITV, HAS ALSO BEEN DEVELOPED FOR KEEPING WORKERS AWAY FROM
WAFERS OR CHIPS.
MOST EQUIPMENT FOR WAFER FABRICATION AND WAFER TESTING HAS ALREADY BEEN
AUTOMATED IN THE CASSETTE-TO-CASSETTE MANNER. SINCE THE WAFER CASSETTE IS
STANDARDIZED, NO LARGE PROBLEM EXISTS, EVEN BY USING COMMERCIALLY
AVAILABLE EQUIPMENT FOR THE AUTOMATION OF THESE TWO PROCESSES. A WAFER
HANDLER BETWEEN A CASSETTE AND A QUARTZ BOAT FOR A FURNACE, HOWEVER, WILL
HAVE TO BE DEVELOPED BECAUSE NO GOOD HANDLER IS AVAILABLE IN THE MARKET.
- 1 0 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
SINCE THE SHAPE AND SIZE OF WORK CHANGES DEPENDING ON PRODUCTS AND
PROCESSES IN FABRICATION BEYOND DICING, THE AUTOMATION OF INDIVIUDUAL
EQUIPMENT HAS MADE SLOW PROGRESS. ALTHOUGH SOME EQUIPMENT IS AUTOMATED IN
THE MAGAZINE-TO-MAGAZINE MANNER, THE MAGAZINE HAS NOT BEEN STANDARDIZED,
THIS SITUATION IS ONE OF THE BIGGEST PROBLEMS WHEN CONSTRUCTING AN
AUTOMATED MANUFACTURING LINE FOR THE ASSEMBLY AND FINAL TEST PROCESSES,
AND THEREFORE, A CONSIDERABLE AMOUNT OF EQUIPMENT MUST BE DEVELOPED BY
SEMICONDUCTOR MANUFACTURERS.
SUMMARY AND COMMENTS
THE STRUCTURE OF THE MANUFACTURING LINE, THE CONTROL SYSTEM, THE TRANSPORT
SYSTEM AND THE LAYOUT, AND INDIVIDUAL EQUIPMENT WERE DISCUSSED FROM THE
POINT OF VIEW OF THE AUTOMATION OF A LSI MANUFACTURING LINE. THE CONCEPTS
SHOWN HERE AS EXAMPLES ARE THOSE FOR THE MANUFACTURING LINE HAVING A
CERTAIN PURPOSE, AND IT IS NATURAL THAT THE LINE HAS ITS OWN CONCEPTS
DEPENDING ON ITS PURPOSES AND CHARACTERISTICS.
THE LARGEST PROBLEMS IN THE AUTOMATION OF LSI MANUFACTURING LINES ARE:
1. THE RAPID CHANGE IN PRODUCTS, PROCESSES AND PRODUCTION EQUIPMENT.
2. THE LOW RELIABILITY OF PRODUCTION EQUIPMENT.
3. THE LOW PROCESS CAPABILITIES.
SINCE THESE PROBLEMS WILL REMAIN FOR NOW, IT IS ESSENTIAL TO DESIGN THE
AUTOMATED LINE ON THE PREMISE OF THIS SITUATION.
IN CONCLUSION, THE ULTIMATE PURPOSE OF AUTOMATION IS TO MAKE THE
PRODUCTION COST MINIMAL. THEREFORE, TOTAL AUTOMATION IS NOT ALWAYS THE
BEST SOLUTION, BUT THE MOST APPROPRIATE COMBINATION OF AN AUTOMATED SYSTEM
AND HUMANS WILL MORE CLOSELY ADDRESS THIS ULTIMATE PURPOSE. IN OTHER
WORDS, "MANUALLY ASSISTED AUTOMATED PRODUCTION" WILL BE THE BEST CONCEPT
FOR THE AUTOMATED LSI MANUFACTURING LINE.
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Dataquest Incorporated, ASubsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
REFERENCE DOCUMENTS:
1. NAOSHI SUGIYAMA: "FA TECHNOLOGIES IN VLSI FACTORY", SEMICON
OSAKA TECHNOLOGY SEMINAR 'SSM TECG, ORIGRAN ORIC, 0,83
(JUNE 1985)
2. JAMES G. HARPER, GLENN B. BURKHARD AND ROBERT T. NELSON:
"INFORMATION, COMMUNICATION, AND CONTROL IN FLEXIBLE WAFER
FABRICATION AUTOMATION: SOLID STATE TECHNOLOGY", (JANUARY 1985)
PAGE 119.
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Dataquest
NEW PRACTICES IN LEADING EDGE MANUFACTURERS
James R. Burnett President
Institute for Microcontamination Control
Dr. Burnett is President of the Institute for Microcontamination Control, in Santa Clara, California. He practices in world-K:lass microelectronic manufacturing technology, consulting in contamination control, planning and design of leading-edge micromanufacturing plants, production engineering, and yield-related manufacturing practices. He also writes a regular column entitled "Wbrld-Class Practice" for Microcontamination magazine. Previously, Dr. Burnett was the Manager for New Manufacturing Plants, worldwide, for Intel Corporation. He also completed research and development on high-technology projects for the Atomic Energy Commission, the U.S. Air Force/Advanced Research Projects Agency, the Naval Bureau of Weapons, and NASA. Dr. Burnett received a B.S. degree in Aeronautics and an M.S. degree in Nuclear Physics and Mathematics from the University of Michigan and a Ph.D. in Applied Physics from Central University. He is a Registered Nuclear Engineer in California.
Dataquest Incorporated SEMICONDUCTOR EQUIPMENT AND MATERIALS INDUSTRY SERVICE CONFERENCE
October 14-16, 1985 Tucson, Arizona
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
PROCESS EQUIPMENT ISSUES - CLEANLINESS
noST PROCESS EOUIPNENT IS NOT NELL DESIGNED REGARDING ABILITY TO BE
REGULARLY CLEANED IN PRODUCTION.
IT IS CONNON THAT EOUIPNENT CANNOT BE CLEANED UP TO MEET ITS
NEW CLEANLINESS PERFORMANCE/ AFTER IN USE AND HAVING GROUND UP SILICON
THROUGHOUT ITS WORKING PARTS.
SOME PROCESS EQUIPMENT CANNOT BE CLEANED WITHOUT A PROCEDURE MORE
LIKE MAJOR OVERHAUL THAN MAINTENANCE.
PROCESS EQUIPMENT ISSUES - CLEANLINESS
THE INSTITUTE RECOMMENDS THIS EVALUATION PROCEDURE FOR PROCESS EQUIPMENT:
A) PASS 500U WAFERS THROUGH THE MACHINE
B) MEASURE THE WAFER BREAKAGE RATE
c) CLEAN MACHINE BY MANUFACTURER'S RECOMMENDED MAINTENANCE PROCEDURE,
MEASURE DOWN-TIME REQUIRED
D) THEN* MEASURE THE PARTICLE CONTRIBUTION PER WAFER-PASS THRU THE MACHINE
WE BELIEVE JAPANESE DESIGNERS ARE AGGRESSIVELY WORKING ON CLEAN
PROCESS EQUIPMENT, AND WILL COMPETE IN THE US MARKET ON THAT STRENGTH.
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
PROCESS EQUIPMENT - REFURN AIR BLOCKAGE
THE NEW lOOZ LAMINAR CLEAN ROOMS HAVE 550 AIR CHANGES PER HOUR,
COMPARED TO 150 AIR CHANGES PER HOUR IN OLDER FACILITIES
PROCESS EQUIPMENT DESIGNERS MUST PROVIDE A RETURN-AIR BATH BENEATH
THEIR MACHINES OF AT LEAST 10 INCHES, CLEAR
BLOCKED RETURN AIR DESTROYS THE AERODYNAMIC BENEFITS OF THE CLASS 1
CLEAN ROOMS
PERFORATED FLOORS ARE NOT THE ANSWER FOR RETURN AIR, SINCE 75Z OF
CLASS 1 FACILITIES USE SIDE-WALL RETURNS
PROCESS EQUIPMENT ISSUES - CLEANLINESS
THE WORST CONTR IBUTOR TO Y I E L D L O S S W I L L BE PROCESS EQUIPMENT THRU
WAFER HANDLING AND INTERNAL DIRTINESS.
MANUFACTURING OF COMPLEX I-MICRON, LARGE AREA ULSI CHIPS WILL BE
MOSTLY PACED BY PROCESS EQUIPMENT CLEANLINESS PERFORMANCE.
USERS WILL MEASURE PROCESS EQUIPMENT CLEANLINESS BEFORE PURCHASE.
MHERE IT DOES NOT MEET SPECIFICATION, THEY WILL NOT BE BUYING IT -
REGARDLESS OF ITS PROCESSING PERFORMANCE.
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
CHARACTERIZATION PROGRESS DOWN THE DEFECT/CM2/L LEARNING CURVE
• IN ORDER TO SUCCESSFULLY PROGRESS DOWN THE DEFECT/CM2 CURVE/ PLANT
MUST BE ABLE TO ROUTINELY MEASURE WHERE THE ON-GOING MANUFACTURING
D/CH2/L IS SITUATED
0 PRACTICE IN SNALL OPERATIONS (SUCH AS AEROSPACE) IS REGULAR DAILY
PRODUCTION WITH DIE HAVING HIGHLY RECURRING PATTERNS^ WHERE CIRCUIT
DEFECTS CAN BE RESOLVED IN TESTING. POPULAR DIE IS DRAM IN LATEST
MANUFACTURING PROCESS
• MANY PLANTS CONSTANTLY RUN SOME DRAM AS A TOOL FOR MANUFACTURING DIE
YIELD IMPROVEMENT, EVEN WHEN IT IS NOT A SOLD PRODUCT
PROCESS EQUIPMENT ISSUES - INTEGRATION
• PREFER PROCESS EQUIPMENT BE INSTALLED PENETRATING THRU CLEAN ROOM WALL
INTO SERVICE AISLE
• INTENT IS TO DO SERVICE AND REPAIR ON BACKSIDE, WITHOUT ENTERING CLEAN
ROOM SIDE
• ONLY CONTROLS AND CASSETTE LOAD/UNLOAD STATIONS REMAIN IN THE CLEAN
ROOMS
PROCESS EQUIPMENT ISSUES - AERODYNAMICS
• CURRENT MACHINE CONFIGURATIONS MAKE IT DIFFICULT TO GET CORRECT
LAMINAR FLOW THRU BARE WAFER STATIONS AND TRANSPORT MECHANISMS
• CONTRIBUTES TO POOR PARTICLE PERFORMANCE OF MANY CURRENT MACHINES
• DESIGNERS NEED TO CONDUCT LAMINAR FLOW SMOKE STUDIES AROUND THEIR
SPECIFIC MACHINE CONFIGURATIONS TO GET PARTICLE REMOVAL BENEFIT OF THE
LAMINAR AIR
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
IN-PROCESS PARTICLE HEASUREMENTS
• USING NEW SURFACE-SCANNING PART ICLE MEASUREMENTS SYSTEMS TO
CHARACTERIZE INCREASE OF PARTICLES ON A WAFER/ THRU A PROCESS STEP
• SYSTEMS SEE SUB-HICRON PARTICLES ON BARE WAFERS, OR ON TH IN -F ILM
LEVELS WAFERS WITH A NON-PATTERNED WAFER SURFACES
0 SYSTEMS DO NOT WORK STRONGLY ON PATTERNED WAFER SURFACES
• NEXT-GENERATION SYSTEMS MIGHT BE ABLE TO LOOK AT PATTERNED SURFACES
• POSSIBLE TO QUANTITATIVELY MEASURE NUMBER OF PARTICLES PRESENT,
BEFORE AND AFTER SOME PROCESS STEP
• USE SYSTEM TO CHARACTERIZE THE INCREASE IN PARTICLES ON A WAFER FOR
EACH PROCESS WAFER HANDLING STEP
t PRACTICE IS TO INCLUDE, WITH PRODUCTION WAFER RUNS, A BARE CLEAN
WAFER, FREE OF OXIDES AND PATTERNS
• T H I S CHECK GOES THRU A L L WAFER HANDL ING STEPS, I N C L U D I N G
INSERTION/REMOVAL FROM PROCESS EQUIPMENT
• PARTICLE BUDGET LIMITS ARE SET FOR EACH PROCESS EQUIPMENT
t BEFORE AND AFTER EACH PROCESS STEP, THESE WAFERS ARE MEASURED FOR
PARTICLE POPULATION
t PARTICLE CONTRIBUTION PERFORMANCE IS MEASURED DAILY FOR EACH PROCESS
• PARTICLE CONTRIBUTION PERFORMANCE IS MEASURED TO REQUALIFY A PROCESS
EQUIPMENT AFTER CLEANING OR REPAIR
• NOW BEING USED IN EVALUATING NEW PROCESS EQUIPMENT FOR PURCHASE
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
AUTOHATION
0 STOP REWORK AND EXCESSIVE INSPECTION IN LITHOGRAPHY
DO IT RIGHT THE FIRST TIME
PRODUCT CYCLE TIME
t SHORTER CYCLE TIMES HAVE SEVERAL BENEFITS
M FASTER DIE YIELD IMPROVEMENT ON NEW PROCESS AND PRODUCTS
M MINIMIZES EXPOSURE TIME TO PARTICLES
M FASTER CUSTOMER RESPONSE IN CUSTOM AND PARTLY CUSTOM MARKET
PRODUCT CYCLE TIMES
• PLANTS ARE BEING PLANNED FOR FAST THRUPUT TINE OF WAFERS IN
MANUFACTURING
• THRUPUT TIMES OF EIGHT WEEKS HAVE BEEN COMMON IN PAST
• LONG PERIODS WERE SPENT IN LITHOGRAPHY, WAITING FOR REWORKED WAFERS
TO CATCH UP
t NEW PLANTS HAVE THRUPUT GOALS AT BETWEEN TWO AND THREE WEEK WAFER
CYCLE TIMES, INCUDING WAFER SORT
• AGGRESSIVE WORK-IN-PROCESS MANAGEMENT WILL BE ADOPTED AS PART OF
PHASE, AUTOMATION
• PLANTS ARE PLANNING RAMP-UP WITH 3 SHIFTS TO MINIMIZE THRUPUT TIME,
NOT FOR CAPACITY
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
CHARACTERISTICS OF CLASS 1 ROOnS
• AERODYNAMIC DESIGN PRODUCES S IGNIF ICANTLY BETTER
I S O L A T I O N BETWEEN OPERATOR TRAFFIC AND BARE WAFER AREAS.
• AERODYNAMIC FLOW OF LAMINAR AIR PROVIDES A HORIZONTAL AIR
CURRENT COMPONENT* QUICKLY REMOVING PARTICLES GENERATED
BY PROCESS EQUIPMENT.
• BARE WAFER AREA RECOVERS FROM MAJOR PARTICLE EVENT WITH 6
SECONDS
• ALSLEWAYS ARE CLASS 10. LOCAL MANUFACTURING WORK-FLOW
DONE WITHBOUT 'PROTECTIVE' BOXING
• BOXING USED ONLY FOR WIP STORAGE AND LONG-DISTANCE TRAVEL
t CHEMICAL DELIVERY DONE VIA SERVICE AISLES
PROCESS EQUIPMENT AUTOMATION
EACH PROCESS EQUIPMENT INTRINSICALLY AUTOMATED:
•• CASSETTE TO CASSETTE INTERFACE
•• INTERNAL WAFER TRANSPORT BY MECHANISM* TRACK OR ROBOTIC AS
APPROPRIATE
•• MICROCOMPUTER CONTROLLED FOR PROCESS STABILITY
•• BUILT-IN DIAGNOSTICS
OVERALL FAB WORK-IN-PROCESS COMPUTER MANAGEMENT SYSTEM, WITH
DISTRIBUTED WIP CONTROL AND CASSETTE HOLD STATIONS
CASSETTE TO QUARTZ TRANSFERS BY PRECISION SMART-EYED ROBOT
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
flEASURENENTS
t A MAJOR IMPROVEMENT IS ALL PROCESS-CRITICAL FACILITY PARAMETERS ARE
CONTINUOUSLY MEASURED AND RECORDED^ DETECTING PROBLEMS WHEN THEY START
CLASS I CLEAN ROOfIS
• THESE NEW PLANTS HAVE CLASS 1 IN THE BARE WAFER AREAS AND CLASS 10 IN
THE A I S L E W A Y S
• ROOMS HAVE IOOZ LAMINAR COVERAGE^ AND AERODYNAMIC FLOW AROUND THE
PROCESS EQUIPMENT
• THE ROOMS ARE MUCH CLEANER THAN PRIOR PRACTICE:
CLASS QF PRACTICE CRITICALPARTICLE SIZE CLEANLINESS IMPROVEMENT
CLASS 100 0.5 MICRONS 1 TINE
(FED STD 209B)
CLASS 10 0.5 MICRONS 10 TINES
CLASS 10 0.2 MICRONS 100 TIMES
CLASS 1 0.2 MICRONS 1000 TIMES
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
PLANT DESIGN/OPERATION
THE WRLD-CLASS PLANT DESIGNS ARE APPROACHED AS AN INTEGRATED SYSTEMS
PROBLEM
THE ORGANIZATION OF MANUFACTURING OPERATIONS* MATERIALS HANDLING,
PERSONNEL PRACTICES, AND FACILITY DESIGN ARE A SINGLE SYSTEMS PROBLEM
THESE NEW PLANTS ARE DESIGNED SO THAT THE FACILITY IS REMOVED AS A
POSSIBLE PROCESS STABILITY OR DIE-YIELD PROBLEM
KISS
• "KEEP IT SIMPLE'
• FACILITIES NOW ARE DELIBERATELY DESIGNED TO STAY ON SPECIFICATION ALL
THE TIME/ AND NOT BE A PROCESS-ISSUE
• EXAMPLES OF NON-ISSUE PROCESS-CRITICAL SYSTEMS:
00 LITHOGRAPHY RH AND TEMPERATURE ARE HELD CONSTANT REGARDLESS OF
OUTSIDE CONDITIONS
00 VIBRATION, THROUGHOUT THE FAB AREA
00 AIRBORNE PARTICLE CLEANLINESS
00 PROCESS GAS PURITY
00 DI WATER PURITY
00 INCOMING CHEMICALS PURITY
t
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 A Telex 171973
RELATIVE inPORTAHCE OF CONTAMINATION SOURCES IN WORLD-CLASS PRACTICE
(CURRENT INSTITUTE OPINION)
0) HANDLING OF WAFERS BY OPERATORS WITH VACUUM WANDS AND TWEEZERS, AND
ROLL-OVER C A S S E T T E - T O - C A S S E T T E TRANSFER. (NoT ALLOWED IN W O R L D - C L A S S
PRACTICE)
I) FLECHANICAL HANDLING OF WAFERS
2) PROCESS EQUIPMENT INTERNAL DIRTINESS
3) PERSONNEL, WHEN NOT FOLLOWING PROCEDURES NEAR BARE WAFERS
4) ULTRAPURE WATER SYSTEM
5) ULTRAPURE CHEMICALS USED IN PROCESS
6) JANITORIAL CLEANING IN ROOMS
7) PERSONNEL, WHEN FOLLOWING PROCEDURES
8) NEW FILTERS
9) TRANSFER OF WAFERS BETWEEN AISLES, BY CLEAN PROTECTIVE BOXING
10) TRANSFER OF WAFERS WITHIN CLASS 1/10 PROCESSING AISLES WITHOUT BOXING
11) CLEAN ROOM LAMINAR ENVIRONMENT
12) ULTRAPURE GAS SYSTEMS
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
THE YIELD CHALLENGE
THE PERIOD 1986 TO 1996 WILL SEE AT LEAST THREE MAJOR CYCLES OF
TECHNOLOGY UPGRADE IN MANUFACTURING INCLUDING:
00 1 MICRON BY 1990
00 0.7 MICRON BY 1995
THE PLANTS BEING DESIGNED TODAY ARE EXPECTED TO PERFORM COMPETITIVELY
ON 1996 TECHNOLOGY« WITH THE SAME FACILITY
T H E GREATEST CHALLENGE WILL BE D E F E C T / C M ^ PERFORMANCE IN
MANUFACTURING/ AS THE INDUSTRY GOES TO 1 MICRON AND BELOW
DIE YIELD MODELING SHOWS MANUFACTURING TECHNOLOGY MUST BE GREATLY
IMPROVED OVER TODAY'S PRACTICE* BY AT LEAST 10 TIMES IN DEFECTS/CM^
BEFORE 1990
FIGURE SHOWS TYPICAL CURRENT MANUFACTURING PERFORMANCE OF 0.5 D/CM^
AT 0.2 MICRONS DROPS BELOW LOZ YIELD BEFORE 1.25 MICRONS
NEXT FIGURE SHOWS D/CM^ PERFORMANCE REQUIRED TO MAINTAIN lOZ DIE YIELD
NEXT GENERATION "WORLD CLASS" PLANTS
PLANT DESIGN/OPERATION
CLASS 1 CLEAN AREAS
AUTOMATION
PRODUCT CYCLE TIME
IN-PROCESS PARTICLE AND DEFECT MEASUREMENTS
DEFECT/CM2 CHARACTERIZATION
10
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
NEW PRACTICES IN LEADING-EDGE HANUFACTURING
• THE CHALLENGE IN MANUFACTURING TECHNOLOGY (YIELD)
t WORLD CLASS PLANT FEATURES
t NEW OPERATING PRACTICES
• PROCESS EQUIPMENT ISSUES
TREND OF INDUSTRY - THE WORLD-CLASS PLAYERS
INDUSTRY IS NOW BUILDING A NEW LEVEL OF MICROELECTRONIC PLANT, THE
"WORLD-CLASS* (» 'CLASS 1* PLANT
PURPOSE IS TO ENABLE LEADING-EDGE MERCHANT MANUFACTURING COMPANIES
TO COMPETE PROFITABLY, WORLD-WIDE, ON MICROELECTRONICS COMING UP IN
THE NEXT 6 YEARS - THE "ULSI* CHIPS
THE ESSENCE OF ECONOMIC SUCCESS OF LEADING-EDGE MERCHANT COMPANY IN
ULSI PRACTICE IS DIE YIELD AND PROCESS UPGRADE FLEXIBILITY
ALL INSTITUTE-INVOLVED NEW MICROELECTRONIC PLANTS STARTED IN LAST TWO
YEARS HAVE BEEN DESIGNED TO BE WORLD CLASS, I . E . , NAXIMUM
UNCOHPROMISING EFFORT FOR DIE YIELD
THIS HAS COVERED OVER A DOZEN MERCHANT COMPANIES FROM THE LARGEST TO
THE LATEST START-UPS
11
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Dataquest
CHALLENGES IN AUTOMOTIVE ELECTRONICS
Jerome G. Rivard Chief Engineer, Electrical and Electronics Division
Ford Motor Company
Mr. Rivard is Chief Engineer for the Electrical and Electronics Division of the Ford Motor Conpany. Prior to joining Ford, he spent 14 years with the Bendix Corporation, where he was Group Director of Engineering. He has also been associated with vickers incorporated, the U.S. Army Ballistic Missile Agency, and tJie General Motors Technical Center. Mr. Rivard received a B.S.M.E. degree vith honors from the University of Wisconsin.
Dataquest incorporated SEMICONDUCTOR INDUSTRY CONFERENCE
October 14, 15, and 16, 1985 Tucson, Arizona
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
CHALLENGES IN AUTOMOTIVE ELECTRONICS
Jerome G. Rivard Chief Engineer
Ford Motor Company
INTRODUCTION
Good Morning. Once again I'm happy to be addressing my colleagues in the electronics community. The past couple of days have been most rewarding in terms of the information that's already been exchanged.
One hundred years ago, in 1885, Karl Benz, a German engineer, built the first workable automobile, a one cylinder, three-wheeled vehicle. We can imagine the challenges faced by Mr. Benz and other auto pioneers. There were basic vehicle needs to start, steer, run, and stop reliably.
Today, we're faced with quite a different set of challenges that I'm hopeful will be met in the near future.
Accordingly, I think the title selected—"Challenges in Automotive Electronics"—is most appropriate for this conference. There's no question that the auto industry's long term viability hinges on our mutual efforts to be innovative, cooperative, and driven by a dedicated commitment to achieve uncompromising levels of quality. I can't emphasize enough that achieving world class quality is our major challenge in the automotive electronics arena. The automotive industry realizes that the vehicle's electronic, electrical and mechanical systems must be in harmony. One system must not fail the other two. It's a little bit like Frank Sinatra's lyrics in the old song about "Love and Marriage"—you know the one where he sings that..."you can't have one without the other." That's domestic harmony that keeps people together. Vehicle harmony keeps people loyal to their car company and it attracts new owners. We know that today's auto buyer has a wide choice in automobiles. We also know that today's consumer will take his business across the street (or across the world) if his vehicle fails to deliver top-notch, world-class performance.
FORD'S LONG TERM QUALITY TARGETS
At Ford, we've established long term quality targets and through the major contributions of the semiconductor industry, we've made good progress over the past few years but much work remains to be done, and we need additional help to achieve our goals.
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Dataquest Incorporated, A Subsidiary of A 0. Nielsen Company/ 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
We can say with certainty that progress in the area of vehicle quality will require new approaches to both engineering and manufacturing motor vehicles. It will also require fresh, new approaches to the manufacturer—supplier relationship. The results of all these activities must make us cost competitive on a global basis while enhancing our quality levels.
Today, I'll discuss the current state of automotive electronics from a quality point of view...look at areas of specific concern that require our attention now...and review some electronic technologies where further development will usher in a host of automotive applications.
I think it's helpful to see where the automobile has progressed in terms of electronic applications.
This slide puts into perspective the significant presence of electronics in the automobile. The influence is rather remarkable when you think back only ten years when less than 20 per cent of these electronic systems were available.
NEED FOR CONSISTENT SUPPLIER QUALITY
Let me say, here, that I think our semiconductor suppliers, overall, can do an excellent job of building quality parts. It's simply a matter of consistency. We need to see quality parts produced each day of the week. I hope some of the suggestions I'll make in the next few minutes will assist our suppliers in meeting quality levels that are consistent, day-in and day-out.
At Ford's Electrical and Electronics Division, we've set some quality goals for ourselves. By 1988, we have a goal to have integrated circuit quality levels of below 50 parts per million and electronic module quality below 400 parts per million.
These quality levels are certainly attainable but, frankly, we need to first resolve some important issues with you, our semiconductor suppliers.
The first area where we need to harmonize our efforts is in the way that quality is measured.
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Dataquest Incorporated, A Subsidiary of A.C Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
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What's happening is this. Our incoming quality level at Ford and I'm sure elsewhere—differs dramatically from what our suppliers are telling us about their outgoing quality levels.
You'll note from the slide that there's quite a difference and what this tells me is that there's a measurement problem that needs to be made right. We're using different methods to measure quality. We're out of step on this issue quite significantly.
It appears that major differences exist in outgoing and incoming test programs... inadequate component specifications related to part application...or several other factors could come into play here. To improve this situation, there are several actions I would like to see our suppliers take.
As a semiconductor supplier, and to help us understand the reasons for early field failures, you should be gathering "burn-in-data" on your components—and have a good idea how this data helps you as a quality screen. I also hope that you would share this data with us. We would like to know, for example, what your "infant mortality" rate is—and how long and at what temperature should we be burning parts in?
During the burn-in process, is it possible that some parts are being damaged by electrostatic discharge? Is burn-in the best screen for all parts? It's essential that we learn the answers to these kinds of questions. Customer satisfaction and loyalty are at stake!
I Strongly urge suppliers—who provide Ford Motor Company with complex microcomputers—to utilize computer aids to help develop designs capable of fault elimination that approaches 100 per cent.
We'd like you--our suppliers—to visit our manufacturing plants to see, first hand, how your parts are processed. And, during your visits, pick up some failed parts and take them back to your company for a thorough failure analysis.
Once you've analyzed failed parts, tell us what's been discovered. More importantly, make the design, process, and test program changes required. If you think that we're doing something to damage parts, don't hesitate to tell us. The old days of doing business are gone, I hope, forever. We're not going to "shoot the messenger" for bringing us bad news.
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Dataquest Incorporated, A Subsidiary of A C. Nielsen Company / 1290 Bidder Park Drive / San Jose. CA 95131 / (408) 971-9000 / Telex 171973
Also, I would like you to insist on "correlation" and to make your test engineers available to work with us. And, please, don't tie our hands with "non-disclosure" agreements for information which is not really secret. Work with us as partners who trust each other and share information.
Another area we need to address is specifications. We have to Stop thinking in terms of tolerances but, rather, design circuits to target values. At Ford, our specifications will soon emphasize target values and we'll expect our suppliers to provide parts with very tight distributions around our target values.
This approach will provide for better design margins in Ford products and this means better quality...reliability...and better yields for you.
Something else to consider is electrostatic discharge which is becoming a larger factor in quality and reliability concerns. You probably know that the major problem involving ESD is in the latent damage which shows up in the field. Let's be certain that our people are aware of this problem and that manufacturing plants and integrated circuits are up to the latest standards of ESD protection.
At Ford, we've tightened our requirements to 2000 volts—the industry standard Human Body Model—and we've adopted the so-called Charged Device Model which is widely used in Japan. This last model simulates the effects of charged machinery such as integrated circuit handlers.
Once again, I would ask you to visit our plants and tell us if you think there's an area where we can improve. I would like our suppliers to understand Ford facilities as they relate to ESD considerations. Of course, it works both ways because I continually encourage people from our Division to visit supplier plants. Getting to know each other's facilities makes good business sense for the manufacturer and supplier team to follow. Only good results can be expected from visiting and understanding each other's facilities.
OUR CHALLENGES AND OPPORTUNITIES
Now, let's look at some specific areas that present us with an array of challenges...and opportunities.
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Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose. CA 95131 / (408) 971-9000 / Telex 171973
Ford, along with most of the electronics industry, believes that surface mounted devices offer the best potential for improving electronic packaging density. Another benefit of SMD's is enhanced reliability. Ford has, in fact, committed itself to implementing surface mounted device technology and we've initially targeted radios and engine control modules. By the end of 1985, Ford will have placed a cumulative total of 84 million SMD's with an expected increase to a cumulative 3 billion SMD's in the 1990's.
Let me give you a good news-bad news perspective on the current state of surface mounted devices. Looking at advantages, I've mentioned the important benefit of higher component density. To date, board space savings has amounted to one third to one half—and permitted more circuit functions and complexity. In addition, SMD's provide us with a meaningful size and weight reduction at the module level.
The SMD process is highly automatable.
Surface mounted devices also provide improved shock and vibration characteristics and because of the shorter interconnects, there's lower electromagnetic and radio frequency interference susceptibility.
Now, taking a look at the other side of the coin, here are some areas that need to be improved.
Consider the importance of machine compatibility with package tolerances—and the board layout. Time and time again, we've seen that incompatible equipment and parts just don't mix. I'd also like to remind you that electrostatic discharge can be a problem if conductive tapes are not used.
There's a current lack of component availability and Standardization. For example, small outline transistor packages vary in footprint and body sizes. This results in various problems with circuit layout and manufacturing.
Plastic "J" leaded quad packs require improved planarity since problems are occurring during subsequent reflow solder operations. We would like to have less than a 2 mil variation across all leads.
We would like to see IC suppliers improve their component reliability by evaluating their components through various soldering processes. These processes include wave soldering, infra-red, and vapor phase. These soldering techniques represent Ford's current and future assembly requirements and assistance is needed in determining the reliability factors.
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Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose. CA 95131 / (408) 971-9000 / Telex 171973
Moving on, we need to have SMD tape and reel standards because, from a user perspective, the ability to utilize a reel on any given machine is a significant advantage. We should also have a conductive, plastic embossed tape. Basically, I see a need to determine the best tape material for the industry.
We would also consider it to be a positive step to see the development of SMD packaging with lower thermal resistance.
Tape automated bonding offers the potential for quality improvement, size reduction, and better thermal management. We believe that the semiconductor industry needs to bring this technology into the mainline manufacturing system and we strongly encourage the industry's action in this area.
Looking at testability issues, we feel that significant improvements are required for handling equipment involving small outline transistors, small outline integrated circuits, and quad packaging. Currently, the co-planarity of device leads may be distorted by test equipment handlers and burn-in sockets.
There's a need to develop effective methods of applying "burn-in" and other conditioning screens to SMD packaged IC's. When evaluating devices that are packaged as small outline integrated circuits, test sockets are required for quick insertion and removal. These test sockets are very expensive and the handling process results in a high probability of damaging the parts when they're mounted or removed from the sockets. Now, even though this particular problem may be unique to the test equipment makers, we all retain a vested interest in the development of the right equipment.
I hope that the concerns I just presented will be acted upon by our semiconductor suppliers at a quicker pace. I know you're working on many of these concerns already. The resolution of these issues will help bring us the quality products that are demanded in today's global automotive market—and, as a spin-off benefit, answer the needs of the electronics market in general.
BETTER BUSINESS PRACTICES
Next, I'd like to switch gears for a few minutes and talk about better ways of doing business.
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Dataquest Incorporated, A Subsidiary of AC Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Ford Motor Company is encouraging its suppliers to plan for quality through new, improved business and manufacturing practices.
We're encouraging a no-secrets, up-front, open relationship with each supplier. We're reducing our supplier base to those companies who meet "best in quality" credentials from planning to manufacturing. Ford is looking for long term, partnership-type relationships.
One technique we'd like to see all of our suppliers adopt is statistical process control. In what should be considered to be ancient history, most manufacturers used screens to weed out bad parts. No more! This method is both wasteful and costly. Establishing a statistically-controlled process simply means that the quality level can be controlled, maintained, and improved based on reproducible, consistent results. Screening should be practiced primarily for monitoring and feedback purposes, not to eliminate unacceptable parts. Unfortunately, screens are still required to weed out infant mortality.
A key benefit of SPC is the ability to consistently produce product uniformity. As I mentioned earlier, at Ford we're designing to target values and our specifications will soon reflect this. Moreover, we expect tight distributions around these target values—and these target values are attainable through statistical process control and design of experiments.
Let me remind you that by the 1990's, electronic content per vehicle should be about $1400 worldwide. The U.S. electronics content per vehicle today is projected to be $650.
Currently, the overall automotive electronics market is at $2 billion anually. One conclusion we can draw with certainty is the need for technological breakthroughs and a need for the highest product quality to support this expanded electronic content.
Now that we've looked at some areas of mutual concern, I would like to talk about a number of electronic technologies and their automotive applications.
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Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408)971-9000/ Telex 171973
ELECTRONIC TECHNOLOGIES AND THEIR AUTOMOTIVE APPLICATIONS
Memories
The expanded use and sophistication of microprocessors in automobiles has required large amounts of read-only memory, ROM, and the need to turn around new ROM codes quickly. Let me just say that the strides the industry is making toward cost effective EPROM and E2pR0M is most appreciated. In fact, EPROM's are having a major impact on our engine control program in the 1986 model year.
The ability to reprogram the microcomputer after manufacture—using an on-board EPROM or E2PROM—is also a highly desirable goal. With respect to alterable memory, reprogramming ability will result in a reduction in part inventory for the semiconductor manufacturer and the user and will provide for last minute changes which always seem to be required. Our ongoing concern here is with reliability and quality levels since the EPROM or E2PROM on board a micro-computer is not as easily tested as a standard memory.
Power Devices
With the continued growth of automotive electronic systems, the use of power devices will increase substantially. Recently, power devices and control circuitry have been combined on a single IC, resulting in a smart power device. This development opens the door to new applications which could include power supplies, electronic relays, multiplex wiring, and actuator drivers.
For these applications to become "real-world," we need lower costs and further reductions in on-resistance. Smart power devices need to be capable of being utilized in a multiplexed wiring system.
For example, we need the following on-resistance performance at 20 amps. A drop of less than one volt on the high side switch—and a drop of less than one half volt on the H Driver. We also need to see costs come down to $2.00 and $6.00 respectively.
Microprocessors
There's no sense in reviewing the obvious—the tremendous advances we've had in microprocessor technology. There are, however, a few areas where certain developments would represent major progress—and make a great deal of sense.
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Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Because today's vehicle applications require large amounts of power, there's an immediate need to improve the basic input-output capability. This improvement may require a combination of device technologies on the same chip, a challenge the semiconductor industry is presently pursuing.
The combination of more powerful computers and drivers will increase the range of control functions, reliability, and will allow direct microprocessor control of such items as electronic instrumentation and audio systems.
Data Sharing, among vehicle systems, is another worthy goal that promises many customer benefits including vehicle reliability and added functional content. A good example would be data sharing between the vehicle's engine module and electronic instrumentation. This would eliminate redundant sensors.
We're looking for cost effective Digital Signal Processing for application to our audio products. The fast pace at which design rules are shrinking will hopefully bring the day closer when the DSP complex functions can be implemented on a die size which is cost competitive—on a system basis--with today's analog approaches.
Sensors
Another key technology with strong automotive ties is sensors—and the need for sensors continues to increase. I'm looking for the development of smart sensors—the integration of electronics into sensing elements. This accomplishment would enable us to perform signal conditioning, self diagnostics, and simple vehicle computations.
We also need new sensor developments to meet such automotive applications as fluid level checks and condition, non-contacting rotary and linear position accelerometers for use in ride and handling control, accurate and durable mass air flow management, and in-cylinder engine parameters.
I'd just like to interject a thought here on sensor suppliers. We've found that those companies who have full service capability provide us with the best sensor products. Full service means a sensor supplier who has outstanding capabilities in technology, design expertise, manufacturing, and application experience.
Along with the potential sensor developments and company capabilities I just mentioned, we'll need advances in distributing power and information throughout the vehicle.
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Dataquest incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Multiplex Wiring
There's no question that the wiring harness has become complex and bulky. Multiplex wiring offers a solution to the ever-growing nest of wires. Our vision calls for a multiplex wiring system that consists of a "bus" that's made up of power and ground wires and a pair of signal wires that interconnect all of the vehicle's modules, actuators or loads. Each of these products would have an intelligent interface to the bus. To achieve this vision, we need continued development of key technologies by our electronic suppliers. These key technologies include smart power high side drivers and H drivers with ratings of 4, 10, and 20 amps which are needed now—while 40 amp versions carry a lower priority. These devices should have overload protection and provide status feedback.
Microcomputer features we would be happy to see include CMOS with a "sleep mode" for low key off current, on-chip E2pR0M to help us minimize the number of unique modules and microcomputer codes, additional on chip RAM (50-100% increment to current RAM availability), and an on-chip serial port for the logic level portion of the multiplex signal bus interface.
There's a need for a line driver with low voltage drop—and an on-chip line receiver, both, which operate from 10 to 16 volts DC.
Finally, on our multiplex wiring "want list," are insulator piercing connectors that are reliable in an automotive environment. This development would, of course, ease the connection to the multiplex wiring bus.
SOMMARY
Over the past several minutes, I've reviewed the key challenges and opportunities facing those of us in the electronics community. I have no doubt that all of these Challenges and opportunities will be fully exploited.
I began this talk by emphasizing the need for quality parts and I want to end on the same note.
I urge all of you to consider the issue of quality, its short-term and long range implications.
Quality products—supported by a quality attitude throughout the industry—is the key to the present and the future.
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Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
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Quality electronics, designed and manufactured to exacting' standards, will earn us the worldwide consumer acceptance we all aspire to. This may sound like a philosophy we all learned in Engineering 101, but, unfortunately one that hasn't always been fully embraced.
Ford has the Ql Preferred Quality Supplier Program that provides recognition to suppliers who have consistent high levels of product quality. These suppliers are rated on a number of criteria that takes into consideration the supplier's overall quality effort. The semiconductor companies rated Ford Ql are listed on this slide.*
I congratulate the management and employees of these firms for their dedication to quality workmanship.
At Ford, we're committed to make quality an inherent ingredient of our corporate culture. It must be a basic commitment in every employee's work ethic.
I hope that all of our suppliers (and potential suppliers) adopt a similar corporate-wide perspective.
In closing, I'd just like to emphasize that the time to move forward on the worldwide electronics front has never been more pressing.
We can identify our challenges. We can see our opportunities. We can take action to achieve our mutual goals.
The automotive industry and Ford Motor Company welcomes your ideas, innovation, and enthusiasm.
Thank you.
* The Ford Ql semiconductor companies are:
Cherry Semiconductor; East Greenwick, Rhode Island General Instruments; Hicksville, New York Motorola; Phoenix, Arizona NEC; Fukui City, Japan RCA; Mountaintop, Pennsylvania Sprague; Concord, New Hampshire Texas Instrumments; Dallas, Texas Toshiba; Kawasaki, Japan
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Dataquest Incorporated, A Subsidiary of A C. Nielsen Company / 1290Rldder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
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Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
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Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
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Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Parl< Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
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- 6 -Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
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Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
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Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
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Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Teiex 171973
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Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Parl< Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
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Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
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- 12 -Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Japanese Semiconductor Industry Conference
April 14-16, 1985 Hakone Prince Hotel
Hakone, Japan • - - a S**l*f
1290 Ridder Park Drive San Jose, Caiifornia 95131-2398
(408) 971-9000 Telex: 171973
Sales/Service offices:
UNITED KINGDOM GERMANY DATAQUEST UK Limited DATAQUEST GmbH 144/146 New Bond Street Rosenkavalierplatz 17
London WIY 9FD D-8000 Munich 81 United Kingdom West Germany
(01) 409-1427 (089) 91 1064 Telex: 266195 Telex: 5218070
FRANCE JAPAN DATAQUEST SARL DATAQUEST Japan, Ltd.
41, rue Ybry Azabu Heights, Suite 711 92522 Neuilly-sur-Seine Cedex 1-5-10, Roppongi, Minato-ku
France Tokyo 106, Japan (01) 758-1240 (03) 582-1441 Telex: 630842 Tfelex: J32768
The content of this report represents our interpretation and analysis of information generally available to the public or released by responsible individuals in the subject companies, but is not guaranteed as to accuracy or completeness. It does not contain material provided to us in confidence by our clients.
This information is not furnished in connection with a sale or offer to sell securities, or in connection with the solicitation of an offer to buy securities. This firm and its parent and/or their officers, stockholders, or members of their families may, from time to time, have a long or short position in the securities mentioned and may sell or buy such securities.
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© 1985 Dataquest Incorporated
Dataquest
1985 JAPANESE SEMICONDUCTOR INDUSTRY CONFERENCE April 14-16, 1985
Hakone Prince Hotel Halcone, Japan
SUNDAY, April 14 5:00 p.m. to 8:00 p.rh.
8:00 p.m. to 9:30 p.m.
MONDAY, April 15
8:00 a.m.
8:00 a.m.
9:00 a.m.
9:10 a.m.
9:30 a.m.
10:00 a.m.
10:30 a.m.
11:00 a.m.
11:30 a.m.
12:00 noon
1:45 p.m.
2:15 p.m.
2:45 p.m.
Registration Main Lobby
Cocktails Ballroom
Buffet Breakfast .Restaurant "Sakura"
Registration Continues Main Lobby
Welcome Congress Hall Gene Norrett Vice President Dataquest Incorporated
World Semiconductor Outlook Congress Hall Frederick L. Zieber Senior Vice President Dataquest Incorporated
Japanese Semiconductor IMarket Congress Hall Sheridan M. Tatsuno Research Analyst Dataquest Incorporated
Concentrated or Well-Balanced Products Strategy? Congress Hall
Tsuyoshi Kawanishi Director and Group Executive Semiconductor Group Toshiba Corporation
Break Garden
Technology Futures Congress Hall Dr. William G. Howard Senior Vice President Director of Research and Development Motorola, Inc.
dovemment Involvement: Help or Hindrance? Congress Hall Clyde Prestowitz Special Counsel to the Secretary of Japanese Affairs U.S. Department of Commerce
Lunch Restaurant "Sakura"
Achievements and Challenges— A View from the Oldest and the Newest Congress Hall
D.A. DiLeo Product Marketing Manager—IC's AT&T Technology Systems
Fundamental Forces Driving the 32-Bit MPU Market Congress Hall
Richard L. Sanquini Vice President and General Manager Microprocessor Group National Semiconductor
Break Garden
(over)
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
3:15 p.m. Japanese Semiconductor industry— The Coming New Age Congress Hall
Tomlhiro Matsumura Senior Vice President NEC
3:45 p.m. Challenges and Opportunities Facing U.S. Equipment Suppliers in the Far East Congress Hall
Jon D. Tompkins President, Semiconductor Equipment Group Varian Associates
4:15 p.m. Silicon Pervasiveness Congress Hall Kihachi Tamura President Shin-Etsu Handotai Co., Ltd.
6:00 p.m. Cocittails On the Ship "Koma No. 2"
7:00 p.m. Dinner Congress Hall
8:00 p.m. Guest Speakers Congress Hall Dr. Atsuyoshi Ouchi Vice Chairman of the Board NEC
W. J. Sanders III Chairman of the Board, President Chief Executive Officer Advanced Micro Devices, Inc.
TUESDAY, April 16
8:00 a.m. Buffet Brealcfast , Restaurant "Sakura"
9:00 a.m. MOS Memory Strategy: Face-to-l=ace with the New Market Realities Congress Hall
Lane Mason Senior Industry Analyst Dataquest Incorporated
9:30 a.m. Lithography Technology Today and Tomorrow Congress Hall
Shoichiro Yoshida Director, General Manager Industrial Supplies and Equipment Division Nil<on (Nippon Kogaku)
10:00 a.m. Break Garden
10:30 a.m. The Emerging Asian Semiconductor Industry Congress Hall Dr. R June Min Senior Managing Director Goldstar Semiconductor and Telecommunications
11:00 a.m. The Recent Development of Industry information in Taiwan Congress Hall
Dr. Irving T. Ho President Institute for Information Industry
11:30 a.m. Status Quo and Tomorrow Japanese Semiconductor Industry Congress Hall
Hiroshi Shima Industry Electronics Deputy Director MITI
12:00 noon Lunch Restaurant "Sakura"
1:45 p.m. MOS Memory, The Propulsion Power of the 10 Industry Congress Hall
Sutezo Hata Executive Managing Director Hitachi, Ltd.
2:15 p.m. A Fresh Lxrak at Japan and Asia Congress Hall Eugene J. Rath Vice President and Assistant General Manager Intel Corporation
2:45 p.m. Panel Discussion Congress Hall • Goldstar • Intel • Hitachi • Motorola • Toshiba • Advanced Micro
Devices, Inc. 4:15 p.m. Summary of Conference Congress Hall
Osamu Ohtake Manager, Research Dataquest Incorporated (Japan)
4:30 p.m. Cocktails and Buffet Dinner Ballroom
7:00 p.m. Buses Depart for Tokyo ,
:::)aDataqijest
Dataquest
JAPANESE SEMICONDUCTOR INDUSTRY CONFERENCE April 14 through 16, 1985
Hakone, Japan
List of Attendees
Masaaki Abe
Taizo Abe
Dwain Aidala Susan Aidala
Junsuke Amano
Koichi Ando
Paulo Aratangy
Norio Ashitate
Peter Bacon
Richard Battelle
David Carter
Roger Chamber land
Hong Jo Chang
Sadakiyo China
Jacques Clay
Mike Connors
Patricia Cox Neal Cox
E. David Crockett Ann Crockett
Maureen Davies Gareth Davies
Nobuynki Denda
Capital Research Company
Shinko Electric Company, Ltd.
Mitsubishi Electronics America, Inc.
Mitsubishi Electric Corporation
Marubeni Hytech Company, Ltd.
Sid Microelectronica, Ltda.
Ashitate Electric Company, Ltd.
Philips I.D.C.C.
Prime Computer, Inc.
AT&T Bell Laboratories
Harris K.K.
Daewoo Semiconductor Company, Ltd.
Mostek Japan K.K.
Hewle t t - -Packa rd Company
Jardine Fleming Securities, Ltd.
Dataquest Incorporated
Dataquest Incorporated
Dataquest Incorporated
Intel Japan, K.K.
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Dan DiLeo
John Dishman
Richard Dyck
Brian Edelman
Herbert Fenkhuber
Manny Fernandez
Eugene Flath
Ryoj i Fuj isawa
Masaru Furuta
Mutsushi Furuya
Dr. Kurt Garbrecht
Wi11iam Glaser
Ray Gouldsberry
Ralph Greenburg Miriam Greenburg
Harold Grubb
Stuart Harris Sandy Harris
Sutezo Hata
Hans He in
Yu Hirano
Dr. Irving T. Ho
Yoshikazu Hori
Harry Horie
Toshio Hoshino
Satoko Hoshizaki
AT&T Technologies, Inc.
AT&T Bell Laboratories
Teradyne K.K., Ltd.
Ford Motor Company
S i emens AG
Dataquest Incorporated
Intel Corporation
Tokyo Electron, Ltd.
Ashitate Electric Company, Ltd.
Ashitate Electric Company, Ltd.
Siemens AG>
RCA Corporation
Monolithic Memories
Motorola, Inc.
IBM Corporation
American Microsystems, Inc.
Hitachi, Ltd.
Siemens Corporation
Fujitsu, Ltd.
Institute for Information Industry
Nissec, Ltd.
Tokyo Electron, Ltd.
Fuji Electric Company, Ltd.
Dataquest Japan Limited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Dr . Wi 11 i am Howard
Susumu Ichinose
Kunio Ikisu
Yoshinori Inoi
Nakaharu Inoue
Takeshi Ishida
Kaoru Ishikawa
Akihiko Itoh
Akiro Itoh
Takio Itoh
Sh i g eno r i Iwakuma
Richard Jacobs
Shimpei Kamata
Takahiro Kamo
Hisao Kanamaru
Akira Katayama
Eiji Kawamura
Tsuyoshi Kawanishi
Bert Kehren
Jung Soon Kim
S. H. Kim
Tomoko Kodama
Cheryl Koopmans
Michael Kubiak
Motorola, Inc.
Oki Electric Industry Company. Ltd
Fuji Electronics Company, Ltd.
Suwa Seikosha Company, Ltd.
Miyazaki Oki Denki K.K.
Alps Electric Company, Ltd.
Okamoto Machine Tool Works, Ltd.
ESI Japan, Ltd.
Nippon Denso K.K.
Tokyo Electron, Ltd.
Victor Company of Japan
AT&T Bell Laboratories
Takeda Riken Company, Ltd.
Intel Japan, K.K.
Hitachi, Ltd.
Mitsubishi Electric Corporation
Tokyo Electron, Ltd.
Toshiba Corporation
United Technologies Corporation
Gold Star Company, Ltd.
Samsung Semiconductor & Telecommunications Company, Ltd.
Dataquest Japan Limited
Harris Corporation
Semiconductor Industry Association
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Michio Kumazawa
Hidehiro Kimitomo
Kyoj i Kurata
Toshio Kurihara
Yoshio Kurihara
Yoshiharu Kusuda
David Laws
Robert Lenz
Leo Lin
Hiroshi Maekawa
Albert Maringer
Lane Mason
Gerard Matheron
Shlgeki Matsue
Tsuyoshi Matsukuma
Takeo Matsiimoto
Tomihiro Matsumura
Karen Mavec
Richard May
Michael Michigami
Dr. P. Jvme Min
Junj i Miyamoto
Hisashi Mizoo
Okamoto Machine Tool Works, Ltd
NEC Corporation
Asahi Microsystems, Inc.
National Semiconductor Japan, Ltd
Ashitate Electric Company, Ltd.
Matsushita Electric Industrial Company, Ltd.
Advanced Micro Devices, Inc.
RCA Corporation
AT&T International
Hitachi Metal, Ltd.
Siemens K.K.
Dataquest Incorporated
Dieli
NEC Corporation
Nissei Sangyo Company, Ltd.
Sanshim Electronics Company, Ltd.
NEC Corporation
Jardine Fleming Securities, Ltd.
U.S. Department of Commerce
United Technologies Corporation
Goldstar Semiconductor & Telecommionicat ions , Ltd.
Matsushita Electric Industrial Company, Ltd.
Fuji Xerox Company, Ltd.
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Parl< Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Tatsuo Morotomi
Yuichi Murano
Yoshihiko Nagasato
Manher Naik
Tomokatsu Nanakura
Hiromichi Nakamura
Nobuo Nakamura
Hisashi Nakane
Nagayoshi Nakano
Masakazo Nanseki
Eiji Nishi
Gene Norrett
Mark Norwood
Detlef Nuglisch
Pat O'Malley
Rokuro Ochi
Shusaku Ogawa
Katsuhiko Ghara
Shinj i Ohba
Shoichiro Ohga
Katsufumi Ohmori
Kazuo Ohta
Osamu Ohtake
Tadao Ohtsuka
Saneaki Oshikoj i
Idemitsu Petrochemical Company
Dataquest Japan Limited
Asahi Chemical Industry Company, Ltd
National Semiconductor Corporation
Sumitomo Metal Industry
Japan Silicon Company, Ltd.
Nippon Kogaku K.K.
Tokyo Ohka Kogyo Company, Ltd.
D a t a q u e s t Japan Limited
Dataquest Japan Limited
LTX Company, Ltd.
Dataquest Incorporated
Intel Corporation
Siemens AG
Nippon Motorola, Ltd.
Wacker Chemicals East Asia, Ltd.
Asahi Microsystems, Inc.
Crestronics
NEC Corporation
Shin-Etsu Handotai Company, Ltd.
Nissec, Ltd.
Narumi China Corporation
Dataquest Japan Limited
Naigai Kizai Kaisha, Ltd.
Western Digital Japan, Ltd.
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Dr . Atsuyoshi Ouchi
Se-Jung Park
Gerald Parker
Nand Prasad
Clyde Prestowitz
G. Roy Rondo
Kimishiro Saito
Frank Samnann Nancy Sanmann
W. J. Sanders III
Richard Sanquini
Haj ime Sasaki
Satoshi Seki
Esther Sharp
Greg Sheppard
Keizo Shibata
Horoshi Shima
Kazuo Shimizu
Yong Kyxm Shin
Yoshiaki Shoj i
Charles Sikes
Michael Solomon
Bob Stevens
Kanji Sugihara
Jean Suhner
NEC Corporation
IBM Corporat ion
IBM Corporation
Interlek, Inc.
U.S. Department of Commerce
Genrad, Inc.
NEC Corporation
Dataquest Incorporated
Advanced Micro Devices, Inc.
National Semiconductor Corporation
NEC Corporation
Dataquest Japan Limited
Burr, Egan Sc Deleage & Company
Fairchild Semiconductor
Toshiba Corporation
MITI
Oki Electric Industry Company, Ltd.
Gold star Company, Ltd.
Matsushita Electronics Corporation
IBM Corporation
Osaka Sanso Kogyo, Ltd.
Genrad, Inc.
NEC Corporation
Motorola Semiconductor, Inc.
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 RIdder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Akira Suzuki
Fumio Suzuki
Kazuo Suzuki
Saburo Suzuki
George Swanson
Minoru Takagi
Kihachi Tamura
Akira Tanabe
Akira Tanabe
Koj iro Tanaka
Sheridan Tatsimo
Francois Thionet
Howard Thoele
Hitomi Tojiki
Jon Tompkins
Robert Tsao
Yu Uemura
Kiyoshi Uragami
Wi 11iam Watson
Antony Watts
Toshiyuki Yamada
Reiko Yamadashima
Se i i chi Yamaguchi
Masaaki Yamamuro
Nanako Yamane
Sprague Japan, Inc.
Mitsubishi Electric Corporation
NEC Corporation
Sumitomo Eaton Nova Corporation
Sumitomo Eaton Nova Corporation
Nippon Megatest K.K.
Shin-Etsu Handotai Company, Ltd.
Canon, Inc.
Intel Japan, K.K.
Seiko Instruments & Electronics, Ltd.
Dataquest Incorporated
Hewlett—Packard Company
Monsanto Company
Olympus Optical Company, Ltd.
Varian Associates
United Microelectronics Corporation
Dataquest Japan Limited
Hitachi, Ltd.
National Semiconductor Japan, Ltd.
SGS Semiconductor (PTE), L td .
Sony Corporation
Dataquest Japan Limited
Koito Manufacturing Company, Ltd.
Tokyo Sanyo Electric Company, Ltd.
Dataquest Japan Limited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Kanehiro Yamashita
Keisuke Yawata
Minoru Yoshida
Shoichiro Yoshida
Hiroshi Yoshihara
Masao Yoshitomi
Hideo Yoshizaki
Frederick Zieber
Alps Electric Company, Ltd
Nihon LSI Logic Corporation
General Electric Japan, Ltd.
Nikon (Nippon Kogaku)
IBM Japan, Ltd.
Mitsubishi Electric Corporation
Texas Instruments Japan, Ltd.
Dataquest Incorporated
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
i -~- -"-".' )"•.•( Dataquest
Dataquest
JAPANESE SEMICONDUCTOR INDUSTRY CONFERENCE April 14 through 16. 1985
Hakone, Japan
List of Attendees
AT&T Bell Laboratories David Carter, Supervisor, Technology Assessment Group John Dishman, Head, Technology Planning Department
Richard Jacobs, Director, VLSI Design Laboratory
AT&T International Leo Lin, Business Manager
AT&T Technologies, Inc Dan DiLeo, Manager, Product Planning
Advanced Micro Devices, Inc.
Alps Electric Company, Ltd.
David Laws, Managing Director W. J. Sanders III, Chairman, President & Chief Executive Officer
Takeshi Ishida, Marketing Manager Kanehiro Yamashita, Division Manager, Yokohama Division
American Microsystems, Inc. Stuart Harris, Market Research Sandy Harris
Asahi Chemical Industry Coi!q>any, Ltd. Yoshihiko Nagasato, Electronics Administration, Assistant General Manager
Asahi Microsystems, Inc. Kyoji Kurata, Director, Marketing Shusaku Ogawa, Manager, Administration
Ashitate Electric Company, Ltd. Norio Ashitate, President Masaru Furuta, Manager, The First Sales Division
Mutsushi Furuya, Executive Advisor & Corporate Planning
Yoshio Kurihara, Manager, The Third Sales Division
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Coinpany /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Burr, Egan & Deleage & Company Esther Sharp
Canon, Inc . Akira Tanabe, General Manager, Optical Products Development Center
Capital Research Company Masaaki Abe, Investment Analyst
Crestronics Katsuhiko Ohara, President
Daewoo Semiconductor Company, L td . Hong Jo Chang, Managing Director
Dataquest Incorporated Patricia Cox, Research Analyst Neal Cox E. David Crockett, President Ann Crockett Maureen Davies, Administrative Assistant Gareth Davies Manny Fernandez, Senior Vice President & Director, CEO Strategy Services Lane Mason, Senior Research Analyst Gene Norrett, Vice President <Sc Director Frank Sanmann, Vice President, Marketing Nancy Sanmann Sheridan Tatsuno, Research Analyst Frederick Zieber, Senior Vice President
Dataquest Japan Limited Satoko Hoshizaki, Conference Assistant
Tomoko Kodama, Conference Assistant Yuichi Murano, Research Analyst Nagayoshi Nakano, Research Analyst Masakazo Nanseki, Senior Marketing Manager Osamu Ohtake, Associate Director Satoshi Seki, Marketing Manager Yu Uemura, Research Analyst Reiko Yamadashima, Conference Assistant Nanako Yamane, Research Coordinator
Dieli Gerard Matheron
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
ESI Japan, Ltd. Akihiko Itoh, Systems Sales
Fairchild Semiconductor Greg Sheppard,. Strategic Marketing Analyst
Ford Motor Company Brian Edelman, Manager, Electrical &c Electronics Division
Fuji Electric Company, Ltd. Toshio Hoshino, General Manager Electronic Components
Fuji Electronics Company, Ltd. Kunio Ikisu, President
Fuji Xerox Conqsany, Ltd. Hisashi Mizoo, Director, Advanced Products & Technology Research Laboratory
Fujitsu, Ltd. Yu Hirano, Manager, Overseas Engineering Support
General Electric Japan, Ltd. Minora Yoshida
Genrad, Inc. G. Roy Rondo, Director Bob Stevens, Manager
Gold Star Company, Ltd Jung Soon Kim, General Manager, Central Research Lab
Yong Kyxin Shin, Managing Director
Goldstar Semiconductor & Te I ecoimnuni cat i ons
Dr. P. June Min, Senior Managing Director
Harris Corporation Cheryl Koopmans, Market Research Manager, Semiconductor Division
Harris K.K. Roger Chamber land, President
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Hewlett-Packard Company Jacques Clay, Manufacturing Manager Francois Thionet, Materials Manager
Hitachi Metal, Ltd, Hiroshi Maekawa, Manager, Corporate Sales, Administrative Division
Hitachi, Ltd. Sutezo Hata, Executive Managing Director Hisao Kanamaru, Department Manager, Marketing Sc Planning Department Kiyoshi Uragami , Manager, Marketing Sc Planning Department
IBM Corporation Harold Grubb, Manager Se-Jung Park, Senior Engineer Gerald Parker, Program Manager, Process Technology Charles Sikes, Manager
IBM Japan, Ltd. Hiroshi Yoshihara, Technical Evaluation
Idemitsu Petrochemical Company Tatsuo Morotomi, Manager, Commercial Devs1opment
Institute for Information Industry Dr. Irving T. Ho, President
Intel Corporation Eugene Flath, Vice President & Assistant, General Manager
Mark Norwood, Manager, Corporate Market Research
Intel Japan, KK. Nobuyuki Denda, Manager, Sales Headquarters Takahiro Kamo Akira Tanabe
Interlek, Inc. Nand Prasad, Executive Vice President
Japan Silicon Company, Ltd. Hiromichi Nakamura, Vice President
Dataquest incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Jardine Fleming Securities, Ltd. Mike Connors, Director, Research Karen Mavec, Research
Koito Manufacturing Company, Ltd. Seiichi Yamaguchi, Executive Managing Di rector
LTX Company, Ltd. Eiji Nishi, Sales Manager
MITI Horoshi Shima, Industry Electronics Deputy Director
Marubeni Hytech Company, Ltd. Koichi Ando
Matsushita Electric Industrial Ccnnpany, Ltd.
Yoshiharu Kusuda, General Manager Junji Miyamoto, Supervisor, Marketing Engineer
Matsushita E l e c t r o n i c s Corporation Yoshiaki Shoji, Manager, Corporate Planning
Mitsubishi Electric Corporation Junsuke Amano, Managing Director, Semiconductor Division
Akira Katayama, General Manager, Overseas Marketing Department Fumio Suzuki, Assistant General Manager, Newer Metals & Product Department
Masao Yoshitomi, Manager, Semiconductor Strategic Marketing
Mitsubishi Electronics America, Inc. Dwain Aidala, Assistant General Manager Susan Aidala
Miyazaki Oki Denki K.K. Nakaharu Inoue, Manager, Product Division
Monolithic Memories Ray Gouldsberry, Director, Comnunications
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Park Drive / San Jose, CA 95131 / (408)971-9000 / Telex 171973
Monsanto Company Howard Thoele, Product Director Electronics
Mostek Japan K.K. Sadakiyo China, President
Motorola Semiconductor, Inc. Jean Suhner
Motorola, Inc. Ralph Greenburg, Manager, Marketing Statistics
Miriam Greenburg Dr. William Howard, Senior Vice President, Director of Research 8c Deve1opment
NEC Corporation Hidehiro Kunitomo, Supervisor, Chief Strategic Marketing Researcher
Shigeki Matsue, General Manager, Memory Products Division Tomihiro Matsumura, Senior Vice President Shinji Ohba, General Manager, International Electronic Devices Division Dr. Atsuyoshi Ouchi, Vice Chairman of The Board
Kunishiro Saito, General Manager, Electronic Devices Marketing Division Hajime Sasaki, General Manager, Microcomputer Products Division Kanji Sugihara, Assistant General Manager, Electronic Device Group Planning Office
Kazuo Suzuki, Assistant General Manager, International Electronic Devices Marketing
Naigai Kizai Kaisha, Ltd. Tadao Ohtsuka, President
Narumi China Corporation Kazuo Ohta, Director & General Manager
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
National Semiconductor Corporation Manher Naik, Director, Strategic Market ing Richard Sanquini , Vice President Microprocessors
National Semiconductor Japan, Ltd. Toshio Kurihara, Manager, Digital Marketing Wi11iam Watson, President
Nihon LSI Logic Corporation Keisuke Yawata. President k Chief Executive Officer
Nihon Teksel Company, Ltd. Muneyoshi Samejima, Vice President
Nikon (Nippon Kogaku) Shoichiro Yoshida, Director & General Manager, Industrial Supplies Sc Equipment Division
Nippon Dense K.K.
Nippon Kogaku K.K.
Akiro Itoh, Managing Director
Nobuo Nakamura, Managerial Staff Industrial Supplies
Nippon Megatest K.K. Minoru Takagi, President
Nippon Motorola, Ltd. Pat O'Malley, Manager, Strategic Marketing
Nissec, Ltd. Yoshikazu Hori, Director, Sales Division Manager KatsuftJini Ohmori, Marketing Manager
Nissei Sangyo Company, Ltd. Tsuyoshi Matsukvima, General Manager, Technical Marketing
Okamoto Machine Tool Works, Ltd. Kaoru Ishikawa, Sales Department Mi Ohio Kumazawa, Research Sc Development Department
Dataquest Incorporated, A Subsidiary of A.C. Nielsen CoInpany /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Oki Electric Industry Company, Ltd
Susumu Ichinose, Director, Marketing « Sales DiVIs1 on
Kazuo Shimizu, General Manager, Marketing Planning Department
Olympus Optical Company, Ltd. Hitomi Tojiki, Manager, Corporate Research Division, Semiconductor Sect ion
Osaka Sanso Kogyo, Ltd. Michael Solomon, General Manager Special Gases
Philips I.D.C.C, Peter Bacon, IC Sales & Marketing Manager , Far East
Prime Computer, Inc. Richard Battelle, Conmodity Specialist Electronic Components
RCA Corporation Wi 11ian Glaser, Manager, Market Development Robert Lenz, Administrator, Sales Analysis
SGS Semiconductor (PTE), Ltd. Antony Watts, Strategic Marketing Manager
Samsung Semiconductor Sc Telecommunications Company, Ltd.
S. H. Kim, General Manager, Planning Department
Sanshim Electronics Company, Ltd. Takeo Matsumoto, General Manager, Marketing
Seiko Instrviments & Electronics, Ltd. Kojiro Tanaka, System Department
Semiconductor Industry Association Michael Kubiak, Manager, Statistical Programs
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Shin-Etsu Handotai Company, Ltd. Shoichiro Ohga, Senior Managing Director Kihachi Temiura, President
Shinko Electric Company, Ltd. Taizo Abe, Director, Engineering Department
Sid Microelectronica, Ltda. Paulo Aratangy, Superintendent Director
Siemens AG Herbert Fenkhuber Dr. Kurt Garbrecht Detlef Nuglisch, Junior Director, Corporate Purchasing
Siemens Corporation Hans He in, Manager, Market Research
Siemens K.K. Albert Maringer, Manager, Product Planning
Sony Corporation Toshiyuki Yamada, General Manager, System LSI Project, Semiconductor Group
Sprague Japan, Inc. Akira Suzuki, General Manager
Sumitomo Eaton Nova Corporation Saburo Suzuki, President George Swanson, Vice President
Sumitomo Metal Industry Tomokatsu Nakamura, Manager
Suwa Seikosha Company, Ltd. Yoshinori Inoi, Director, Semiconductor Division
Takeda Riken Company, Ltd. Shimpei Kamata, Director, Research & Development Division
Teradyne K.K., Ltd. Richard Dyck, Representative Director
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Texas Ins t rvunents J apan , Ltd. Hideo Yoshizaki, Chairman of the Board
Tokyo Electron, Ltd. Ryoj1 Fujisawa, Managing Director Harry Horie, Manager, Semiconductor FA Sales Department
Takio Itoh, Manager, EC Marketing Eiji Kawamura, Managing Director
Tokyo Ohka Kogyo Co., Ltd. Hisashi Nakane, Director
Tokyo Sanyo Electric Company, Ltd. Masaaki Yamamuro, Sales Department
Toshiba Corporation Tsuyoshi Kawanishi, Director and Group Executive, Semiconductor Group
Keizo Shibata, Manager, Semiconductor Group
U.S. Department of Comnerce Richard May, Commercial Officer Clyde Prestowitz, Special Counsel to the Secretary of Japanese Affairs
United Microelectronics Corporation Robert Tsao, President
United Technologies C o r p o r a t i o n Bert Kehren, Director, Strategic Planning
Michael Michigarni , Director, Strategic Planning
Varian Associates Jon Tompkins, President, Semiconductor Equipment Group
Victor Company of Japan Shigenori Iwakuma, Manager, Research & Development Division
Wacker Chemicals East Asia, Ltd. Rokuro Ochi, General Manager, Planning Office
Western Digital Japan, Ltd. Saneetki Oshikoj i , President
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Dme I San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Dataquest
tfl
Dataquest
JAPANESE SEMICONDUCTOR INDUSTRY CONFERENCE SPEAKERS
Gene Norrett Vice President Dataquest Incorporated
Dr. Atsuyoshi Ouchi Vice Chairman of the Board NEC
Frederick L. Zieber Senior Vice President Dataquest Incorporated
W.J. Sanders III Chairman of the Board, President Chief Executive Officer Advanced Micro Devices, Inc.
Sheridan M. Tatsuno Research Analyst Dataquest Incorporated
Lane Mason Senior Industry Analyst Dataquest Incorporated
Tsuyoshi Kawanishi Director and Group Executive Semiconductor Group Toshiba Corporation
Shoichiro Yoshida' Director, General Manager Nikon (Nippon Kogaku)
Dr. William G. Howard Senior Vice President Motorola, Inc.
Clyde Prestowitz Special Counsel to the Secretary of Japanese Affairs U.S. Departmient of Commerce
Dr. P. June Min Senior Managing Director Goldstar Semiconductor and TeleccMmnunications
Dr. Irving T. Ho President Institute for Information Industry
D.A. DiLeo Product Marketing Manager - ICs AT&T Technology Systems
Hiroshi Shima Industry Electronics Deputy Director MITI
Richard L. Sanquini Vice President and General Manager Microprocessor Group National Semiconductor
Sutezo Hata Executive Managing Director Hitachi, Ltd.
Tomihiro Matsumura Senior Vice President NEC
Eugene J. Flath Vice President and Assistant General Manager Intel Corporation
Jon D. Tompkins President, Semiconductor Equipment Group Varian Associates
Osamu Ohtake Associate Director Dataquest Incorporated
Kihachi Tamura President Shin-Etsu Handotai Co., Ltd.
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Dataquest
WELCOME
Gene Norrett Vice President and Director
Japanese Semiconductor Industry Service Dataquest Incorporated
Mr. Norrett is a Vice President of Dataquest and Director and founder of its Japanese Semiconductor Industry Service. He specializes in the Japanese semiconductor market, focusing on analysis and interpretation of semiconductor statistics, with specific research into market forces, economic trends, and company portfolio analysis and strategies. Mr. Norrett is based in the Dataquest corporate headquarters, but directs a research staff in the Dataquest Tokyo office. Prior to joining Dataquest, Mr. Norrett spent 14 years with the Motorola Semiconductor Group, serving in various marketing and management positions. He was most recently Manager of Market Research, where he was responsible for research analysis of Motorola's and the world semiconductor industries' trends. In this capacity, he served as the company's representative to the Semiconductor Industry Association, and was Chairman of the Association's Trade and Statistics Committee. Mr. Norrett has traveled extensively in both Japan and Europe and has developed an awareness and thorough understanding of their semiconductor markets. His educational background includes a B.A. degree in Mathematics from Temple University, and an M.S. degree in Applied Statistics from Villanova University. He has also taken graduate courses in Marketing from Arizona State University.
Dataquest Incorporated JAPANESE SEMICONDUCTOR INDUSTRY CONFERENCE
April 14-16, 1985 Hakone, Japan
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Dataquest
THIS PRESENTATION WAS NOT AVAILABLE
IN TIME FOR PUBLICATION
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
(::>a Dataquest
Dataquest
WORLD SEMICONDUCTOR OUTLOOK
Frederick L. Zieber Senior Vice President
General Manager, Semiconductor Division Dataquest Incorporated
^..^^[Af^^K^Y'
Wf ^ (s^ffW^
Mr. Zieber is a Senior Vice President of Dataquest, a member of its Executive Committee, and the General Manager of its Semiconductor Division. The Semiconductor Division includes the Semiconductor Industry Service, the European Semiconductor Industry Service, the Japanese Semiconductor Industry Service, the Semiconductor User Information Service, and the Semiconductor Equipment and Materials Service. Mr. Zieber has 13 years experience in market research and consulting to the semiconductor industry, and previously worked in the semiconductor industry for nine years. He has experience in processing, designing, manufacturing, and testing integrated circuits and discrete devices. He holds two patents in semiconductor processing. Mr. Zieber has a B.S. degree in Electrical Engineering frtan Stanford University and an M.B.A. degree from the Graduate School of Business at Stanford University.
Dataquest Incorporated JAPANESE SEMICONLUCTOR INDUSTRY CONFERENCE
April 14-16, 1985 Hakone, Japan
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 RIdder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
^
V \
•s WORLD SEmCONDUCTOR
OUTLOOK
V
TZi.
Monday, April 15 FREDERICK L. ZIEBER Dataquest Incorporated
INDUSTRY OUTLOOK
- 1 -© 1985 Dataquest Incorporated April 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
BOOK/BILL RATIO 1984
1.5
0.5
JUL AUG SEP OCT NOV DEC JAN FEB MAR
WHY IS IT SO BAD? wwiIwwiriTIIiHwnigwwmBiTiwrMiffciwiiim
CONFLUENCE OF:
• TREMENDOUS CHANGE IN EXPECTATIONS
• OVERBOOKINGS
• WEAK PC MARKET
• HIGH PRICES, SET TO FALL
- 2 -© 1985 Dataquest Incorporated April 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 RIdder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
SEMICONDUCTOR MARKET GROWTH nfiTiw»M>niWTawmwiiT»i>r(i»iIi niiiiiIi»I»wIiI]IiIiJ
YEARS 64-67 67-70 70-75 75-81 81-85
GROW 64% 33%
155% 266% 130%
SH-BJNK (10%)
(25%)
(29%)
(10%)
(17%)
aiiirliiirffiTifil
THE DIFFERENCE IN THIS CYCLE: THE U.S. ECONOMY IS GROWING;
REAL SEMICONDUCTOR USAGE IS GROWING.
- 3 -© 1985 Dataquest Incorporated April 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Pari< Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
CAPACITY
CAPITAL SPENDING NORTH AyUUCA V t JAPAN
w n i0i«
ESS M
M$n 1171 WTt IMO
1=3
IW1 I t TIAM
4«»AM
- 4 -© 1985 Dataquest Incorporated April 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
mrmfamKtMM ttmJti nimm»
CAPACITY ISSUES
• 6-INCH WAFER
• 2-MICRON MINIMUM DIMENSIONS
• 24-HOUR FACTORY OPERATION
WAFER FAB COSTS PKH SQUAM MCM
ARXESCOST DMATSttALeOST
- 5 -© 1985 Dataquest Incorporated April 14 ed . -Reproduc t ion Proh ib i t ed
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
RETURN ON CAPITAL
HISTORICAL AND FORECAST CAPACITY UTIUZATION
- 6 -© 1985 Dataquest Incorporated April 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
WORLDWIDE SEMICONDUCTOR INDUSTRY GROWTH
(Percent in Dollars)
1984 1985 1986 1987
WORLDWIDE
U.S. JAPAN EUROPE ROW
47%
47% 48% 51% 48%
2%
-3% 7% 8% 0%
18%
16% 20% 18% 21%
24%
22% 26% 24% 27%
WORLDWIDE SEMICONDUCTOR CONSUMPTION
(Billions of Dollars)
1984 1989
WORLDWIDE $27.9 $59.9
U.S. 12.7 24.1 JAPAN 8.3 20.1 EUROPE 4.8 11.0 ROW 21.2 4.6
- 7 -© 1985 Dataquest Incorporated April 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
WORLDWIDE SEMICONDUCTOR CONSUMPTION (Percent by Region)
1984 1989
./ttl U.S. ^ JAPAN n EUROPE n ROW
WORLDWIDE SEMICONDUCTOR INDUSTRY AVERAGE GROWTH 1984 -1989
(Percent)
20
15
10
WORLD U.S. JAPAN EUROPE ROW
- a -© 1985 Dataquest Incorporated April 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
ESTIMATED QUARTERLY CHANGE IN U.S. SEMICONDUCTOR CONSUMPTION
Percent CMange
2{)
15
10
5
0
-5
10
2.2Z 1 1
Q1
17.4^
11.n 14.6;?
7.BZ
13.9 J!
D.U/
' •
(6.5;?)
Q2 Q3 Q4 Q1 Q2
II
Q3 Q4
1
ESTIMATED QUARTERLY CHANGE IN U.S. SEMICONDUCTOR CONSUMPTION
Percent Change
15
10
5
0
-5
-10
-15
13% _a^
6.0SE 7.72
3.7Z 4.7%
(6.5%)
(10.6;!!}
1984 -1985
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
- 9 -© 1985 Dataquest Incorpora ted Apr i l 14 ed. -Reproduct ion P roh ib i t ed
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
ESTIMATED U.S. SEMICONDUCTOR CONSUMPTION
(Millions of Dollars}
DISCRETE DEVICES
INTEGRATED CIRCUrTS
TOTAL
1983 1984 1985
$1,423 S 1.911 S 1.748
6.914 10.178 9.953
$8,337 $12,089 $11,701
ESTIMATED CHANGE IN U.S. SEMICONDUCTOR CONSUMPTION
Percent Change
60
50
40
30
20
10
-10
-20
34.33!
A7.ZX 45.0Z
1 • 1 I
f ? ? X ) r 1 *) y 1 I fc.&M ( \ U . i t £ 1
(8.52}
DISCRETE IC TOTAL DISCRETE IC TOTAL
1983 to 1984 1984 to 1985
fH^i^\^%_ U^ ^ ^h^:\^^^x^ f - 10 -
© 1985 Dataquest Incorporated April 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
SEMICONDUCTOR TECHNOLOGY TRENDS
AVERAGE PRICE PER FUNCTION (ICs) (Millicents)
1,000
100
10 74 76 78 73 80 81 82 63 84
jCpy^ jP^^i
- 11 -© 1985 Dataquest Incorporated April 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
<rFCTn3TTri;);wfHLJ?ftraTJ
COST MODEL
CURI^ENT FUTURE
MMMUM DIMENSION
WAFER SIZE
PROCESSNG COST
CHIP SIZE (MILS SQUARE)
YIELD
CHIP COST TO PRODUCT COST
3 MICRONS
4 INCH
$140
200
30%
4X
2 MICRONS
6 INCH
$220
250
50%
4X
ll^ict^^^ ^r^ J6 [ULIT^- ^K-^"^
^9 m-'-^^'F'/ & '- ktt-
COST MODEL
GOODDE
DECOST
FNSI^D PRODUCT COST
TRANSISTORS PER DE (OOO's)
COST PER TRANSISTOR
-S'/J Ji'^
CURRENT
100
$1.49
$5.60
60
9.3m4
r
FUTURE
200
$1.10
$4.40
211
2.1m^
'
- 12 -© 1985 Dataquest Incorporated April 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
TECHNOLOGY HAS A LONG, LONG WAY TO GO
• DENSITY
• YIELD
• PROCESSING
• COST
• ARCHITECTURE
• CMOS
• EPROM. EEPROM
• CAD
• ASIC'S
• PERFORMANCE
NO SLOWDOWN
INDUSTRY TRENDS
- 13 -© 1985 Dataquest Incorporated April 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
::aDataquest
-
Dataquest
JAPANESE SEMICONDUCTOR MARKET
Sheridan M. Tatsuno Research Analyst
Japanese Semiconductor Industry Service Dataquest Incorporated
Mr. Tatsuno is a Research Analyst for Dataquest's Japanese Semiconductor Industry Service. He is responsible for analyzing trends in Japanese government policies and financial markets. He is also responsible for analyzing technology trends within the industry, and specifically tracks R&D spending, patent applications, and new product developments quarterly. He has seven years of experience in market research, planning, and international finance with Bechtel and Woodward-Clyde Consultants. Mr. Tatsuno has a B.A. degree in Political Science from Yale University and a Master's degree in Planning and Policy Analysis from Harvard University's Kennedy School of Government. In addition to these credentials, Mr. Tatsuno is fluent in Japanese, French, and Spanish and has authored a book called "The TechnoPolis Vision; Japan's High-Tech Strategy for the 1990's and Beyond."
D;A { J ; ^ ^y^vX^-k^»v-^ ^T^j^A^ j;^^^^^t: ^
Dataquest Incorporated JAPANESE SEMICONDUCTOR INDUSTRY CONFERENCE
April 14-16, 1985 Hakone, Japan
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
JAPANESE SEMICONDUCTOR
MARKET
SHERIDAN TATSUNO April 15, 1985
- 1 -O 1985 Dataquest Incorporated April 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
- 2 -
O 1985 Dataquest Incorporated April 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
WORLDWIDE SEMICONDUCTOR REVENUES (Billions of Dollars}
40
30
20
10
15.0
5.2
34.3^
/ y
19.2
7.1
37.3^
28.6
11.3
39.4^
TOTAL
ALL OTHER COMPANIES
JAPANESE COMPANIES
1982 1983 1984
Source: DATAQUEST
- 3 -C 1985 Dataquest Incorporated April 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 RIdder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
30
25
20
15
10
5
0
WORLDWIDE IC REVENUES (Billions of Dollars}
10.7
3.4
32.4%
y 14.3
5.0
34.9^
/ /
/ /
22.3
8.2
36.8%
TOTAL
ALL OTHER COMPANIES
JAPANESE COMPANIES
1982 1983 1984
Source: DATAQUEST
- 4 -C 1985 Dataquest Incorporated April 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 RIdder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
TOP
RANKING 1984
1 2 3 4 5 6 7 8 9
10
1983
1 2 3 4 5 6 7 8 9
10
10 IC SUPPLIERS WORLDWIDE
COMPANY
Tl NEC MOTOROLA HITACHI NATIONAL INTEL FUJITSU TOSHIBA AMD SIGNETICS
TOTAL JAPANESE
MILLIONS OF DOLLARS
1984
$ 2,373 1,797 1,680 1,496 1,203 1,201 1,072 1,035
936 765
$13,558 $ 5.400
PERCENT CHANGE
552 642 461 642 392 552 772 692 852 762 432 672
Source: DATAQUEST
- 5 -O 1985 Dataquest Incorporated April 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
MOS MEMORY RANKINGS--
RANKING 1984 1983
1 1 2 3 3 2 4 5 5 7
COMPANY
HITACHI NEC Tl FUJITSU TOSHIBA NEXT 5 TOP 10
t JAPANESE
1984 REVENUES ($ Millions}
$ 897 713 693 512 396
1,575 $4,786
58.4%
1984
PERCENT CHANGE
79^ 108%
87% 84% 79% 48% 73%
90%
Source: DATAQUEST
- 6.-O 1985 Dataquest Incorporated April 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
MICRO RANKINGS--1984
RANKING
1984 1983
t 1 2 2 0 3 4 10 5 5
COMPANY
INTEL NEC MOTOROLA AMD MATSUSHITA NEXT 5 TOP 10
Z JAPANESE
1984 REVENUES ($ Millions)
$ 676 391 296 200 136 567
$2,266
38 .U
PERCENT CHANGE
69^ 65% 4 U
245^ 55% 29% 63%
55%
Source: DATAQUEST
- 7 -O 1985 Dataquest Incorporated April 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Connpany /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
MOS LOGIC RANKINGS--1984
RANKING 1984 1983
1 1 2 3 3 2 4 5 5 4
COMPANY
MOTOROLA TOSHIBA NEC NATIONAL AMI NEXT 5 TOP 10
t JAPANESE
1984 REVENUES ($ Millions)
$ 370 304 292 205 140 571
8 1,882
49.0^
PERCENT CHANGE
46^ 58^ 42% 66% 26% 56% 56%
58%
Source: DATAQUEST
- 8 -
O 1985 Dataquest Incorporated April 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
JAPANESE SEMICONDUCTOR INDUSTRY ACHIEVEMENTS
PERCENT
bO
40
30
20
10
n
^ .J.: i^^^^ja^B^^^S^WSs^^ji^S'^
2 OF ISSCC
••^-f^^^- WORLDWIDE ..•IIiny^P^ IC SALES
• • ' ' * ' ias;/
- ^ S N A R F OF U.S. 1 MARKET
1979 1980 1981 1982 1983 1984 1885
Source: DATAQUEST
- 9 -O 1985 Dataquest Incorporated April 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Parl< Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
NUMBER
40
30
20
10
THE BOOM IN JOINT VENTURES AND LICENSING
REVISION OF FOREIGN
INVESTMENT LAW
TOTAL (34)
LICENSING (22)
JOINT VENTURES (12)
0 i- '*^-'-^-^--^^"-^-1..-^,...^
70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 YEAR
Source: DATAQUEST
- 10 -O 1985 Dataquest Incorporated April 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
THE INVESTMENT BATTLE MILLIONS OF DOLLARS
600
NEC (521) FUJITSU (500) HITACHI (460) TOSHIBA (429}
MATSUSHITA (333)
Source: DATAQUEST
- 11 -O 1985 Dataquest Incorporated April 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
PERCENT
U.S.-JAPAN INVESTMENT AND WORLDWIDE MARKET SHARE
70
INVESTMENT rx OF SALES)
77 78 79 80 81 YEAR
82 83 84
Source: DATAQUEST
- 12 -C 1985 Dataquest Incorporated April 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.G. Nielsen Company /1290 Bidder Parit Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
1984 GOVERNMENT ACTION
• WORLD SEMICONDUCTOR TRADE STATISTICS (WSTS) PROGRAM i
• 4.2% TARIFF ELIMINATED
• U.S. CHIP PROTECTION ACT
• NTT PROCUREMENT AND JOINT R a D
• JAPAN PATENT OFFICE COMPUTERIZATION
- 13 -O 1985 Dataquest Incorporated April 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
EMGES
- 14 -
O 1985 Dataquest Incorporated April 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 RIdder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
1985 CHALLENGES
• OVERCAPACITY
• NEWCOMERS
• TRADE IMBALANCE
• MARKET OPPORTUNITIES
• 1985 CONSUMPTION FORECAST
- 15 -O 1985 Dataquest Incorporated April 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
ERCAPACITY
- 16 -O 1985 Dataquest Incorporated April 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
NEW PRODUCTION LINES IN JAPAN
FAB ASSEMBLY TEST
1983 1984
5 20 4 , 14 6 16
15 50
1985
12 5
10 27
TOTAL
. 37 23 32 92
Source: DATAQUEST
- 17 -C 1985 Dataquest Incorporated April 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
PLANNED NEW PRODUCTION LINES IN JAPAN
1963-1S85
KYUSHU HONSHU
SHIKOKU
- 18 -
e 1985 Dataquest Incorporated April 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
JAPANESE IC INVENTORY
MILLIONS OF UNITS 550
300 -
1982 1983 1384
Sourva: DATAQUEST
- 19 -O 1985 Dataquest Incorporated April 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
INVENTORY BUILDUP PERCENT OF PRODUCTION
ICs TOTAL SEMICONDUCTORS
10 11 12
Source: DATAQUEST
- 20 -O 1985 Dataquest Incorporated April 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
DRAM
SRAM
ROM
TIL
1984 PRICE DECLINES
PRODUCT
64K dSOns} 256K (150ns}
16K NMOS (16K X 1} 16K CMOS (4K X 4} 64K CMOS {8K X 8)
256K NMOS 1Mb ROM
• • •
7400 74 LS
Q1 84 vs Q1 85
-45% -60%
-25Z -24% -33%
-26% -52%
+ 22% + 22%
Source: DATAQUEST
- 21 -O 1985 Dataquest Incorporated April 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
EWeo^CRS
-Si.
- 22 -O 1985 Dataquest Incorporated April 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
NEWCOMERS-
COMPANY
SONY SUWA SEIKOSHA RiCOH PIONEER YAMAHA • MINEBEA LSI LOGIC JAPAN IMT
1984 SALES ($ Millions}
S177 136 32
6 21
m m
-JAPAN
KEY PRODUCT AREA
LINEAR ICs MOS LOGIC CMOS CUSTOM ICs GATE ARRAYS CMOS GATE ARRAYS MOS MEMORY GATE ARRAYS OPTO DEVICES
Source: DATAQUEST
- 23 -O 1985 Dataquest Incorporated April 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
COMPANY
DAEWOO GOLD STAR
HYUNDAI
SAMSUNG
NEWCOMERS-
( $
1884
Millions)
0 $15
"
0 $60
-KOREA
KEY PRODUCTS
QUIT TEMPORARILY BIPOLAR LOGIC,
MOS MEMORY,
CUSTOM IC MOS MEMORY, MPU
MOS MEMORY, MPU/MCU
KOREAN
ELECTRONICS $45 DISCRETES/BIPOLAR
Source: DATAQUEST
- 24 -O 1985 Dataquest Incorporated April 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
NEWCOMERS- -TAIWAN
COMPANY
ERSO
viTELic ; MOSEL QUASEL PRESIDENT
KUO HENG
FINE
PHOTRONICS
0/nc
1984 SALES ( $
$1
Millions}
/ ' * 0 0 0
$ 5
$11
$ 8
^zy i
(1982)
^5G
KEY PRODUCT AREA
MOS MEMORY, MCUs, TELECOM. LINEAR
CMOS DRAMS MOS CMOS DRAMS BIPOLAR,
DISCRETES. CMOS BIPOLAR, MOS.
DISCRETES BIPOLAR, MOS,
DISCRETES OPTO
Source: DATAQUEST
- 25 -O 1985 Dataquest Incorporated April 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Connpany /1290 Ridder Parl< Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
^IMBALANCE.
- 26 -o 1985 Dataquest Incorporated April 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A SubsidiaI^ of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
U.S. SHARE OF JAPANESE MARKET
BIPOLAR DIGITAL ($326 MILLION)
MOS LOGIC TOTAL IC LINEAR
MOS MEMORY
1882 1983 1984
Source: DATAQUEST
- 27 -O 1985 Dataquest Incorporated April 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
JAPANESE SHARE OF U.S. MARKET
MOS MEMORY ($1.4 BILLION)
TOTAL IC
MOS LOGIC BIPOLAR DIGITAL LINEAR
1982 1983 1984
Source: DATAQUEST
- 28 -O 1985 Dataquest Incorporated April 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
U.S.-JAPAN SEMICONDUCTORS TRADE IMBALANCE
BILLIONS OF DOLLARS
'3 2.5
2
1.5
1
0.5
0
0.5 -1
1.5
i m U.S.-JAPAN 1=1JAPAN-U.S. \Z3 U.S. BALANCE
—
1980 1981 1982
J
1983 1984
Source: DATAQUEST
- 29 -O 1985 Dataquest Incorporated April 14 ed.-Reproduction Prohibited
Dataquest incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
TRADE FRICTION OR OPEN MARKETS?
TRADE IMBALANCE
JAPANESE MARKET OPENING
• CHIP PROTECTION • IMPORT SURCHARGE • QUOTAS • BUY AMERICAN
• SEMICONDUCTORS • TELECOMMUNICATIONS • INDUSTRIAL
ELECTRONICS
- 30 -O 1985 Dataquest Incorporated April 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Ol^lPpRTUNlt
- 31 -O 1985 Dataquest Incorporated April 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Cooipany /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
JAPANESE MARKET OPPORTUNITIES BILLIONS OF DOLLARS
40
30
20
10
CONSUMER
io.1 TOTAL
4.72 SOUND
2.92
VIDEO 5.6%
INDUSTRIAL
291 TOTAL 15.02 INSTRUMENTATION
15.02 TELECOM
12.02
FA/OA 16.42
1984 1985 1984 1885
Source: DATAQUEST
- 32 -O 1985 Dataquest Incorporated April 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
HOT NEW MARKETS
CONSUMER i i .
1 '
OFFICE (OAJ
FACTORY (FA)
TELECOM
COMPACT DISC 8mm VTR j DIGITAL TV I SECURITY SYSTEMS MINI-FAX LAN (LOCAL AREA NETWORKS) WORD PROCESSING ENGINEERING WORKSTATION ROBOTS SENSORS FLEXIBLE MANUFACTURING SYSTEMS OPTICAL CONNECTORS DIGITAL PBX ELECTRONIC PHONO
- 33 -O 1985 Dataquest Incorporated April 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
EMERGING TECHNOLOGIES
• ORIGINAL CMOS MPUs/MCUs • GATE ARRAYS AND STANDARD
CELLS (ASICs) • APPLICATION-SPECIFIC STANDARD
CIRCUITS (ASSCs) • GaAs LASERS AND DIGITAL ICs • CCD PICKUP DEVICES • 3-D ICs AND CAD SYSTEMS • BIOELECTRONICS
- 34 -O 1985 Dataquest Incorporated April 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Parl< Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
- 35 -O 1985 Dataquest Incorporated April 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 RIdder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
PERCENT
15
10
5
0
-5
-10
-15
1985* SEMICONDUCTOR CONSUMPTION FORECAST
(% Change from Previous Quarter}
U.S. JAPAN ( •
( •
37
i
1,7
77
:t:-
S.&
£.1
L9
I 1
ao.bi d U ]
Q1
*CAL£MDfm VEAR
Q2 Q3 Q4 Q1 Q2 Q3 Q4
Source: DATAQUEST
- 36 -O 1985 Dataquest Incorporated April 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
PERCENT
1985 SEMICONDUCTOR CONSUMPTION FORECAST
{% Change from 1984)
0.9
I J .
U.S. JAPAN ia3
»2i
i £
iZ.2)
7,1 11
0.7
7.0
1111)
ai 02. 03 01 TOTAL Q i 02 03 Q1 TOTrtL
Soutte: DATAQUEST
- 37 -O 1985 Dataquest Incorporated April 14 ed.-Reproduction Prohibited
Dataquest Incorporated , A Subsidiary of A.C. Nie lsen Company / 1 2 9 0 Ridder Park Drive / San Jose , CA 95131 / (408) 971-9000 / Telex 171973
JAPANESE SEMICONDUCTOR CONSUMPTION
TRILLION YEN
2.5
2
1.5
1
0.5
^ 51 . e ^ , . - - ^
1.3 0.4
0.9
^ - ^ 3 7 ^ 7 ^ , ^ - ^
57.52
2.0
0.5
t.5
^n^^-"'*^^
2.1
0,5
1.6
' TOTAL 7.0%
DISCRETE -2.62
ICs 10.4%
1983 1984 1985
Source: DATAQUEST
- 38 -O 1985 Dataquest Incorporated April 14 ed . -Reproduc t ion Prohibi ted
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
1985 CONSUMPTION FORECAST
(Millions of Dollars) i
t [. U.S. Q1 Q2 Q3 Q4
DISCRETE $ 425 $ 429 $ 443 $ 451 •C 2.301 2,388 2,517 2.737 TOTAL $2,726 $2,827 $2,960 $3,188
JAPAN
DISCRETE $ 452 $ 461 $ 489 $ 531 'C 1,452 1,480 1,569 1,709 TOTAL $1,904 $1,941 $2,058 $2,240
TOTAL
S 1,746 9,953
$11,701
$1,933 6.210
$8,143
PERCENT GROWTH
-8.5 -2.2 -3.2
-2.6 10.4 7.0
- 39 -
O 1985 Dataquest Incorporated April 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
MARKET STATUS--SUMMARY
• INVENTORIES GROWING • COMMODITY PRICES COLLAPSING • SHIFT TO ASICs AND ASSCs • ENTRY OF NEWCOMERS • TRADE IMBALANCE ACCELERATING • GROWING TELECOMMUNICATIONS AND
OA MARKETS • GROWTH IN CHINA AND OTHER ASIAN
NATIONS
- 40 -
O 1985 Dataquest Incorporated April 14 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
.KES^T^ Dataquest
Dataquest
CONCENTRATED OR WELL-BALANCED PRODUCTS STRATEGY?
Tsuyoshi Kawanishi Group Executive, Semiconductor Group
Director of the Board Toshiba Corporation
Mr. Rawanishi is Group Executive, Semiconductor Group, and Director of the Board of Toshiba Corporation. He started his career as a production engineer at Toshiba's Transistor Works (now the Microelectronics Center), and has spent his career at Toshiba in the development of its semiconductor business. He has served as Assistant Group Executive of the Semiconductor Group, General Manager of the Transistor Works, General Manager of the Ohita Works, and Manager-Production Engineering of the Ohita Works. Mr. Kawanishi received a Bachelor of Engineering degreee in Electrical Engineering from the Tokyo Institute of Technology.
Dataquest Incorporated JAPANESE SEMICONDUCTOR INDUSTRY CONFERENCE
April 14-16, 1985 Hakone, Japan
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Introduction
Semiconductors are the growth industry of the future, not
only as the so-called:;^VJ^ce of industry^' but as the driving
force behind electronics and the information revolution that
will open the way to the 21st century.
At the same time, no industry gives executives as many
ulcers.
(1) Supply and demand fluctuations are violent.
(2) Technological advance is rapid.
(3) Massive capital investment is required.
(4) Multi-spectrum technological support is required.
(5) Price reductions over time are the norm.
For these reasons, a sound operational strategy is vital,
and is directly reflected in a semiconductor firm's fortunes.
I would like to discuss the strategy for semiconductor business-
concentrated product line or balanced product line strategy.
1. The Semiconductor Market and Industrial Groups
A. Scales of various markets
The semiconductor industry is global, comprising several
large markets such as for discrete and bipolar devices, memory
chips, and logic circuits. This is summarized in Figure 1.
Every company in this industry is competing each other for a
- 1 -
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stronger position in the market based on its own specific
Strategy.
B. Leading industrial groups and characteristics
Semiconductor manufacturers can be broadly divided into
two types: concentrated and well-balanced. Both types include
top-class firms, as listed in Figures 2 and 3.
I would like to consider which strategy is better in the
medium- and long-terms.
2. Merits and Demerits of Both Strategies
The two Strategies have various strengths and weaknesses.
The advantages of one are usually the disadvantages of the other
A. Concentrated strategy
The major strength of the concentrated strategy is that it
allows focused capital investment without distraction from
diverse goals. A direct result is a clear industrial image.
Also, high growth can be expected when demand for the focused
specialty line is high.
The related weakness is that the firm's performance is
vulnerable to the market growth rate and price fluctuations in
the specialty, leading to a less stable operational stance.
Development of products in a high-growth field is capital
- 2 -
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intensive, but as all fixed expenses must to be absorbed by
that same concentrated field the company's financial options
are few. This, in turn, reduces funds available for developing
new products and lines. The concentration also limits spin-ojj
applications from other product technologies.
From the customer's viewpoint, service problems arise if
the chips in a given product have to be obtained from more than
one manufacturer.
7 ^ B. \ Well-balanced strategy/ \-
The major strength of the well-balanced or broad product
range strategy is that profitability is spread and gives greater
operational stability. Annual sales growths of transistors,
rectifiers, logic and memory chips show inter-related market
fluctuations. As illustrated in Figure 4, when memory and logic
device growth slows, transistors pick up, while rectifiers remain
Steady.
Figure 5 shows price variation. Prices for memories and
microprocessors drop sharply, and those for Switching-Diode and
logic devices more slowly. \
Thus, a firm with various product lines that react \
differently in the market is better able to respond to /
fluctuations, and is more stable.
- 3 -
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( ^ The second strength is that a wide array of products from
discrete devices to memories allows customers to procure all
the chips for a given product from one source. A breakdown of
the types and quantities of semiconductors used in representative
equipment reveals that a wide range of products from transistors
to LSIs is common/ as shown in Figure 6.
2,\ The third advantage is that technical cross-over and spin
off effects are greater. Figure 7 shows some examples between
memory, logic, BiP-ICs, and discrete devices. To simplify, the
many technologies in semiconductor manufacturing continue to be
cross-supportive. The basic materials technology and individual
circuit characteristics developed for discrete devices are
applied in ICs, while IC production leads to advances in micro-
fabrication and production technology. These technologies will,
in turn, provide a solid foundation when venturing into a new
field or product line.
i_i\ The fourth strong point of a well-balanced product strategy
is that capital investment in high-growth fields can be dispersed. ®
which promotes stable financial management.
At the same time, the strategy has its weak points,
mirroring the strengths of the concentrated strategy.
C ncgjitrated capital investment is difficult, and the corporate
image is less clear.
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
3. Example of a Well-balanced Strategy
Toshiba upholds a well-balanced philosophy in its basic
operation l_,s.trafeegy"; * —
A. Toshiba semiconductor product lineup
Distribution of Toshiba semiconductor products is almost
equally divided among discrete devices, bipolar circuits, logic
chips, and memories. As shown in Figure 8, the product line
appears to be well-balanced, which is the result of continuous
intense product assessment.
B. The key to success
The basic requirement for a well-balanced product line is
accurate analysis of market conditions, and preservation of
balance within the line. This requires a full understanding of
the features of the many products involved. In other words,
the returns, in sales and profit terms, on investment must be
considered carefully for each product, and investment and
manufacturing decisions taken accordingly to lead to optimization.
The first criterion is the ratio of capital investment to
sales. Figure 9 compares the capital investment required for
various product groups to give an equal sales volume. It is
Clear that returns are higher on discrete devices and logic
chips than for memories.
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Next, the research and development investment ratio in
Figure 10 shows that discrete devices and bipolar chips produce
higher returns than memory devices.
Likewise, the sales volume per researcher varies with each
product group, as Figure 11 indicates.
In all cases, the rapid advances in memory chip technology
require more capital for facilities, research and development,
and research personnel, and less for the mature discrete device.
For bipolar ICs, technological progress in micro-fabrication
has called for state-of-the-art production facilities, while
the maturity of the technology itself has reached the point
where investment in research personnel is modest. For logic
chips, on the other hand, technological advances opening the
custom market have boosted research and development costs,
whereas investment in production facilities is still relatively
low.
The key to a successful well-balanced product strategy is
a firm grasp of all these aspects, and sound decisions on
capital investment in continuing high-growth product areas,
such as memory chips.
Another critical factor is a broad fundamental technology
base, which gives spin-off and technical cross-over benefits.
Each item in the Toshiba product line is supported by various
basic technologies. As shown in Figure 12, there are the
- 6 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
production and power technologies for discrete devices, CMOS
technology for LSIs, and bipolar linear technology in consumer
products.
The mutual reinforcement of the specific technologies used
leads to new items such as a Bi-CMOS and Super Integration, and
makes the well-balanced strategy even more effective.
4. Why a Well-balanced Product Strategy?
The semiconductor market varies greatly by product group
in growth fluctuations and returns on investment in manufacturing
facilities, research and development, and research personnel.
From the operational standpoint, each has its strengths and
weaknesses, but the basic managerial precept remains minimizing
risk and sustaining a stable business performance. This is the
core of Toshiba's well-balanced product strategy.
The semiconductor market will continue shifting from devices
to systems, leading to further customization of ICs, as illustrated
in Figure 13.
It is already possible to concentrate an entire system
into a single chip for watches and calculators, and now single-
chip televisions are close to commercialization. Accordingly,
semiconductor manufacturers must be able to respond instantly
to user requirements. Production of a full array of
- 7 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
semiconductors by a single manufacturer is essential for
single-source supply for a given product, and also for the
reduction of multiple semiconductor products to a single chip.
Thus the well-balanced product strategy fits the requirements
Of the full-range electrical manufacturer with a total systems
approach.
5. Final Decisions
Every industry and firm has its own history and special
characteristics, which are inevitably reflected in their product
strategies. Toshiba has a basic background of discrete and
bipolar device development, and VLSI technology gained primarily
from CMOS semiconductors. We consider that the best strategy
for the future is the intensive development of high-growth
products that can effectively and interactively utilize these
basic technologies. To rephrase slightly, Toshiba believes a
concentrated in-depth device selection based on a well-balanced
product line is essential to staying ahead.
#»#
- 8 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
IVIARKET SCALE BY PRODUCTS (WORLD PRODUCTION)
1$83
$ 187 Billion
1987 E
$ 41.1 Billion
T O S H I B A I B A —*
Memory
CONCENTRATED
Bipolar
T /
*" / - " '
"^'Cn ' ^ \ ^ ~ ~ - ^
" . ^
A Lo
Lso
h
J '
- 50
gic
GROUP
1
50
Share {%)
— ^ - ^ T O S H I B A ^
- 9 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Memory 50 1
BALANCED GROUP
Bipolar
51}
J>^^ N > ^ 50
^w \
-
/-^Z / / • / '
V T
50
Logic
Share (%)
_ rII5(;
——~^-^— T O S M I O A - ^
LAG IN DEMAND FLUCTUATION BY PRODUCT
(%)
100
50
0
J. Memory
MijL / " ^ j-^ Logic
\ y ' \ ^ ^ ^ ' ~~ HeCtIIIBf
'80/4 '81/4 '82/4 '83/4
(Year/Year chan
T
96%)
O S H I B A —
- 10 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
INDEX MARKET PRICE DETERIORATION BY PRODUCT
{ • s n / . a - 1 0 0 )
(%) TOO
S O
7 0
O l ^ ^ - - ^ ° -
-N.-~-
1 S W - O i
• ^ — _ C M O S -t - O Q l C
R M o t o - C o u f D l o r
( S>t i f s m o o t h a s o )
S e i l f ^ ^ f U
t ' 6 4 K
D R A lV I
( V e a r )
• 8 5 / 1
T O S H I B A
NUMBER OF PARTS USED IN TYPICAL END PRODUCT
C-TV
VCR
Personal / ^ ^ computer ,
Main frame
Auto mobile ^ ^ ^ ^
Disc
45
190
187
22,240
34 S
Bipolar
3
25
49
3,000
45
IVIemorv
I
0
5!
36,000
4
Logic
4
10
117
50
77
' T O S M I B A .
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Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
INTERACTION OF TECHNOLOGIES
Hi. speed tech.
CMOS processing
VL processing
CAD
Prod, tech
Materials & basic tech.
HF processing
VL procesiting
T O S H I B A •
TOSH
/ Logic
ri^^ \ Memory
BA'S PRODUCT M I X
Disc \
7p \
\ Bipolar /
1 1 ' > - ^ FY 1984 _ 1 Sales 440 Billion Yen
^^•^^-^~^^—^-^^—^-^.m~— T O S M I B A -
- 12 -
Dataquest Incorporated, A Sutisidiary of A.C. Nielsen Connpany /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
COST EFFECTIVENESS OF INVESTMENT
Disc
Bipolar
jB | [ | f f l | n n n
SI I iml I fcialj ICEI Iln31 IllcXjl I I I L I I U I
Jffl ITffl [fe [Tffl [ p
0 s;<;=i
Memory
MJlra Qs n 1
a! 11 on J 11^1 ToCl I I rn j I U^^l IJ*^ I LI ^ M m I
Logic
JEB I ffl Uffi Iffi Iffl
• TOSMJBA '
R & D EFFECTIVENESS
(Memory = 100%)
I 100 . 200 300 4QQ;%)
Memory
DIS
Relative sales per unit of R&D
(Sales/R&OI
T08>-<ISA •
- 13 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
COST EFFECTIVENESS OF ENGINEER
Sales per engineer (Memory = 100%)
(T
Memory Logic Bipolar Disc
• T O S H I B A '
TECHNOLOGIES AND PRODUCT SUPPORTING BALANCE
•
. Disc
Bipolar
Memory
Logic
Pw - Device Opto - Device
Bipolar - Linear LSI Bi-CMOS Technology
DRAM (256k. 1M) EP-ROM (256k, 128k) S-RAM (64k, 256k)
CMOS Technology Gate Array, Super Integration
T O S H IBA
- 14 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
MULTIPLE IC PRODUCT OPTIONS
Electronic Calculator
• T O B M I B A '
- 15 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 RIdder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
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- 3 -
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Dataquest
#
TECHNOLOGY FUTURES
William G. Howard, Jr. Senior Vice President
Director of Research and Development Motorola, Inc.
Dr. Howard is Senior Vice President and Director of Research and Development at Motorola, Inc. He has held a variety of managerial positions at Motorola in the linear integrated circuits area. Before his previous position, he was Vice President and Director of Technology and Planning for Motorola's Semiconductor Products Sector. Dr. Howard holds three patents, has published 10 papers on various subjects, and is co-author of the book, Basic Integrated Circuit Engineering. Dr. Howard is a member of the National Academy of Engineering of the United States of America, IEEE, Sigma Xi, Tau Beta Pi, Eta Kappa Nu, and Phi Kappa Phi professional societies. He has also served as the chairman of the U.S. Department of Commerce's Semiconductor Technical Advisory Committee and is now chairman of the Advisory Group on Electron Devices, Working Group B, of the Department of Defense. Dr. Howard received bachelor's and master's degrees frcan Cornell University. He also worked as assistant professor of engineering and computer sciences at the University of California at Berkeley, where he earned his doctorate.
Dataquest Incorporated JAPANESE SEMICONDUCTOR INDUSTRY CONFERENCE
April 14-16, 1985 Hakone, Japan
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Dataquest
THIS PRESENTATION WAS NOT AVAILABLE
IN TIME FOR PUBLICATION
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
iXiDataquest
Dataquest
GOVERNMENT INVOLVEMENT: HELP OR HINDRANCE?
Clyde V. Prestowitz, Jr. Counselor to the Secretary of Commerce for Japan
International Trade Administration U.S. Department of Commerce
Mr. Prestowitz is Counselor to the Secretary of Commerce for Japan in the International Trade Administration of the U.S. Department of Commerce. In this position he is the principal policy advisor to the secretary on all aspects of commercial relationships between the United States and Japan. He also advises the under secretary for international trade and the assistant secretary for international economic policy. Prior to joining the Commerce Department, Mr. Prestowitz was affiliated with Prestowitz Associates, a consulting and import/export group based in New Caanan, Connecticut. Previously, he was associated with the American Can Company, Egon Zehnder International Consulting in Japan, and the Scott Paper Company. He also served as a foreign service officer in Washington D.C. and Holland, and worked as a newspaper reporter. Mr. Prestowitz received a B.A. degree fr( n Swarthmore College, M.A. degrees from the East-West Center of the University of Hawaii and from Keio University in Tokyo, and an M.B.A. degree from Wharton School of Finance. He is fluent in Japanese, Dutch, German, and French.
Dataquest Incorporated JAPANESE SEMICONDUCTOR INDUSTRY CONFERENCE
April 14-16, 1985 Hakone, Japan
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
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THIS PRESENTATION WAS NOT AVAILABLE
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Dataquest Incorporated, A Subsidiary of A.C Nielsen Company/ 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
(fDaDataquest
Dataquest
THIS PRESENTATION WAS NOT AVAILABLE
IN TIME FOR PUBLICATION
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Dataquest
Dataquest
SPEECH TITLE TO BE ANNOUNCED
D.A. DiLeo Product Manager, Integrated Circuits
AT&T Technology Systems
Mr. DiLeo is Product Manager for Integrated Circuits at AT&T Technology Systems. His responsibilities include satisfying internal AT&T and merchant market segments. Products into these markets include custom ICs, memory, microprocessors, codecs, telecommunications, and information processing applications for large systems and consumer products. Mr. DiLeo is also a council member of the Joint Electronic Device Engineering Council (JEDEC) and several professional engineering associations. In addition to undergraduate and graduate engineering degrees and executive M.S.A. accomplishments, Mr. DiLeo holds several patents in microelectronic device design and fabrication techniques.
Dataquest Incorporated JAPANESE SEMICONDUCTOR INDUSTRY CONFERENCE
April 14-16, 1985 Hakone, Japan
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Parl< Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
AT&T Slide 1
C 1985 AT&T lt:i inoloijicfi In,
AT&T 1984 COMPONENT SALES
© 198S AT4T Technologies Inc
Slide 2
- 1 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
MARKET FORCES
• Worldwide Deregulation
• Globalization
• Technology Impact
© I9S5 AT«T Technologies Inc
Slide 3
CUSTOM MOS INTEGRATED CIRCUITS
O 1085 ATftT Technologies Inc
Slide 4
- 2 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
SILICON CONTENT IN TELECOM EQUIPMENT
Relative Content
Slide 5
Slide 6
1985 AT&T Technologies Inc
- 3 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
CUSTOM EXAMPLE 10 Custom Chips
Board Reduction
Parts Reduction
Power Reduction
Cost Reduction
8:1
10:1
>2:1
4:1
Slide 7 ® 198S ATCT Technologies Inc
Slide 8
- 4 -
Dataquest Incorporated, A Sut)sidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
aides
AT&T DESIGN RULE PROGRESS Average Poly, Window. & Metal Features
Design Rules
Microns
C 1985 AT&T Tof •l•^.^lf^ti,,.-. |.>.
Slide 10
- 5 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
AT&T DESIGN RULE PROGRESS CUSTOM MOS
Typ. Unloaded Gate Delay
Design Rules -Microns
© 1985 AT4T Technologies ino
Slide 11
AT&T CUSTOM COMPLEXITY
TRANSISTORS/ CHIP
120K
100K -
80K --
60K -
40K -
20K -
1974
Slide 12
1984
(0 1965 AT&T Tectmotogies inc
- 6 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
WHY CUSTOM
Lower Cost
More Functionality
Higher Density
Lower Power
Design Security
Slide 13 © 1985 AT4T Technologies Inc
MERCHANT CUSTOM MARKET
$ Millions
Slide 14
1.400
1,200
1,000
800
600
4OO
200
Standard Cell
Gate Array
Full Custom
(Source: Electronics) O 19SS AT&T Technologies Inc
- 7 -
Oataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose. CA 95131 / (408) 971-9000 / Telex 171973
CHIP PHOTOGRAPH
Slide 15
AT&T COI^MUNICATION DEVICES
• Network - CODECS - T l Interface - ISDN Basic Access
• Data Communications - Modems - Protocol Controllers - Data Encryption Processors
• Signal Processors - DSPs - Speech Circuits - Microprocessors/Computers
© 1985 AT4T Technologies Inc
Slide 16
- 8 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
AT&T FUTURE CUSTOM
ISDN Bas ic
Access
Signal
Processing
CODECS
Integrated System
on a Chip
Protoco l
Contro l lers
Slide 17 C iflHS rtTST T..
GLOBAL AT&T
Slide 18 1985 AT&T Technologies inc
- 9 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
DaDataquest
Dataquest
FUNDAMENTAL FORCES DRIVING THE 32-BIT MPU MARKET
Richard L. Sanquini Division Vice President Microprocessor Group
National Semiconductor Corporation
Mr. Sanquini is Division Vice President of the Microprocessor Group at National Semiconductor Corporation. He has worked for 24 years in the semiconductor industry at both RCA Solid State Division and National Semiconductor Corporation. For the last seven years he has been directing National's microprocessor business. His responsibilities have included the development and introduction of National's Series 32000 family, the industry's first commercially available 32-bit microprocessor. Mr. Sanquini received a B.S.E.E. degree from the Milwaukee School of Engineering and did graduate work in engineering at Columbia University. He has taught semiconductor courses at the University of Michigan and has published 21 papers on integrated circuits.
Dataquest Incorporated JAPANESE SEMICONDUCTOR INDUSTRY CONFERENCE
April 14-16, 1985 Hakone, Japan
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
FUNDAMENTAL FORCES DRIVING
THE 32-BIT MPU MARKET
R. L. SANQUINI VICE PRESIDENT
MICROPROCESSOR DIVISION NATIONAL SEMICONDUCTOR CORR
2 National Semiconductor'
"CURRENTLY PREVAILING VIEWS ABOUT THE FUTURE DEMAND FOR HIGH POWERED COMPUTATIONAL ELEMENTS ARE SOMETIMES MISGUIDED.
ONE SUCH MYTH SAYS THAT THE DEMAND FOR 32-BIT (OR LARGER) PROCESSORS IS LIKELY TO BE LIMITED, BECAUSE MOST APPLICATIONS DO NOT NEED SO MUCH COMPUTATIONAL POWER.
WHAT THIS PROJECTION FAILS TO CONSIDER IS THE COMPUTATIONAL NEED FOR ERROR-TOLERANCE AND USER FRIENDLINESS THAT ARE ESSENTIAL IF WE EXPECT ORDINARY MORTALS TO USE TOMORROW'S MICROCOMPUTER EFFECTIVELY" . . . RAJ REDDY
a National Semiconductor
- 1 -
LMrisii-1
.4::
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
32-BIT MICROPROCESSORS
MORE PERFORMANCE
PER PRICE
PER UNIT OF AREA
(PERFORMANCE/PRICE/AREA)
2 National SemiconductDr <
PRODUCTIVITY IMPROVEMENT
PERFORM MORE TASKS IN PARALLEL
REDUCE NON-PRODUCTIVE PERIODS
MINIMIZE THE OVERHEAD
a Nf^lonal Semiconductor <
- 2 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
32-BIT TECHNOLOGY CONTRIBUTION
ENHANCE EXISTING APPLICATIONS
MAKE POSSIBLE DESIRED APPLICATIONS
CREATE NEW APPLICATIONS
' a National Semiconductor —
PRODUCTIVITY IIMPROVEIWENT AREAS
INDUSTRIAL INTEGRATION
2 National Semiconductor < LWIi)1'I
- 3 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
THE LAB & OFFICE
PROJECT/DEPT 1 PROJECT/DEPT.
• DESK TOP
NETWORK
1 J
^ y<=>y<=>,.^fs^ • ^^^^^ p . IMANUFACTURING
FILE SERVER 2- DATA CENTER
S National Semiconductor'
THE MANUFACTURING
LtNEI LINEj
£ ROBOTS hIACtlINE TOOLS
NETWORK
3 3
^<=i^<=.y. DATA UNKS OFFICE LAB
SATELUTE PROCESSOR
I National Semiconductor — ^ ^ - ^
DATA CENTER
- 4 -
Dataquest I nco rpora ted , A Subsidiary of A.C. N ielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Te lex 171973
32-BIT CONTRIBUTION AREAS
TODAY
3M1 — DESK TOP/ENG. WORKSTATION/ ROBOTICS
3M10 — FILE SERVER/SATELLITE PROCESSOR
— COMMUNICATION/NETWORK/ DATA LINK
a National Semicondiictor <
32-BIT MICROPROCESSOR APPLICATIONS
THE "DESK TOP" — 3M1
FEATURE REQUIREMENTS
MULTITASKING MULTIFUNCTION NETWORKING GRAPHICS "CUBIC FEET"
I National Semiconductor <
- 5 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 RIdder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
32-BIT MULTI-MICROPROCESSOR APPLICATIONS
THE FILE SERVER — 3M10
10 MIPS 10 MPfXEL 10 MOrTE
FEATURE REQUIREMENTS MULTIPORT MULTIPROCESSORS DATA BASE HIGH-SPEED DATA LINK "CUBIC FEET" ERROR-TOLERANCE
a National Semiconductor <
32-BIT MICROPROCESSOR APPLICATIONS (UNITS)
OTHERS 2m TELECOM, MIL, ETC.
1985
OWPC 32,7*i
CAD/CAE Z4.8U
CAM/RDBOnCS l l . m
SOURCE: DATAQUEST 10-1S-S4
a National SemlconductDr <
- 6 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
32-BIT MICROPROCESSOR APPLICATIONS (UNITS)
1990
SOURCE: DATAQUEST 10-15-84
I National Semiconductor '•
OA/PC WVi
OTHERS 4K
CADICAE m
CAM/ROBOTICS 4 ^
LN/1S11-1
32-BIT MICROPROCESSOR APPLICATIONS
TOMORROW — ARTIFICIAL INTELLIGENCE
Ai REQUIREMENTS FOR FUTURE 32-BIT PERFORMANCE
VISION 100 MIPS
NAVIGATION & MOBILITY 1,000,000 MIPS MANIPULATION SPEECH & LANGUAGE SEARCH CONDITION — ACTION
100 MIPS
1,000 MIPS 5,000 MIPS
100,000 MIPS
- 7 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
32-BIT MICROPROCESSORS
KEY EVALUATION FACTORS
• SOFTWARE AVAILABILITY & EFFICIENCY
• COMPLETENESS OF THE HARDWARE CLUSTER
• SYSTEM PERFORMANCE
• SYSTEM PRICE
• TIME TO MARKET
• SUPPLY RISKS
I National SemlcondtictDr ' kNM931-t
32-BIT MICROPROCESSORS
KEY EVALUATION FACTORS
SOFTWARE AVAILABILITY & EFFICIENCY
COMPLETENESS OF THE HARDWARE CLUSTER
SYSTEM PERFORMANCE
SYSTEM PRICE
TIME TO MARKET
SUPPLY RISKS a National SemiconductDr'
- 8 -
Dataquest Incorporated, A Subsidiary of AC. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
32-BIT MICROPROCESSORS — SOFTWARE
• SUPPLIED BY MPU VENDOR
• CONVERSION OF MINI & MAINFRAME BASED SOFTWARE
• DEVELOPED BY ISV AS A RESPONSE TO MARKET DEMAND
• DEVELOPED ON A PARTNERSHIP BASE
• DEVELOPED BY USERS I National SemicondiA tor ^ ^ — ^ - — ^ — » « — i ^ - ^ ^ - ^ — . ^ - ^ ^
32-BIT MICROPROCESSORS
SOFTWARE — WHERE'S IT COMING FROM?
A. OPERATING SYSTEM — UNIX
B. LANGUAGES & SOFTWARE ENGINEERING TOOLS
C. APPLICATION SOFTWARE
a National Semlcondix tDr
I.M/1S31.I
- 9 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
32-BiT MICROPROCESSORS
SOFTWARE — UNIX
• "DE FACTO STANDARD" — PORTABLE
• PROVIDES ALL REQUIRED SUPPORT FUNCTIONS FOR 3M1 & 3M10
• DEMANDS 32-BIT "POWER & TORQUE"
a National Semicondiictor'
32-BIT MICROPROCESSORS
KEY EVALUATION FACTORS
• SOFTWARE AVAILABILITY & EFFICIENCY
• COMPLETENESS OF THE HARDWARE CLUSTER
• SYSTEM PERFORMANCE
• SYSTEM PRICE
• TIME TO MARKET
• SUPPLY RISKS
I National Semiconductor ~
- 10 -
Dataquest Incorporated, A Subsidiary of AC. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
32-BIT MICROPROCESSORS
HARDWARE CLUSTER
C COMPUTING CLUSTER BUS ] • UNIX EFFICIENT -^ PERFORMANCE
• COMPLETENESS — PRICE, TIME TO MARKET/CUBIC FEET
• UNIX/CLUSTER INTEGRATED -* RELIABILITY, TIME TO MARKET
a National Semiconductor' LWIUt-l
32811 MICROPROCESSOR FORECAST TAM ($ MILLION)
1000
900
800
700
600.
500
400
300
200
100
0
r 32-BIT COMPUTING CLUSTERS
/
/
^ r 32-BIT ^ CPU ONLY
^ ^ (OATAQUESTI
— ^ I I I ,
1984 1985 198B 1987 19SB 1983 1990
- 11 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
32-BIT MICROPROCESSORS
KEY EVALUATION FACTORS
• SOFTWARE AVAILABILITY & EFFICIENCY
• COMPLETENESS OF THE HARDWARE CLUSTER
• SYSTEM PERFORMANCE
• SYSTEM PRICE
• TIME TO MARKET
• SUPPLY RISKS I National Semiconductor ^ — ^ — — ^ ^ — i ^ ^ ^ — ^ ^ ^ ^ - ^ ^ ^ ^ — ^ ^ ^ ^
32-BIT MICROPROCESSORS NEW CRITERIA FOR MEASURING
MICROPROCESSORS
SYSTEM PERFORMANCE = CPU PERFORMANCE X EFFICIENCY
3C=
fg^^xxxxxa
EFFICIENCY
I National SemicondiK^
. ^ S ^ S ^ ^
ENGINE POWER ~ FRICTION LOSS ENGINE POWER
- 12 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
32-BIT MICROPROCESSORS
SYSTEM PERFORMANCE WArr
STATES
CLusren
'"" Cv'
< ^
™ O
i WAIT
STATES
WAIT STATES
o^a ! A - K J CACHE l/LA,i I v v l ""TRoi xj-y I
A-N W MEIHORY
A K DISKS { ) GRAPHICS N K COMM
A K PROCESSOR ( ; CLUSTER N — K I=1...n
CPU — "MIPS" X EFFICIENCY = SYSTEM — "MIPS' I National Semiconductor —i
32-BIT MICROPROCESSORS "STAND-ALONE" CPU DESIGN
SYSTEM PERFORMANCE BEHAVIOR
15IM
^om
sm
FREOX-fS im
FREQX ,•
• AFFER 2 WS THE 50% FREQ INCREASE LOSES ENTIRELY THE EXPECTED PERFORMANCE GAIN!
• AFTER 3 WS THE 2 CURVES ALMOST OVERLAP!
• AFTER 5 WS EFFICIENCY DROPS TO 50%!
"•"-fT X
± 3 4
WAIT STATES a National SemiconductDr •
- 13 -
Dataquesf Incorporafed, A Subsidiary of A C . Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
32-BIT MICROPROCESSORS
CPU DESIGN MUST BE PERFORMED AS AN INTEGRAL PART OF
— HARDWARE CLUSTER
— REAL SYSTEM NEEDS
— AVAILABLE SUPPORTING TECHNOLOGY (e.g. MEMORY, CACHE, etc.)
— SYSTEM SOFTWARE REQUIREMENTS
a National SemiconductDr'
32-BIT MICROPROCESSORS
KEY EVALUATION FACTORS
• SOFTWARE AVAILABILITY & EFFICIENCY
• COMPLETENESS OF THE HARDWARE CLUSTER
• SYSTEM PERFORMANCE
• SYSTEM PRICE
• TIME TO MARKET
• SUPPLY RISKS a National Semiconductor ^ — ^ ^ ^ ^ ^ • ^ ^ - ^ ^ ^ - ^ ^ ^ ^ ^ ^ — ^ ^ ^ ^
- 14 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
SYSTEM PRICE EVOLUTION 3M1 & 3M10
9 KtaHonal SemlccHKluctDr •
THE 32-BIT MICROPROCESSORS PUT THE SUPER MINI PERFORMANCE WHERE THE PRODUCTIVITY IMPROVEMENT NEEDS ASK FOR: AT THE WORKING LEVEL
32-BIT MICROPROCESSOR
SYSTEMS
PRICE PERFORMANCE
UNIT AREA
TODAY
2 National Semknnductor <
- 15 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
32-BIT MICROPROCESSORS
KEY EVALUATION FACTORS
• SOFTWARE AVAILABILITY & EFFICIENCY
• COMPLETENESS OF THE HARDWARE CLUSTER
• SYSTEM PERFORMANCE
• SYSTEM PRICE
• TIME TO MARKET
• SUPPLY RISKS
I National SemlcorKJuctor •
TIME TO MARKET
32-BIT HARDWARE CLUSTER COMPLETENESS
SOFTWARE & TOOLS COMPLETENESS
UNIX-CLUSTER INTEGRATION
S National Semiconductor'
- 16 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
SUPPLY RISKS
MULTIPLE SOURCES
PROVEN TECHNOLOGY
S National SemiconcKJclDr <
SUMMARY
1990 — 32-BIT MICROPROCESSORS
^ INTEGRAL PART OF MOST SYSTEMS
ix 8-BIT & 16-BIT — SECONDARY ROLES
a National Semiconductor <
- 17 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / S.m Jose, CA 95131 / (408) 971-9000 / Telex 171973
(::)aE>ataquest
5u?: (;:)a Dataquest
JAPANESE SEMICONDUCTOR INDUSTRY—THE COMING NEW AGE
Tomihiro Matsumura Senior Vice President and Director
NEC Corporation
Mr. Matsumura is currently Senior Vice President and Director of NEC Corporation and is responsible for semiconductor operations. He was previously General Manager of NEC's Integrated Circuit Division. Prior to that, he worlced for the Integrated Circuit Division in the fields of circuit design, product planning, and microcomputer system design. He was also engaged in the development of discrete semiconductors at NEC. Mr. Matsumura graduated from the Engineering Department of Nihon University and continued in the same department as a graduate researcher for four years.
Dataquest Incorporated JAPANESE SEMICONDUCTOR INDUSTRY CONFERENCE
April 14-16, 1985 Hakone, Japan
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
JAPANESE SEMICONDUCTOR INDUSTRY
— COMmC NEW ERA —
INTERNATIONAL SPOTLIGHT ON JAPAN
- 1 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
JAPANESE SEMICONDUCTOR MARKET
SOURCE DATAQUEST
JAPANESE SEMICONDUCTOR SHIPMENTS
SOURCE DATAQUEST
- 2 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
SEMICONDUCTOR SUPPLIERS RANKING
1975 1978 1981 1984
1 2 3 4 5 6 7 8 9
10
] [ ] C
] C
J L
J
JAPANESE SUPPLIERS SOURCE OATAQUEST
WHY
1. NEW APPLICATION/ LARGE SCALE
2. ENGINEERING RESOURCES
3. CONSISTENT CAPITAL EXPENDITURES
- 3 -
Oataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Parl Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
CREATING NEW IVIARKET
/ c & c
PC
VTR
CTV
CALCULATOR
EDP — I —
70 '80 30
ENGINEERS ENGAGED IN JAPANESE IC INDUSTRIES
EMPLOYMENT
15,000-
10,000-
5,000
SOURCE MiTi
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
ELECTRICAL AND ELECTRONIC ENGINEERING GRADUATES
GRAD
20,000-j
UATES
10,000-
SOURCE MINISTRY OF EDUCATION MORGAN STANLEY
70 73 76 79
U.S. & JAPANESE MERCHANT CAPITAL PERCENT OF
EXPENDITURES jm
m 3,000-1
2,000-
1,000-
-30
-20
-10
U.S. _ JAPAN
rnm 78 79 '80 '81 '82 '83 '84 SOURCE DATAQUEST
- 5 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder i v. r Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
WW ESTIMATED CAPITAL EXPENDITURES AS A PERCENT OF IC REVENUES
100-
50
•75
%
11%
25% 35%
'80 '85
SOURCE DATAQUEST '82
JAPANESE SEMICONDUCTOR INDUSTRY CONCERNS
L GLOBAL APPROACH
2. COn/lPETITIVE TECHAIOLOGY
3. RELATED INDUSTRIES
- 6 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (406) 971-9000 / Telex 171973
OVERSEAS SEMICONDUCTOR FACILITIES
^.Wi^^^
ANNOUNCED PAPERS AT ISSCC PAPERS 100
'71 '73 75 77 79 '81 '83 '85
- 7 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
JAPANESE LICENSING AGREEMENTS IN 1984
JAPAAIESE NON-JAPANESE
10
c ^
3 13
SOURCE DATA QUEST
JAPANESE EQUIPn/IENT iVIANUFACTURERS GROWING (SEMiCONOUCTOR RELATED REVENUES)
(BILIOI\IS OF YEN)
NIKON
CANON
DISCO
SHINKAWA
TAKEDA
TOKYO ELECTRON
ULVAC
ANELVA
1980
3.0 10.0
6.6 7.4 9.4
19.2
8.0 1.6
1983
20.0
15.0
11.4
11.4
24.0
39.0
16.0
8.1
1984E
45.0
22.0
17.6
20.0
38.0
72.2
28.0
16.0
AGR 1980-1984
96.8%
21.8%
27.7%
28.2%
41.8%
39.3%
36.7%
77.8%
SOURCE DATAQUAST & NEC
- 8 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (406) 971-9000 / Telex 171973
SILICON PRODUCTION IN JAPAN
TON 3,000-
2,000-
1,000
84/80 AGR
16%
WORLD 84/80 AGR
36%
'80 '81 '82 '83 '84 SOURCE NEC
- 9 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
mftm^tiBtwmm
iSS5H*0ifi
1. n^co^^Mi^mm 2. B:^±m<D^^mWiiim
3. i^mi^j>(-ti-<7>tii^m^>^>^'
- 1 -
Oataguest Incorporated, A Sutisldiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
B:$:(Dmm{$mm
75 '7» -ai
B^^mmoymmwtam
B$
20-
10-
SOURCE DATAQUEST
- 2 -
Oataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
mmwy-—f3-(Diiimm3ydFyci' iUti 1978
1 [
2 L
5 C 6
7
8
9
10
] [ 3 [ I
4 I I
3 :
1 C
1 C
1981
^
H C
1984
B:*:±«l
SOURCE DATAQUEST
* ( 7 ) i
1. rjj*ii!l^(7>!5:^
2. ^mt)(DikX
3. Jii!flD«:ig#JS»
- 3 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
mmm^0$5t!
. * ^ -
c&c PC
VTR
CTV
Calculator
EDP
70 '80 '90
&m^u
15,000
10,000-
5.000 O ^*^^tam
75 •78 •81 •84 SOURCE MITI
- 4 -
Oataguest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
^mm^ 20. 000-
10. 000-
'70
mmmo^^^mmn
JAPAN
73 76 79 SOURCE IVIINISTRY OF EDUCATION
MORGAN STANLEY
*@ • B*^-* -©^f i iJSg*i^
M$ 3,000-1
2,000
1,000 U.S.
[JAPAN
SS-hi^tb -TAnoA
-30
-20
-10
78 73 'm '81
- 5 -
*82 *83 '84 SOURCE DATAQUEST
Oataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (406) 971-9000 / Telex 171973
iciiinMizm?>^mmBi]Si^Mmm)
100-
50-
75 '80 '85
SOURCE DATAQUEST '82
Bto^^mn ttcDii
1. B 1^ b
2. :tf}i>±Jl'1^m(D^^t^^
3. mm.m^<Dm^
- 6 -
Oataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
cifn-n)Vfj:^mmi&(Dmm
issccm^mmwn ^mn^ 100-
50- u.s.
'71 '72 '73 '74 '75 '76 '77 '78 '79 '80 '81 '82 '83 '84 '85
- 7 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
B*3£||a)ajB3?3S 1984 H*±^ ^m±m
10 d ^
13
Source Data Quest
(lO^R)
NIKON
CANON
DISCO
SHINKAWA
TAKEDA
TOKYO ELECTRON
ULVAC
ANELVA
1980
3.0
10.0
6.6
7.4
9.4
19.2
8.0
1.6
1983
20.0
15.0
11.4
11.4
24.0
39.0
16.0 n 4
8.1
1984E
45.0
22.0
17.6
20.0
38.0
72.2
28.0
16.0
AGR 1980~1984
96.8%
21.8%
27.7%
28.2%
41.8%
39.3%
36.7%
77.8%
SOURCE DATAQUEST & NEC - 8 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Coinpany /1290 Ridder Park Drive / San Jose. CA 95131 / (408) 971-9000 / Telex 171973
B:ii0)mf&mi/[jziy^m TON
3,000-
2,000-
1,000-
24%
WORLD
JAPAN
- 9 -
84/80 AGR,
16%
46%
84/80 AGR
36%
'801 '81 '82 '83 '84
SOURCE NEC
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Parl( Drive / San Jose, CA 95131 / (406) 971-9000 / Telex 171973
Dataquest
CHALLENGES AND OPPORTUNITIES FACING U.S. EQUIPMENT SUPPLIERS IN THE FAR EAST
Jon D. Tompkins President, Semiconductor Equipment Group
Corporate Vice President Varian Associates \^/sj^t^
^ino ' Mr. Tompltins is President of the Semiconductor Equipment Group and a Corporate Vice President at Varian Associates. The Varian Semiconductor Equipment Group (SEG) consists of the Extrion Division, which manufactures ion implantation systems; the Lithography Products Division, which manufactures electron beam maskmaking systems; and the Thin Film Technology Division, which manufactures sputter coaters for metallization in semiconductor manufacturing. Varian SEG is also a partner with Tokyo Electron Laboratories (TEL) in a manufacturing joint venture known as TEL-Varian. Before joining Varian, Mr. Tompkins spent five years as an investor, director, and operating manager for several small high-technology companies. Previously he held senior management positions at Spectra Physics, Inc., a major supplier of coimnercial laser products. He also spent four years at Hewlett-Packard in a variety of marketing positions. Mr. Tompkins received a B.S. degree in Electrical Engineering from the University of Washington, and a Master's Degree in Business Administration from Stanford University.
Dataquest Incorporated JAPANESE SEMICONDUCTOR INDUSTRY CONFERENCE
April 14-16, 1985 Hakone, Japan
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
CHALLENGES AND OPPORTUNITIES FACING US EQUIPMENT SUPPLIERS IN JAPAN MARKET
Good afternoon ladies and gentlemen. As the President of the
Semiconductor Equipment Group of Varian Associates it is an
honor to be able to represent american manufacturers of
semiconductor equipment at this important conference.
(Slide 1): I have three objectives in my presentation. I
intend to describe the role that Varian Associates plays in the
world and Japanese semiconductor marketplaces as a supplier of
state-of-the-art production tools. I intend to define the
opportunities that I see for United States equipment companies
in the Japanese market. Finally, I will discuss the challenges
facing american companies and, in fact, all foreign companies as
they compete for marketshare in Japan. Where appropriate, I
will use Varian's experience to illustrate important points.
(Slide 2): Varian Associates is a leading supplier of high
technology semiconductor manufacturing equipment. Varian has
been involved in the industry since the middle 1970's. We are
currently involved in three aspects of semiconductor
manufacturing. They all focus on wafer fabrication. They
include ion implantation, where we are the worlds largest
manufacturer and the largest supplier to the Japanese market;
thin film coatings, where we believe that we are the largest
supplier of sputtering machines for metallization in the world
and in the Japanese market, and lithography, where we have been
involved in the electron beam mask making market for several
years. We also manufacture MBE systems and we are in the
- 1 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
process of improving our competitive position in the rapid
thermal annealing marketplace.
Our sales of semiconductor manufacturing equipment in our fiscal
year 1984 were about $190 million. As a total corporation
Varian had sales of $929 million. We distribute our products in
Japan through Tokyo Electron Limited (TEL). We also manufacture
ion implanters in Japan at TEL-Varian, a joint venture that we
have with Tokyo Electron Limited. As many of you know, we have
been involved for a long time in the Japanese semiconductor
market and, as a result, we believe that we can comment
objectively with regard to the opportunities and challenges
facing foreign suppliers to your marketplace.
(Slide 3): We have three opportunities in your marketplace.
First, according to Dataquest data, your market is the largest
market for capital equipment and it is imperative for us to
participate on that basis alone. Second, due to your striving
for technology leadership you offer a ready market for leading
edge manufacturing tools. Third, your market represents an
Opportunity for exposure for companies like Varian to new
technical approaches that can serve as the foundation for future
manufacturing tools. I would now like to address in more detail
each of these important opportunities.
(Slide 4): This slide shows that Japan became the largest
single country market for semiconductor capital spending in the
1983 and 1984 period of time. Although there is some question
regarding the absolute amount of spending that will occur in
1985 due to the softness in our industry, it is clear from this
Slide that the gap between capital spending in Japan and North
America is projected to increase in the future.
- 2 -
Dataquest Incorporated, A Subsidiary of AC. Nielsen Company /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
(Slide 5): Japan is clearly a ready market for new
manufacturing tools. We at Varian agree that this demand is
being principally driven by the high focus among Japanese
semiconductor companies on leadership in the DRAM marketplace.
Although I cannot say with total accuracy that all of the
following technical innovations are being solely driven by
Japanese semiconductor designers, we at Varian are certainly
aware of several advances in semiconductor design that are
challenging us to accelerate our product development efforts.
We are very aware of plans within the industry to use 200 mm
wafers in 1986. This clearly has significant impact on our
medium current serial implanters and on all product development
in the deposition area. We see the development of megabit and
larger DRAMs expanding the range of implants that we will have
to provide. We are very aware of the requirement for improved
step coverage in films. We are tracking very closely the
increasing use of silicides in designs and, obviously the move
to the four megabit DRAM will require submicron design rules
that in turn push new lithography approaches such as x-ray to
the forefront. Overlaying all of these technology drivers in
the product lines that Varian currently serves, are dramatic
changes in the requirements for particulate reduction, higher
reliability levels, and compatibility with future automation
approaches.
This continued rush of technology innovation makes it essential
that United States equipment supplier focus their efforts on new
product design very carefully and invest aggressively to compete
in your marketplace. As an example (Slide 6) the Varian
Semiconductor Equipment Group research and development spending
has increased as shown in this slide from a level of 9.8% in
1982 to a projected level in 1985 of almost 13%. This dramatic
increase in our level of spending should underscore for you how
serious Varian intends to compete in the future market for
semiconductor capital equipment.
- 3 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
(Slide 7): We believe that Japan represents a source of new
technical ideas and approaches for Varian and other United
States semiconductor equipment companies. It is my perception
that you have increased your willingness to share technology
with United States equipment companies in order to ensure that
solid manufacturing solutions are forthcoming for the one
megabit DRAM programs. We recognize the fact that some of this
is being encouraged by government actions in Japan. The result
will be more timely availability of important manufacturing
tools for use in your market.
I would now like to change directions and discuss the challenges
to US companies in competing in Japan. I believe four
Challenges predominate. First, we must track rapid technology
innovation at a time when our equipment design cycles seem to be
increasing. Second, we must meet the unique needs of your
market. Third, we and all foreign suppliers to your market must
convince you that support for our products is available on a
timely basis. Finally, we will be increasingly challenged to
meet your needs for automation compatibility.' Now I would like
to talk about these challenges in some detail.
(Slide 9): We are definitely challenged by the unique market
needs in the Japanese market. In preparing for this
presentation, I gave considerable thought to what is truly
unique about your market. In the final analysis, I believe
three items differentiate your market from any other market in
the world. Japanese semiconductor designers are taking
approaches to device design at this time. That can place
specific, unique requirements on basic tool performance. A good
example of this is the fact that your designers have
concentrated much more heavily in the past on molysilicide
applications compared with designers in other country markets.
This unique requirement not only places a challenge on US
equipment designers to meet the unique performance requirement,
it also requires that we be able to support that required
process in this marketplace.
_ 4 _
.taquesf Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose. CA 95131 / (408) 971-9000 / Telex 171973
Japanese semiconductor companies often times require minor
changes to the equipment in order to meet a unqiue internal
requirement. Your needs for customized interfaces, etc. exceeds
that Of any other country market. Thus, in order to
successfully serve you market we must be able to provide
customization to our product. This was a key driver behind the
decision to form our joint venture with TEL.
As a result of the need to support processes locally and to
serve the needs of your market for customization, US equipment
companies must have a local presence in order to successfully
compete in the Japanese market. There are two popular
approaches. First, companies are forming joint ventures.
Second, they are opening wholly owned subsidiaries. We at
Varian choose the joint venture route early in our involvement
in your market. We have been involved with Tokyo Electron
Limited in our joint venture since 1981. Both companies have
made a major investment in this activity. It now consists of
two buildings located at the TEL manufacturing site in
Nirasaki. These buildings occupy about 90,000 square meters of
space. Our joint venture employs about 150 manufacturing
personnel. We are very pleased with this joint venture. It
allows US to react quickly to your needs for customized ion
implantation systems. It allows us to continue to work with the
powerful TEL Sales and Service organization in providing almost
a perfect solution to your requirements for leading edge
manufacturing tools.
Slide 10 Shows you the facilities in Nirasaki. Note the
buildings are new. They are modern; they are very efficient.
Slide 11 shows you the inside of one of the buildings. This building is dedicated to manufacturing medium current ion implanters. Almost all of our medium current implanters for Japanese consumption are now manufactured in Nirasaki at our joint venture.
- 5 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
(Slide 12): Customer support is essential to high productivity
in any semiconductor manufacturing plant. With the
concentration of industry in your country, it appears as though
Japanese semiconductor manufacturers have been able to pull
equipment support much closer to your factories at a rate faster
than your competitors in the United States and Europe. One of
the principal reasons why we originally committed to our
relationship with Tokyo Electron Laboratories was their
commitment to near site support for all of the equipment that
they would supply. We believe that approach is working and is a
major reason why most Japanese semiconductor companies prefer to
buy Varian ion implanters and sputter coaters.
(Slide 13): The last challenge that I would like to discuss
today has to do with the role we and other US equipment
manufacturers can play in the automation of Japanese wafer fabs.
This is proving to be a difficult challenge for all of us. It
is primarily due to some fundamental differences between
Japanese semiconductor companies and counterparts in other
countries. The principal difference that I have noted, is the
fact that almost all of you have strong inhouse computer
systems, and software capability. This allows you to undertake
a large part of the automation task without outside help. It
reduces the interaction that we as an equipment company need to
effectively supply you with automation solutions. In addition,
it appears as though you are undertaking automation with great
secrecy. This, in effect, is also making it more difficult for
US manufacturers to help you solve your automation problems. In
addition, it appears as though you are not interested in
adopting the communications protocol accepted by SEMI as the
industry standard. I do not clearly understand the state of
that at the present time. However, I do know that virtually all
US manufacturers are designing next generation equipment around
the SECS II protocol. If you shy away from it we run the risk
- 6 -
.taquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
of incompatibility. That will further increase the difficulty
in helping you solve your automation problems. We at Varian are
dedicated to remaining an important supplier of essential tools
for your wafer fabrications. We need a forum to insure that
your needs are communicated to us and thus we can respond with
the appropriate tools at the appropriate time to solve your
problems.
I would like to close by thanking Dataquest for giving me an
opportunity to comment on the challenges and opportunities
facing United States semiconductor equipment cornpanies. We at
Varian thank you for your business and your support. We look
forward to competing aggressively for share in your market in
the years to come. Thank you. It's been a pleasure to speak
today.
varian CHALLENGES AND OPPORTUNITIES
FACING U.S. EQUIPMENT SUPPL IERS IN J A P A N MARKET
- 7 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder ParK Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
DATAQUEST PRESENTATION OBJECTIVES
vanan
• ROLE OF VARIAN IN WORLD AND JAPAN SEMICONDUCTOR INDUSTRY
• OPPORTUNITIES FOR U.S. EQUIPMENT COMPANIES IN JAPAN MARKET
• CHALLENGES FACING U.S. COMPANIES IN JAPAN
VARIAN IS A LEADING SUPPL IER OF HIGH TECHNOLOGY SEMICONDUCTOR MANUFACTURING EQUIPMENT yarian
• INVOLVED IN ION IMPLANTATION, THIN FILM COATINGS (SPUTTERING AND MBE), AND LITHOGRAPHY
• FY'84 SALES: $ 1 9 0 MILLION
• DISTRIBUTE IN JAPAN VIA TEL
- MANUFACTURE IN JAPAN (TEL-VARIAN JOINT VENTURE)
- 8 -
ataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose. CA 95131 / (408) 971-9000 / Telex 171973
T H E O P P O R T U N I T Y IN J A P A N
van an
• PARTICIPATE IN THE LARGEST EQUIPMENT MARKET
• READY MARKET FOR LEADING EDGE TOOLS
• EXPOSURE TO NEW TECHNICAL APPROACHES
J A P A N IS T H E L A R G E S T M A R K E T
. . THE GAP IS GROWING vanan
MILLIONS OF
DOLLARS
(THOUSANDS)
9
8
7
6
5
4
3
2
1
O
CAPITAL SPENDING NORTH AMERICA VS JAPAN
U.S. COMPANIES JAPANESE COMPANIES
-•OuHLt l>ATAlllfc«.l
75 76 77 78 79 80 81 82 83 84 85 86 87 80 ytAH
- 9 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
JAPAN IS A READY MARKET FOR NEW TOOLS
vanan
• DRIVEN BY DRAM DEVELOPMENT
- SUBMICRON DESIGN RULES - 200MM WAFERS - EXPANDING RANGE OF IMPLANTS - IMPROVED STEP COVERAGE IN FILMS - BROAD USE OF SILICIDES
• U.S. SUPPLIERS MUST FOCUS EFFORTS CAREFULLY AND INVEST TO COMPETE
VARIAN SEG R&D IS INCREASING TO MEET MARKET NEEDS
vanan
1982 1983 1984 1985E
R&D AS % OF SALES 9.8 10.4 11.1 12.7
- 10 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
JAPAN IS A SOURCE OF NEW TECHNICAL APPROACHES
•• varian
• ALSO DRIVEN BY DRAM PROGRAMS
• ENCOURAGED BY GOVERNMENT ACTIONS
THE U.S. COMPANY CHALLENGE IN JAPAN
TRACK RAPID TECHNOLOGY INNOVATION
van an
-Tf^.l-.V^-^ • J^ • MEET UNIQUE MARKET NEEDS
^^f^y> • CONVINCE CUSTOMERS THAT SUPPORT IS AVAILABLE Aff
>1' ^ ^ • MEET NEEDS IN AUTOMATION
- 11 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
REPRODUCTIONS OF SLIDES 10 AND 11
WERE UNAVAILABLE AT TIME OF PUBLICATION
- 12 -
Jtaquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
UNIQUE MARKET NEEDS IN JAPAN
• BASIC TOOL PERFORMANCE . . . REQUIRES "PROCESS" SUPPORT
• CUSTOMIZATION
• LOCAL PRESENCE IS CRITICAL - JOINT VENTURE - SUBSIDIARY
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CRITICAL TO U.S. SUPPLIER SUCCESS
JAPAN FAB AUTOMATION varian
• A DIFFICULT CHALLENGE TO U.S. MANUFACTURERS - STRONG IN-HOUSE CAPABILITY - SECRECY - DIFFERENT PROTOCOLS
• U.S. SUPPLIERS OFFER NEEDED TOOLS . . . WE NEED A FORUM TO ENSURE JAPAN NEEDS ARE COMMUNICATED
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Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 RIdder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
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SILICON PERVASIVENESS
Kihachi Tamura President
Shin-Etsu Handotai Co., Ltd.
Mr. Tamura is President of Shin-Etsu Handotai Co., Ltd. He joined Shin-Etsu Chemical Co., Ltd., in 1948, and has held a variety of administrative positions within the company since that time. In 1972, he became President of Shin-Etsu Handotai and in 1983 he was also appointed to Vice President and Representative Director of Shin-Etsu Chemical. Mr. Tamura received a Bachelor of Science degree from the Department of Science at Hakkaido Imperial University.
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Dataquest Incorporated JAPANESE SEMICONDUCTOR INDUSTRY CONFERENCE
April 14-16, 1985 Hakone, Japan
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Dataquest
THIS PRESENTATION WAS NOT AVAILABLE
IN TIME FOR PUBLICATION
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
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DINNER SPEAKER
Atsuyoshi Ouchi Vice Chairman of the Board Representative Director
NEC Corporation
Dr. Ouchi is Vice Chairman of the Board and Representative Director of NEC Corporation. In addition, he presently holds concurrent posts as Chairman of NEC Home Electronics, NEC Kansai, NEC Yamagate, NEC Toyama, and NEC Environment Engineering. He is also a member of the Board of Directors of 11 other domestic and overseas subsidiary companies of NEC Corporation. Dr. Ouchi joined NEC in 1942, and has held a variety of managerial and executive positions, each with increasing responsibility. Before assuming his current position, he was Senior Executive Vice President and Representative Director. Dr. Ouchi was awarded the Japan Industrial Technology Grand Prize frcan the Prime Ministry of Japan in 1974 for the development of a high-performance computer system, and received the Blue Ribbon Medal frcan the Japanese government in 1984. Dr. Ouchi graduated from the E.i.ectrical Engineering Department, Faculty of Technology, Tokyo Imperial University, and received a B.E. degree. He also received a D.E. degree from the University of Tokyo for research into the applications of negative impedance converters.
Dataquest Incorporated JAPANESE SEMICONDUCTOR INDUSTRY CONFERENCE
April 14-16, 1985 Hakone, Japan
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Dataquest
THIS PRESENTATION WAS NOT AVAILABLE
IN TIME FOR PUBLICATION
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
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Dataquest
DINNER SPEAKER
W.J. Sanders III Chairman of the Board, President,
Chief Executive Officer Advanced Micro Devices Inc.
Mr. Sanders is Chairman and founder of Advanced Micro Devices Inc. and is also the company's President and Chief Executive Officer. Before founding AMD, Mr. Sanders was Group Director of Marketing Worldwide at Fairchild Semiconductor. Previous positions at Fairchild included Sales Manager, Regional Sales Manager, Area Sales Manager, Department Head, and Director of Marketing. Prior to Fairchild he was in the engineering department of Douglas Aircraft Co. and was a Sales Engineer in the mid-America area for Motorola Semiconductor. Mr. Sanders is also a co-founder and director of the Semiconductor Industry Association, and co-founder of the Santa Clara County Manufacturing Group, the Semiconductor Research Corporation, and the Microelectronics and Computer Technology Corporation. He is a member of the Board of Directors of Donaldson, Lufkin and Jenrette and The Listed Company Advisory Committee of the New York Stock Exchange. Mr. Sanders graduated from the University of Illinois College of Engineering with a B.S. degree in Electrical Engineering.
Dataquest Incorporated JAPANESE SEMICONDUCTOR INDUSTRY CONFERENCE
April 14-16, 1985 Hakone, Japan
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
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THIS PRESENTATION WAS NOT AVAILABLE
IN TIME FOR PUBLICATION
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, GA 95131 / (408) 971-9000 / Telex 171973
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iVIOS MEMORY STATEGY: PARTNERS AND ADVERSARIES
Lane Mason Senior Industry Analyst
Semiconductor Industry Service Dataquest Incorporated
Mr. Mason is a Senior Industry Analyst for Dataquest's Semiconductor Industry Service. He has been with Dataquest for seven years, during which he has gained increased responsibility for coverage of MOS and bipolar memory markets, as well as for general research support. Mr. Mason previously worked for Hughes Aircraft and Raychem Corporation. He has a B.S. degree in Physics from the California Institute of Technology and has done graduate work at the University of California at Los Angeles in the Department of Economics.
Dataquest Incorporated JAPANESE SEMICONDUCTOR INDUSTRY CONFERENCE
April 14-16, 1985 HaKone, Japan
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
MOS MEMORY STRATEGIES FACE-TO-FACE WITH THE NEW MARKET REALITIES
Lane Mason Sr. Industry Analyst
Semiconductor Industry Service Dataquest Incorporated
(Title Slide)
Steadily over the past five years, and dramatically over the past five months, the MOS memory market has taken on a new set of attributes, a new and enlarged supplier base, become drastically more competitive, has seen a shift in emphasis on the criteria for success, has approached new thresholds in technology development, and cultivated new markets with varied applications and performance requirements. Those who have failed to stay abreast of the new market realities have been punished mercilessly.
Driven by the unseen force of the market, facing insatiable demand brought on by their own successes in cost reduction, every MOS memory chipmaker has had to review his strategy for market participation—several times—in order to stay in tune with the long-term market direction. These strategic decisions, and the ability to execute accordingly, have allowed manufacturers to enjoy large profits in 1983 and 1984, and to weather the flood of red ink in 1981 and 1982...and perhaps 1985.
The short period 1981 to 1984 also saw funding of 17 new memory start-ups, for which several hundred million dollars was wagered on the proposition that the MOS memory market was large enough and diverse enough to offer opportunities to compete profitably, despite the recognized intense competition. The success o r . failure of these new entrants has yet to be seen, but 1985 and 1986 will surely be a trial by fire.
(Slide 2)
What I would like to do in my presentation today is the following:
First, I would like to take a look at the dramatic change in the MOS memory market in just the past five years, with special emphasis on the emerging dominance of Japanese manufacturers and the importance of manufacturing efficiency in the mainstream commodity memory markets.
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© 1985 Dataquest Incorporated April 15 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Next, I would like to take a look at the strategic response and competitive positioning that have been adopted by all participants in the market, including the Japanese, in response to the present day characteristics of the market as well as the expectations of market development over the next five years. I'll want to take a look here especially at the business thrust of the numerous start-ups that have been funded in the past four years.
Finally, I'll want to take a look at the expected MOS memory market development for the next five years and try to evaluate the relative strengths and weaknesses of the various competitive strategies during that period. In a market growing an average of 25 to 30 percent per year, and developing a more diverse character, well-executed strategies are bound to be able to ride that growth. But also, some strategies are destined to fail.
(Slide 3)
Perhaps the most important change that has occurred in the MOS memory market in the past five years is a shift in the manufacturing base from the United States to Japan. In 1980, which was the final profitable year of the previous memory cycle, U.S. manufacturers had 74 percent of a market that was about $2.4 billion. At that time, they had more than 60 percent of the leading density dynamic RAM, the 16K, which sold for about an average of $4.60 that year.
The next two years were exceedingly tough as prices plummeted, and when we emerged to the equivalent point in the next cycle, Japanese producers of MOS memory now controlled more than half of the market. Although many reasons are given for this increase in Japan's market share at the expense of U.S. producers during the intervening four years, prominent among those must be the nature of the commodity memory market and the strength of the Japanese in being vertically integrated, high volume, production-oriented manufacturers.
Looking ahead at the next year or two, we can see that the fate of the U.S. share of the market will deteriorate even further as the product areas which show the most significant revenue growth, the 64K SRAM and 256K DRAM, are the areas where Japanese dominance is overwhelming. In addition, after a brief pause in market penetration in the EPROMs market during late 1983 and 1984, Japanese manufacturers are now back in force and give every indication of again turning their significant manufacturing skills on those markets. It is altogether possible that the market shares in MOS memory between the United States and Japan for 1986 could be the exact reverse of those that we saw six years earlier in 1980, with the Japanese then controlling nearly three-fourths of the market and U.S. manufacturers controlling as little as one-fourth of the market.
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© 1985 Dataquest Incorporated April 15 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
(Slide 4)
In the short life span of two generations of commodity memory product, Japanese manufacturers have moved from a vastly inferior position to overwhelming dominance of the mainstream market. During that time, virtually every U.S. manufacturer has proven to be unable to keep up with their steady low-cost production and timely new product introduction. (Slide 5)
Although we have seen that production has shifted strongly in favor of the Japanese over the last memory production cycle, in this next slide (Slide 6) we've shown a couple of other occurrences in the marketplace. First of all, we compare 1980 and 1984. The top five manufacturers had about the same market share going into the cycle as coming out, with slightly more than 52 percent. If we enlarge that base to the top ten, we show that the top ten manufacturers' share fell by about 3 percent, and if we cast our net even wider, we see that the top 20 manufacturers share of the total business has declined by about 7 percent. So, I think that the market is not becoming more concentrated. in fact, if we look at the number of vendors, we see that another entirely different occurrence is taking place. New manufacturers are entering the market and establishing their market share, often in narrowly defined market segments. These are the companies that have started up over the last four or five years, and they have yet to grow to the point where they can be truly significant players from a revenue point of view in any of the major markets. This, of course, is a natural consequence of the market diversification that is taking place, where many of these new companies are strategically focused on new markets, new products, new technologies, or other strategic approaches.
(Slide 7)
Specifically, these start-ups have shown a lot of interest in the EEPRC^ market, high performance memories, as well as the new technological directions like CMOS dynamic RAMs that are beginning to develop. In addition, there are even some of these manufacturers aimed directly at the center of the market with the intention of emulating the Japanese successes of the last five years. We'll be talking more about these strategic approaches of these new start-ups shortly.
(Slide 8)
Several things are apparent in the new market environment that MOS memory manufacturers face today. Summarizing the previous several slides, we see, first, that the Japanese manufacturers have, by virtue of the market numbers alone, some secret of success in their operations that large U.S. manufacturers often lack. Second, it's becoming extremely expensive to play in the MOS memory market which is leading many of the less well-financed companies to certain market participation approaches of necessity. Third, we've seen that there is a tremendous surge of new
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© 1985 Dataquest Incorporated April 15 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
suppliers to the MOS memory market in the form of start-ups focused on the emerging diversification in the marketplace itself. New markets are targeting specific markets, specific technologies, or specific parts of the account base. Fourth, every manufacturer participating in the MOS market as a whole would probably admit to the undeniable truth that production of high volumes of leading edge VLSI product is essential in driving the process technology available to the entire MOS product portfolio. And, for most manufacturers, the only place such volumes can be sufficient is in the MOS memory product lines, such as dynamic RAM, static RAM, and EPROM.
(Slide 9)
Over the past five years, the most successful manufacturers in the MOS memory market (viewed from a share-of-market point of view) have been those who exhibited the characteristics listed on the next slide. While this is, by no means, meant to denigrate the achievements of the smaller manufacturers who have been instrumental in developing new markets, new technologies, and new levels of performance, from a sheer market size point of view, the absolute impact of those manufacturers has yet to be seen in the aggregate market numbers. The manufacturing attributes and strategic thrust that has played the most important role over the past five years are probably the ones listed on this slide.
First and foremost among these is the capability to manufacture efficiently extremely high volumes of the same part. This requires close attention to detail, excellence in manufacturing management, efficient capital utilization in the manufacturing process, and the ability to produce a high quality product at an ever-decreasing cost.
Second, most of the manufacturers that have moved up in their market presence over the past five years have generally had quite smooth transitions into the new products. Their progression from one generation of memory product to the next has been much more evolutionary, and the new products have been brought into production more easily than they have for those manufacturers who have fallen behind in the markets. The more successful vendors have viewed, for example, the dynamic RAM market as more of a continuum rather, than succession of successive device densities. The 64K dynamic RAM density, for example, is only the current vehicle for serving the demand for high volume, low-cost RAM, and it is an absolute certainty that this product will eventually be supplanted by 256K dynamic RAMs which will, in turn, be replaced by 1-megabit dynamic RAMs. Product and process planning and an unwillingness to discount this certain eventuality is a key part of their planning process.
Third, these manufacturers tend to be quite advanced technically as is required since leading-edge processes are invariably first brought up in the high volume MOS memory product line. The first high volume 2um process showed up, for example, in Hitachi's and Toshiba's 64K SRAMs.
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© 1985 Dataquest Incorporated April 15 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Fourth, and importantly, most of the major successful companies in the MOS memory market for the past five years have had large financial resources, and often a captive source of demand, which serve to offer an effective buffer against the ups and downs in prices that occur periodically in the MOS memory market.
Fifth, and finally, successful manufacturers have a large degree of product and process synergy, giving recognition to the fact that a tremendous amount of what is learned in high volume MOS memory manufacturing can never be sold for revenues or profits, but can be transferred within a company to good advantage in other parts of the product line. Conversely, maintenance of several distinct and diverse processes in the facility spread resources thin, and fail to take advantage of the coimnonality that can exist between many separate parts of the product line.
It is ray conviction that any manufacturer whose strategy does not honestly contain a significant element of the "success attributes" listed here, will face severe problems in the coming five years. Standard product, commodity memory will be dominated by low-cost producers who can absorb the losses in market downturns, and bring their new products out smoothly. Targeted market suppliers may be relegated to smaller, more-design intensive markets or have no place at all where they can maintain a profitable business.
In niche markets, market and product development takes considerable amounts of design effort and applications expertise, and though margins may be large, on a percentage basis, total available revenues will be small. If those niche markets do grow, the new market opportunity will attract nore efficient producers. Therefore, it will be difficult to hold onto these markets as they mature. Manufacturers with narrow product lines or narrow target markets can be buffeted mercilessly by the wild fluctuations.
Manufacturers who find their place in smaller or itrare narrow markets will be less able to drive their mainstream process—because of lower volumes—and unable to make fullest use of the coproduct of their greater "process know-how expertise." They will be less able to stand the stress of the intensely driving market.
New Strategic Directions for Dominant Commodity Memory Suppliers
If we take a look at the strategic direction for those manufacturers who already seem best to embody the success factors listed on the earlier slide, and see what their strategic direction will be for the coming years, then I think we'll see there will be two rather different points of departure for pursuit of the same market. These manufacturers, such as Fujitsu, Hitachi, and NEC, as well as the emerging second level Japanese—Mitsubishi, Oki, and Toshiba—are increasingly starting to look
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@ 1985 Dataquest Incorporated April 15 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
at what might be considered secondary market opportunities in the MOS memory area. These can be higher performance niches, special packaging, special parts of the account base, or other deviations from the mainstream commodity part of the market in which they have been so successful over the past several years.
As we have seen, memory suppliers with weak manufacturing capabilities or those unable to make smooth product transitions have been pushed out of the large commodity memory part of the market. It may well prove to be true that for those manufacturers who are left dominating that market, the best opportunities for new market growth and profit lie in these secondary markets.
It also follows from the further "application specificity" in the commodity memory product line that these markets, once small, may now pose the most rapid growth opportunity as well. NEC is not ignoring the video RAM market, Hitachi is not ignoring the CMOS DRAM market, Toshiba is not ignoring the 2Kx9 SRAM market, Fujitsu the 100ns DRAM or 16Kx4 DRAM market, etc. These substantial subsegments are being serviced by the best processing technology in the business.. .and are often the same markets in which manufacturers with lesser manufacturing skills are targeting to get, or retain, a foothold in the market. We have to ask, which developing markets can be best serviced by the volume "production mills" and which can be best serviced by the "niche marketers."
Now, I want to take a look at some of the alternate strategies that have been adopted by other companies now participating in the MOS memory market.
New Market Making
One strategy that several of the recent start-ups have incorporated into their business plans is one in which they hope to take a new technology, with new features and develop new markets. A variant of this is to take a new technology and try to displace a more embedded
.' technology in an established market.
If we look at this first case, I think the best example that we have is the EEPROMs market, which has formed part or all of the business foundation for several of the start-ups that have come on the scene in the last four or five years. It is the hope of these manufacturers that their early entry into the market will afford them a competitive advantage by knowing the likes and dislikes of the systems people as well as identifying the applications, sockets, and customer base.
However, as we have seen, especially in the EEPROM market and in its variants, such as the NVRAM market, or even the newer high speed EEPROM market, this market has proven to be exceedingly slow to develop for a variety of reasons. Although the market has grown steadily for many
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© 1985 Dataquest Incorporated April 15 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
years, it is still quite small and only recently has begun to settle out on a identifiable set of standard features and applications. During this market development phase, a tremendous amount of the energy of the participating companies has been absorbed by market development and technology development chip and circuit redesign efforts. Now we're beginning to understand the needs and the dimensions of the market better, but at the same time, those who are most responsible for market development are having their market position jeopardized by the entry of larger, more manufacturing-oriented participants.
As a result, Intel, Seeq, and Xicor may have been most responsible for the market development, but the ultimate benefit may eventually accrue to more recent entrants, AMD and Hitachi or Toshiba. The problem, of course, is that while new markets, in their unsettled state, afford individual entrants the opportunity to own a big share of a small protected market, full development of these markets is an expensive and time-consuming task. In fact, it's more time-consuming than merely waiting off to the side for the market to take shape, and for the systems designers to be educated, and in time, turn the high volume manufacturing capabilities on and squeeze the early entrants, who may lack such manufacturing capabilities out of the market.
Technical Leadership
Another strategy that has been adopted by several U.S. manufacturers has been to always try to stay a step ahead of the game, be the first manufacturer to a new speed barrier, be the first manufacturer to a new level of integration, be the first manufacturer to a performance point which manufacturers with lesser technical capabilities are incapable of achieving. While this technical leadership strategy has proven successful many times, especially in the case of Intel with their high speed 2147 4K static RAMs family in the late 1970s and early 1980s, and their market leadership in EPROMs, and even their process in novel architectures in CMOS dynamic RAMs, technical leadership has been shown to be increasingly difficult to sustain over long periods of time, especially when the strategy is pursued at the expense of high volume, low-cost manufacturing capability, and smooth transitions to succeeding generations of parts. Volume producers are refining their process steadily, and in the absence of any prorietary barriers to entry (which may or may not exist) can eventually come close to any performance level having market value.
A technical leadership strategy requires almost flawless execution, and any failure to do so can immediately relegate the company to a secondary position in the market, if they don't also have low-cost manufacturing capabilities.
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Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Infant Mortality
Start-up MOS memory manufacturers, because they lack financial resources or a well-developed product line to buffer them from the wild price fluctuations in the market, will often find themselves in an exposed position. That exposure is roughly proportional to have how close they are to the center of the commodity market in which they play. Thus, a manufacturer with a narrow product line selling dynamic RAMs, EPROMs, or static RAMs, will find himself more vulnerable than one developing a new market or a new technology.
Strategies that position the manufacturer in the center of the market may look good for short periods of time, but in the absence of business reserves in terms of alternative products or significant financial resources, will often lead,as well, to fortunes that turn drastically in a short period of time. This is merely a consequence of small manufacturers participating in a market dominated by much larger manufacturers where the product pricing is subject to significant and rapid declines. The 1985-1986 time period will undoubtedly cause some extreme difficulty for some of the emerging start-ups, who may have just gotten their production up and running and their feet in the market, only to be knocked down by plummeting prices and contraction of demand.
Strategies That Work
One group of strategies that appears to be quite effective in protecting manufacturers from the rapid price declines in the market is to insulate themselves through market or account choice, or by developing greater product line synergy. Manufacturers that sell to the market will find those purchase decisions Isased much more strongly on price than manufacturers who develop good customer relationships, develop product portfolios that sell into specific accounts or specific applications, and instead of selling to the market, sell to the application or to the customer. In this way, they can reduce the importance of price alone on the purchase decision and broaden it to include service, breadth of product line offered, coimnitment during the ups and downs of the market, guaranteed supply during periods of device shortage, guaranteed quality levels for deliveries to that particular account, and close working relationships. That will enable the systems company purchasing the component to maintain a market leadership position in its business through the service that it gets from its component supplier.
Manufacturing efficiencies' principal contribution to the market is low-cost, and for component manufacturers who can't compete strictly on a low-cost basis, users will often pay something above the lowest price in the market for additional service that the component supplier can offer. In some instances, this is more difficult in the commodity memory market than it is, for example, in the customs circuits or microprocessor peripherals market. Nonetheless, there are some opportunities for close user/vendor relationships which can protect the interests of both parties.
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© 1985 Dataquest Incorporated April 15 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
More Product Differentiation
Niche marketers that have been successful have differentiated their product enough to give them an advantage over their competition (a cost or time barrier), but not so much that a major rethinking of the application by systems designers is necessary before production volume can build. The more that the product supplier must do retrain customer's thinking, to convince him that he needs a new feature, the slower will be the market development. A short conceptual step for the systems' designer is the fastest way to product acceptance and market growth. Best they say "Ahai That's just what I was looking for," and, if users want red packages, a vendor will be more successful selling them red packages than trying to convince them that color doesn't matter.
The successes and difficulties that memory makers have experienced over the past five years offer ample evidence of some of the keys to success, and ways to balance off strategic strengths and weaknesses, so as to grow profitably into a relatively secure market position.
(Slide 18)
Based on our experience in the MOS memory market for the past five years, as well as the prospective market developments for the coming five years, what can we say about evaluating the potential for success or failure of the strategies of the various participants in the market? One message that has come across consistently is the belief that every major MOS memory product market will ultimately be dominated by efficient manufacturers, and this means efficient manufacturing over the entirety of the product life cycle. Although manufacturers can certainly be successful in smaller markets through excellence in technology, market knowledge and other focuses of the numerous start-ups, sufficient market growth will invariably throw those markets into the province of manufacturers with highly efficient low-cost manufacturing capabilities. In the absence of first rate manufacturing capabilities, the industry may evolve to the point where new emerging markets are cultivated, developed, and initially exploited by small manufacturers, and later turned over to large manufacturers to. drive processes forward and prices downward, thus pushing the trailblazers out of market.
The experience of the last several years also tells us that the market mainstream standard multi-sourced commodity products has tremendous momentum in the factories of the current supplier base, in the minds of systems designers, and the design-ins in the installed base and in the process familiarity of the component manufacturers. This momentum ensures that the shape of the market for the next couple of years will look very much like the market today, although we will invariably see the gradual fragmentation into specific application memories as well as the displacement of the older technologies and generations of parts.
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© 1985 Dataquest Incorporated April 15 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
(Slide 21)
In looking over the strategies that appear to have been the most successful for manufacturers that are unable to compete on a strictly manufacturing cost basis, it appears that the most successful approach is to tie one's strategy closely to specific markets, specific customers, and specific applications. In this way, manufacturers can be insulated from finding themselves in a market that is only price-driven. Here, they can develop their memory and other MOS product portfolios in a fashion to take maximum advantage of their position with their suppliers or of their market knowledge.
(Slide 22)
We've seen also from the strengths and weakness of all participants over the last five years that a successful long-term strategy participation in the MOS memory market requires strengths in many disciplines. Many of the entrepreneurial ventures that emerged in the early 1980s have been built around individuals who had expertise in several of the areas, but are now having difficulties because they could not present to the marketplace a uniformly strong business front line, and there's nothing like the brutal lessons of the marketplace to make these weaknesses painfully obvious.
Finally, if we look at the opportunities for successful participation in the MOS memory market, there are still several strategic options open to manufacturers.
(Slide 23)
For smaller nanufacturers just coming into the market who are less well-financed than the giants dominating the market, it is almost a necessity to develop strategic alliances in order to supplement your strengths and weaknesses with those of another manufacturer, so that a balanced high quality business can be developed. None of the start-ups and many of the existing firms in the market have insufficient strength and resources to attack these markets by themselves. The tremendous capital requirements for establishment of new fabs, the early vulnerability of manufacturers as their product lines are being filled out and developed, and the time required to develop newer markets along newer application or technology lines, all dictate that new manufacturers can reduce the risks of participation substantially by tying their fortunes in with those of more established producers. It is our perception that often the start-ups listed in the earlier slide do not adequately recognize their own strengths or weaknesses and have been reluctant to enter into strategic alliances with other manufacturers. In the past two years, however, we have seen increasing numbers of extensive cooperative arrangements between production-oriented and between design intensive or process-oriented start-ups and more established or better funded manufacturing-oriented producers. Undoubtedly, this will result in more efficient utilization of fab capital, the natural response to the increasing capital intensity of the industry.
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(Slide 24)
For large scale participation in the MOS memory market, manufacturers are left with two options: the first is to adopt the strategy of emulating the Japanese successes of the past several years, adopting a long-term strategic outlook based on manufacturing efficiencies, low-cost production and product obsolescence; the second for manufacturers that find themselves unable to compete on a strict price basis. They still have an opportunity to be a mainstream supplier in the MOS memory business.
But by no means will these manufacturers even be able to ignore the criteria for success for large volume producers outlined in one of the earlier slides. They will have to supplement their shortcomings as a high volume lowest cost manufacturer with a significant amount of what we'll call the American plan, based on applications orientation, design expertise, excellence in marketing, close user-vendor relations and other methods often found among the strategies of the emerging producers.
(Slide 25)
The only alternative left is to accept a position as a niche market memory supplier, which will invariably limit your participation to the smaller, but perhaps more profitable markets, which are insulated from the mainstream either by their size, unique applications, or specific customers. The drawback here is that the relatively low volumes of these markets and design intensity will reduce the other learning curve attributes that accrue to participants in the mainstream part of the market.
Smaller participants in the market can always take advantage of a more deliberate effort to learn more from each of their production efforts, thereby transferring process expertise to other parts of their product line with a more limited exposure to the ups and downs of the mainstream part of the market.
(Slide 27)
All of these can afford manufacturers opportunities to participate in the MOS memory market of the second half of the decade, but at the same time, it must be recognized that the mainstream part of the market offers both tremendous profit benefits, as well as potentially significant business risks that are unable to smaller producers.
- 11 -
@ 1985 Dataquest Incorporated April 15 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Connpany / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
— T°T'- T-i:::- DataQuest.
KOS MEWORV STRATEGIES
Face - to -Face with the New Maricet R e a l i t i e s
Dataquest.
MOS MEMORY STRATEGIES
OUTLINE
Dramatic Change in MOS Memory Market 19B0-1985
Manufacturing Ef f i c i ency Dominates the Commodity Market
S t r a t e g i c Response and Competit ive P o s i t i o n i n g
Beat 'em. Join 'est, Avoid 'em
Opportuni t ies and S t r a t e g i e s for Success
- 12 -
© 1985 Dataquest Incorporated Apr i l 15 ed. -Reproduct ion Proh ib i t ed
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Dataquest
THE CHANGED HOS MEMORY MARKET
MARKET SHARES BX HOME BASE OF PRODUCER
U . S . ^
J a p a n ^
Europe
ROW
T o t a l Revenues
(*B |
1$90
74%
'^^*___
2
0
loot
$ 2 . 4
1 ^ 8 4
44% \
5
0
UOt
S G . 4
(1985)
35%
60
4
1
100%
S 6 . 0
(1986)
l e s s
more
l e s s or e q u a l
more
100%
$ 7 . 2
- T t i T . -•+'°''-_ SJr^-KO'h.
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THE CHANGED
MOS
MOS
MEMORY
MEMORY MARKET
REVENUES
1980
T e x a s I n s t r u m e n t s I n t e l MosteK M o t o r o l a
— NEC
— H i t a c h i N a t i o n a l AMD
— F u j i t s u _ T o s h i b a
$ 3 3 0 $308 $ 2 5 9 $ 1 5 5 $150 $149 $ 1 3 5 $107 $ 1 0 5 $ 75
Source OATAOUEST
- 13
gj 1985 Dataquest Incorporated April 15 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
o^ vf
7^-—T. : : :- BataqiMMrt
^ — ' • •
THE CHANGED HOS
MOS MEMORY
Ccnpanv
Hitachi NEC Texas I n s t . Fuj i t su Toshiba I n t e l Hostek Motorola Mitsubishi AMD
MEMORY MARKET
REVENUES 1964
Revenues
S897 $713' $654 $512 S396 $373 $350 $305 $27B S260
Change in Ranl<
+ 5 + 3 ^ - 2 + 5 — + 5 ~ - 4 - 4 - 4 4- 9 — - 2
THE CHANGED MOS MEMORY
MEASURES OF (%
Pep 5 Top 10 Top 20
Total Number o f Suppl iers
MARKET
MARKET CONCENTRATION OF TOTAL $)
1975
61.4% 78.6% 97.5%
33
1 9 B 0
5 3 . 3 % 7 8 . 7 % 94.4%
41
Sou'ce
1984
52.4% 75.6% 87.7%
60
DATAOUES^
- 14 -
© 1985 Dataquest Incorporated April 15 ed.-Reproduction Prohibited Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
1— C l ^^^T -, D a t a q u e s t
THE KEK
MOS MEMORY
Ccinpany
Cypress Semiconductor Exel Microe lec tron ics Hyundai E l e c t r o n i c s Innos Integ rated Device Tech . I n t e r n a t i o n a l CMOS Tech . L a t t i c e Semiconductor Micron Technology Modular Semiconductor MOSel Performance Semiconductor Quasel Seeq Technology S i e r r a Semiconductor T r i s t a r VISIC V i t e l i c
VLSI Technology Wafer Scale I n t e g r a t i o n Xicor
MARKET
START-
S t a r t Date
1982 1983 1983 1978 1981 1983 1983 1979 1983 1984 1984 198 3 1981 19B4 1983 198 3 1984
1981 1983 1978
DJVIRONMENT
DPS SINCE 1978
Lead Funding
U.S. -Venture U.S . -Ven tu re Hyundai-Korea U.K. Gov't U.S. -Ven tu re U . S . - v e n t u r e U . S . - v e n t u r e U.S. -Venture U.S./Japan U.S./Taiwan U.S . -Venture U.S./Taiwan U.S. -Ven ture U .S . -ven tu re Samsung-Korea U . S . - v e n t u r e Taiwan-U .S. v a r i o u s U.S. -Ven ture U . S . - v e n t u r e U . S . - v e n t u r e
Products
Fast SPAM EEPROM SRAM/EEPROM P a s t SRAM/DRAM F a s t SRAM CMOS/EEPROM P a s t SRAM/EEPROM DRAM CMOS DRAM P a s t SRAM F a s t SRAM CMOS DRAM EPROM/EEPROM ROM (ASIC) DRAM F a s t RAM CMOS ORAM
RDM /EE /Fast SRAM EPROM/EEPROM EEPROM/NVRAM
- 15 -
© 1985 Dataquest Incorporated Apr i l 15 ed.-Reproduct ion Prohib i ted
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Dataquest.
THE NEW MARKET ENVIRONMENT
What's the Outlook Today 19SS MOS Memory Market
Japan makers have something that most U .S . makers don't
Expensive to p a r t i c i p a t e . . . the c o s t has grown fas ter than the market
No shortage o f new s u p p l i e r s . . . a n d new niches
Recognized inportance of MOS memory to r e s t of product l i n e
Technology , iwrket s i z e , a l l advanced remarkably:
$2 .4 b i l l i o n o f 5\M production (1980) t o
$6 .3 b i l l i o n o f 2um production (1984)
_ r^'-^^;?!- Dataquest,
\r) ¥ rr^ vl' lAf
}^ W-
^ < ^ ^ K'.A "V
KEYS TO MARKET SUCCESS
CHARACTERISTICS OF LEADING LARGE PRODUCERS
c<^r/' High Volume Manufacturing Efficiency
Smooth Transitions to New Products
Technically Advanced
Great Financial Resources—Often Large Captives
Product and Process Synergy
U-^'-'^
[cH* f'"" ^
- 16 -
© 1985 Dataquest Incorporated April 15 ed.-Reproduction Prohibited Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
d>v iu
3j-^» ppn^ iioi^"^
-_ Z^ZZZT <:•.:- Dataquest.
4 STRATEGIC RESPONSE TO THE NEW REALITIES
Emulate...the winners
Differentiate.. .the product
Educate... the naiKet
Inrvsvate
Insulate...yourself and your markets
Consolidate...resources with another company
Capitulate
(jvx i^-^
Dataouest.
MEMORY MAKER'S DILEMMA..
DRAM Market
Dual Port SRAM Market
$]j6 million/day
3 $10 million/year
- 17 -
© 1985 Dataquest Incorporated April 15 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Dataquest,
THE LIMITS TO NICHE MARKET STRATEGIES
Extended development/growth cyc le
Design i n t e n s i v e (and redes ign , too)
When na rkets get l a r g e , they become a t t r a c t i v e to we l l - f inanced companies
_ ZlLTZT'.:•.} - Dataquest
NICHE MARKET STRATEGIES — POSITIVE SIDE
• Protected
• Low-visibility
W Profitable
• Price-stable
- 18 -
© 1985 Dataquest Incorporated Ap r i l 15 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
/66 n >^pi^
Dataquest.
NICHE MARKET DILEMMA...
Are there enough niches to go around?
Z rrr.:!:!' Dataquest,
MARKET DILEMMA FOR FAST-BREAK STRATEGIES
Efficient manufacturers will eventually move down learning curve and beat you on price
(^J>y? ci^Tyjl^X^
pi^e^ruL.
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ftrn^^ f^4>^'_ — cUic^ tO^KiX-r-^'-f^.'
•fu-Zj
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SxJf^li^ ^ . ^ ^ > ^
•t-
^v)t< Lu.ui
- 19 -
© 1985 Dataquest Incorporated April 15 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
v^ >. tlHI
Ol"!" ^
Dataquest.
MARKET DILEMMA FOR TECHNOLOGV LEADERS:
Flawless performance required
1 . ^ ^
Dataquest.
DILEMMA FOR F INGERS OF NEK PRODUCT MARKETS
Market aevelopnent time exceeds new product des ign time
- 20 -
© 1985 Dataquest Incorpora ted A p r i l 15 ed. -Reproduct ion P r o h i b i t e d
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Dataquest.
CONCLUSION * I
Every »ajor MOS wemory product narket will ultimately be dominated by efficient nanufacturers
Dataquest.
CONCLUSION *2
The BBfket mainstream —standa rd , mul t i sou rced , comaodity products—has tremendous nomentuni, and w i l l Terrain the p i i n a r y revenue growth v e h i c l e and p rocess d r i ver fo r the fo reseeab le f u t u r e .
- 21 -
© 1985 Dataquest Incorporated Ap r i l 15 ed.-Reproduction Prohibited Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Dataquest,
COROLLARX TO CONCLUSION 12
F a i l u r e to develop the a b i l i t y to compete in the narIcet mainstrean w i l l poee a ser ious l i m i t to long - te rm revenue growth and p r o c e s s development
Z2V(!!! Dartaquest.
CONCmSION *3
Successful strategies—for those who can't compete in #1 or t2—will be those that t ie products t ightly to specific narRets, specific customers, and specific applications
- 22 -
© 1985 Dataquest Incorporated April 15 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
a '^l-r\/llir\
,_ 'T ' "^Ti!i!i' Dataquest .
CONCLUSION *4
Strength i s required in nany discipl ines:
Process Product planning Design Manufacturing excellence Marketing
Forward view Management
No single one or two elements is adequate for long-term success in the MOS memory market.
P;:::;; Dataquest.
OPPORTUNITIES FOR SUCCESSFUL PARTICIPATION
Strategic Alliance:
Identify your strengths and wealcness
and
Align yourself with a partner for mutual benefit
^ . if^a-^y^rfU- __
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- 23 -
© 1985 Dataquest Incorporated A p r i l 15 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Dataquest.
OPPORTUNITY FOR SUCCESSFUL PARTICIPATION
For large scale market presence, 2 choices:
1 . 100% Japanese Style
2. 901 Japanese Style
plus
60% American Plan
Dataquest
OPPORTUNITY FOR SUCCESSFUL PARTICIPATION
Resignation to niche market presence...
• smaller markets, but more profitable
• Bore secure markets
• nemory, itot MEMORY
Source DATAOUES^
- 24 -
© 1985 Dataquest Incorporated April 15 ed.-Reproduction Prohibited
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Dataquest
LITHOGRAPHY TECHNOLOGY: TODAY AND TCM4ORROW
Shoichiro Yoshida Director emd General Manager
Industrial Supplies and Equipment Division (Nikon) Nippon Kogaku K.R.
Mr. Yoshida is Director and General Manager of the Industrial Supplies and Equipment Division of (Nikon) Nippon Kogaku K.K. Previous positions at Nippon Kogaku K.K. include Design Section Manager of the Scientific Instruments Department in the Instrument Division, General Manager of the Designing Department in the Industrial Supplies and Equipment Division, and General Manager of the Sales Department in that division. While Mr. Yoshida was in the designing divisions, he was in charge of developing astronomical telescopes, spectrophoneters and monochrometers, ruling engines, optical precise measuring machines, and semiconductor equipment such as measuring instruments and wafer steppers. Mr. Yoshida received a Bachelor of Engineering degree from the Faculty of Precision Engineering at Tokyo University.
Dataquest Incorporated JAPANESE SEMICONDUCTOR INDUSTRY CONFERENCE
April 14-16, 1985 Hakone, Japan
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Lithography technology , Today and Tomorrow
Now is the VLSI era represented by 256K DRAM.
We find some manufacturers to have already succeeded in developing
prototypes of 1 M DRAM in research and development level and to start
feasibility study for establishing mass-production technologies.
I would like to talk about device integration trends for the coming 10
years and lithography technology movements to cope with it under the these
circumstances.
- 1 -
Dataquest Incorporated, A Subsidiary of AC. Nielsen Company /1290 Ridder ParK Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
F u - t u i - ^ F ' o r - ^ s c as!-t^ o f L.±-t.tio^r~skptiy T ^ c l ^ i n o X o ^ y
Min. Linewidth Overlay Accuracy
0 •-
1985 86 87 88 89 90 91 92 93 94 95 96 97
Optical Lithograpliy ^
X-ray Li ttiograptiy .
' >
F » r - o t > X e i n s e m d S o X u - f c i o n s o f O p - t ^ A c a X L i t l i o g r - a p t i y
1. Resolution Higlier Nuaerical Aperture
lap
Oeve lopaent of Optical System for U.V.Light
Sljorter Wavelength —r~ luprovement and Development of Light Source
2 . Alignment "C n
Multi-layer r e s i s t
Die-by-Die Alignment
Com posi te-c hip
Higher Speed of Each Function 3 . Throughput
Imprx)vement of Light Source and Resist
A . Re l iab i l i ty—, Part ic le —r- Full-Automatic System
L Higher Detectabi l lty of Part i c le
Se lf-D iagnost ic System
I Computer Aided Machine Control System ( F M S )
- 2 -
Dataquest Incorporated, A Subsidiary of AC. Nielsen Company /1290 RIdder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Lithography Technology, Today and Tonorrow
^ H , illllHl{I&tt24 6 K D R A M ^ C - R i ^ ^ t i ' S V L S I l^f^S: l«I*>; iTl^S.
• rT'JCR8iDL/^;p-C l i lM®JiCf^S:^TL , Jl«^ta«?®tfegif i c A o Tl^SifelUt;*,
^<D V ^j:^ifi<D^iV^^ 1 P ^m(r)f^-<>( 7.mmtt ^tlKMS^-r ^ Utho-graphy
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- 3 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Dataquest
Dataquest
THE EMERGING ASIAN SEMICONDUCTOR INDUSTRY
P. June Min Senior Managing Director
Goldstar Semiconductor, Ltd,
Dr. Min is the Senior Managing Director of Goldstar Semiconductor, Ltd., and is responsible for semiconductor, computer, and communication systems manufacturing and marketing. He is also Director of Goldstar Software, Ltd., and Director of the Korea Information Science Society. Before establishing Goldstar Semiconductor, Dr. Min was a member of the Board of Directors of Goldstar Tele-Electric Co. Ltd., in charge of information and communication systems. Prior to joining Goldstar, he was a program manager at Xerox and spent 10 years managing several computer software/ hardware development projects at IBM Corporation where he was the recipient of five IBM contribution awards. Dr. Min received a B.S. degree in Electronics Engineering from Yonsei University in Korea, an M.S. degree in Electronics Engineering from Purdue University, and a Ph.D. degree in Computer Science from Purdue University.
Dataquest Incorporated JAPANESE SEMICONDUCTOR INDUSTRY CONFERENCE
April 14-16, 1985 Hakoiie, Japan
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, GA 95131 / (408) 971-9000 / Telex 171973
The Emerging Asian Semiconductor Industry
P. June Min
Goldstar Semiconductor
Seoul, Korea
During the last decade, semiconductor industries of U.S.
and Japan have been playing the leading role in both the
technology development and new product introduction. This .. .
trend is not expected to change within the next decade, and
the pace of technical developments in the two countries is
even accelerating. Besides the two countries, significant
industrial activities in semiconductors are found in Europe,
Canada and a few far eastern countries including Korea and
Taiwan. The purpose of this talk is to describe the projected
growth path of a semiconductor industry in a developing country
with the specific example of Korean semiconductor industry. If
Korean semiconductor industry prove to be successful in the next
decade, it could serve as a model .of setting up high technology
indiistries in developing countries.
Semiconductor technology is viewed as essential to be success
ful in many other industries. Due to this strategic importance,
the big industrial conglomerates in Korea have made strong
commitments to develop semiconductor technology despite many
difficulties. For these companies to be successful, several
Strategic factors - market, technology, people, and finanical
resources - should be carefully laid out and executed. The need
for large capital investment, large gap in technology compared
to U.S. or Japan, lack of qualified personnel in both technology
and marketing, all provide substantial difficulties to Korean
semiconductor industry. The talk will address how some of the
challenges would be dealt with by discussing actual examples.
- 1 -
Oataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
THE EHIERGBNG KOREAN SEMICONDUCTOR INDUSTRY
-STATUS AND FUTURE PROSPECTS-
P. JUNE MN
I GoldStar Scmicondutor, Ltd. SEOUL. KOREA
THE ESmEROINS KOREAN SEMICONDUCTOR INDUSTRY
-PRESENTATION OUTLINE-
INTRODUCTION
GROWTH PROJECTION
STRATEGY ELEMENTS
OPPORTUNITY FOR PARTNERSHIP
- 1 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
KOREA:THE DEiaoaRAPHY IN 198S
POPULATION
GNP ($B)
41,209,000
Per Capita GNP($)
AREA( miles')
ECONOMY S
AGRICULTURE
INDUSTRIAL
SERVICE
TR
86.3
2,094
38,200
UCTURE
14.6%
34.0
51.4
KOREAN GROWTH PATH TOWARD AN ADVANCED NATION
YEAR
1962-1966
1%7-1971
1972-1976
1977-1981
1982-1986
1987-1991
1984 GNP:
GNP GROWTH RATES(7o)
—
8.7
10.1
5.5
7.2
8.0
$80 BILLION
: . : •
GOAL
BASE FOR DEVELOPMENT
INDUSTRIALIZATION
GROWTH
GROWTH
STABILITY
TOWARD AN ADVANCED NATION
SOURCE : BANK OF KOREA ECONOMIC PLANNING BOARD
- 2 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
STATISTICS-I: SEMIGONDUCTOR MARKET SIZE
WORLD TOTAL
NORTH AMERICA
JAPAN
WESTERN EUROPE
REST OF WORLD
KOREA
KOREA/WORLD(%)
1983 18,685
8.286
5,568
3,370
1,461
180
0.96
(MILUONS OF DOLURS)
1984 25,767
12,008
7,517
4,212
2,030
290
1.13
1985 32,856
15,562
9,426
5,305
2,563
401
1.22 SOURCE:DATAQUEST
STATISTICS-I: CAnTAL INMESTMENT FOR SERHCONDUCTOR
(MILLIONS OF DOLURS)
1984 1985 1986 1987 1988 CAG %
KOREA 220 346 456 597 701 33.6
U. S. A. 3,438
JAPAN 3,922
37.8*
58.5*
* CAG% FOR U. S. A. AND JAPAN ARE FOR PERIOD BETWEEN 1977-1981.
SOURCE:GOLDSTAR SEMICONDUCTOR, LTD. JAPAN ECONOMIC J.
- 3 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
STATISTICS-1: SEMICONDUCTOR PRODUCTION
(MILLIONS OF DOLURS)
1984 1985 1986 1987 1988 (*^||)
TOTAL WORLD 25,767 32,856 37,283 41,149 49,990 18.0 CONSUMPTION
KOREA 205 403 655 923 1,250 57.1
%0F WORLD 0.8 1.2 1.8 2.2 2.5
SOURCE: DATAQUEST GOLDSTAR SEMICONDUCTOR, LTD.
STRATEGY ELEMENTS
MARKET TECHNOLOGY TECHNICAL PERSONNEL FINANCIAL RESOURCES ROLE OF GOVERNMENT
- 4 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
STRATEGY ELEM£NTS:MARKET
VERTICALLY INTEGRATED MARKET
DOMESTIC MARKET
WORLD MARKET
-OPEN MARKET
-FOUNDRY/CONSIGNMENT
BUSIMESS ARRAHBEHEHTS WITH OVERSEAS FIRHS GOLDSTAR SEMICONDUCTOR
-
SAMSUNG SEMICONDUCTOR & TELECOMMUNICATIONS
HYUNDAI ELECTRONICS
KOREA ELECTRONICS
DAEWOO
ANAM INDUSTRIAL, CO.
- AT & T
LSI LOGIC
AMD
- SHARP INTEL
- INMOS
- TOSHIBA
ZILOG
MMI
MICRON TECH
Tl
- NORTHERN TELECOM
- Vi ORLDWIDE PACKAGING SERVICE
- 5 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
STRATEGY ELEMENTS : TECHNOLOGY YZ.M^ TECHNOLOGY FRODUCT^
1984 3 MM NMOS 64K DRAM 8BIT MICROPROCESSOR(Z80) 16K SRAM
3/iM CMOS GATE ARRAY 1985 2MU NMOS 256K DRAM
2 m CMOS 64K SRAM 256K DRAM GATE ARRAY
TECHNOLOGY CONSIDERATIONS
-TECHNOLOGY TRANSFER AND OWN R&D
-PROCESSING AND DESIGN
-INDUSTRY-UNIVERSITY COOPERATION
- 6 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
STRATESY ELIiEMTS: TECHNICAL PERSOMHEL REQUIREMENTS OF FIVE LARGE CORPORATIONS
Ph. D M. S. B. S. Tech Sales($iVI)
SOURCE;
1985 18
160 590 473 403
MTI, KOREA
GOLDSTAR
1988 91
320 1,150 1,146 1,250
SEMICONDUCTOR, LTD
STBATEO? Rmmn - ROLE OF GOVERNHEHT
PAST PERFORMANCE:
• IDENTIFY THE IMPORTANCE OF SEMICONDUCTOR TECHNOLOGY
• PARTIAL FUNDING FOR TECHNOLOGY DEVELOPMENT
(8 BIT fiC, VTR IC)
FUTURE D IRECTION:'
• SUPPORT THE GROWTH P U N OF INDUSTRY
• EMPHASIS AND FUNDING FOR R & D
- 7 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
GOiL IF mmm SEISICOMDUCTOR INDUSTRY
• ESTABLISH SEMICONDUCTOR TECHNOLOGY TO SERVE THE
COUNTRrS TRANSITION INTO AN ADVANCED INFORMATION
SOCIETY
• PROVIDE A MUTUALLY BENEFICIAL BUSINESS OPPORTUNITY
TO WORLD CLASS ELECTRONICS FIRM IN THE DESIGN AND
MANUFACTURING OF ADVANCED SEMICONDUCTOR COMPO-
NENTS AND SYSTEMS
OPPORTUNITY FOR PARTNERSHIP
r/IANUFACTURINQ : COST ADVANTAGE
MARKET SHARE
ENGINEERING TALENTS
D E S I G N : ENGINEERING TALENTS
MARKET UNIQUENESS
- 8 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
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THE RECENT DEVELOPMENT OF THE INFORMATION INDUSTRY IN TAIWAN
Irving T. Ho President
Institute of Information Industry
Dr. Ho is President of the Institute of Information Industry in Taiwan. He is also Vice Chairman of the National Science Council. His responsibility at both organizations is to upgrade information technology and promote information industry in Taiwan, ROC. Previously, he was Director-General of the Hsinchu Science-Based Industrial Park. Prior to that, he was with IBM for 16 years,during which he won the TBM invention achivement award 12 times and was granted 36 patents in the field of computer hardware and subsystems. During leaves from IBM, he taught at Stanford University for one quarter and served as Far East Chair Professor at the National Taiwan University for one academic year. Dr. Ho has an M.S. degree and a Ph.D. in Electrical Engineering from Stanford University. He served as a research associate at Stanford and a consultant at Fairchild Semiconductor after his graduation.
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Dataquest Incorporated JAPANESE SEMICONDUCTOR INDUSTRY CONFERENCE
April 14-16, 1985 Hakone, Japan
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
A REPORT ON THE RECENT DEVELOPMENT OF INFORMATION INDUSTRY IN TAIWAN, R.O.C,
INTRODUCTION
Since the R.O.C. government made it a policy in 1979 to develop her information industry as one of her strategic industries, the industry has built up tremendous momentum and achieved an astoni shing growth rate in recent years. This report will provide the audience an overview of R.O.C.'s information industry via recent development and activities in the following selected areas.
I. ' The Growth in Export
II. Products and Manufacturers
III. The Building-Up Semiconductor Industry
IV, Industry Promoters
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- 1 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
I. THE GROWTH IN EXPORT (1 of 5)
0 For years, the textile industry had been the leading exporter among the R.O.C. industries.
o In 1983, the electronics and electrical industries combined outgrew the textile industry and became the R.O.C.'s No. 1 exporter.
INDUSTRIAL EXPORT (in B. US$)
__ INDUSTRY __ 1983 1984
E 8c E , 1^4.85 ( 19.Oil;) 6.58 ( 21.6%)
a^'Xs Textile \sr^"^-^4.60 ( 18.3%) 6.00 ( 19.7*) Machinery 3.34 ( 13.3%) 3.83 ( 12.63!)
Others 12.31 ( 49,4X) 14.04 ( 46.1%)
TOTAL 25.10 (100.0%) 30.45 (100.0%)
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Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
I. THE GROWTH IN EXPORT (2 of 5)
0 The information industry began to have export of products in 1980, and amounted to only about five millions in US$.
0 Among all electronics products, information products have been enjoying the highest growth rate in export.
ELECTRONICS PRODUCTS EXPORT (in M. US$)
__ PRODUCTS __ 1983 1984
Consumer 1,404 ( 64.0!!;) 1,604 ( 55.8%)
Telecomm 478 ( 21.8X) 354 ( 12.38;)
Information 289 ( 13.2«) 891 ( 31.OX)
Instrument 23 ( 1.0%) 27 ( 0.9%)
TOTAL 2,194 (100.0%) 2,876 (100.0%)
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Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
I. THE GROWTH IN EXPORT (3 of 5)
0 The growth in export has been very impressive in almost the entire spectrum of the products the information industry produced,
0 In 1983^ the trend has also been reversed in the content of the information industry export. The last two years data show that the growth in product export has reached almost twelve times as fast as compared to that for the components and parts.
INFORMATION INDUSTRY EXPORT (in M. USS)
__ PRODUCTS .M^^- 1982
Micro Computer
Di sk Dr i ve
Pr i nter
Terminal
Moni tor
NES Peripheral
Product Total
Components and Parts
TOTAL s
2
< 1
> 4
21
34
2
64 (40X)
96 (60%)
160
_ 1983 _
12
15
12
97
131
22
289 (69%)
129 (31%)
418
_ 1984 _
152
86
23
207
319
104
891 (89%)
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4 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
I. THE GROWTH IN EXPORT (4 of 5)
0 In 1984, R.O.C.'s information industry exported products, components and parts to over seventy countries, with more than 90% of the export went to only six countries.
0 Efforts .are being made by the government and the industry to diversify the market, particularly to the Japanese market.
DISTRIBUTION OF INFORMATIION INDUSTRY EXPORT BY DESTINATION (Value in %)
Total Micro Disk DESTINAT'N Exprt Cmptr Drive Prntr Trm'l Mnitr Othrs
U.S.A. 69.1 59.9 85.3 74.3 76.9 71.1 58.2
U.K. 7.7 3.5 2.2 - 2.6 17.3 4.4
Hong Kong 4.8 8.4 3.4 4.5 2.6 1.5 9.8
Netherland 3.9 1.0 0.2 18.9 11.1 1.9 1.9
W. Germany 2.8 3.3 1.1 0.4 0.2 0.2 9.7
Canada 2.3 1.9 0.7 0.1 0.3 3.9 3.0
Ireland 2.0 9.6 - - 0.3 1.5
Australia 1.1 1.-9 0.5 0.3 1.7 0.3 1.5
Singapore 0.8 1.8 1.0 0.3 0.1 0.1 1.8
Belgium 0.5 0.1 0.1 - 2.1 0.1 0.1
Others 5.0 8.6 5.5 1.2 2.1 2.1 9.6
TOTAL 100.0 100.0 100.0 100.0 100.0 100.0 100.0
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Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
I. THE GieOWTH IN EXPORT (5 of 5)
The current goals set for the R.O.C.'s information industry are to reach the following by the end of 1980s:
0 A total of US$4.6B worth of annual production, equivalent to a 23>.of then worldwide aarket of information products
0 A total of US$3.28 worth of annual product export, or 703! of the 4.6B production
0 A domestic market of US$2.3B, or IX of then worldwide market.
B.O.C.'s TARGET FOR 1989 (in B. US$)
Expcted Annual
CGR 1983 1984 1989 (84-89)
R.O.C. Information Product Export .289 .770 >>> 3.2 33.0!K
(.891; (29.2S;)
Worldwide Infor. Product Market 96.8 112.0(*) >>> 230.0(*) 15.53!
R.O.C.'s Share 0.33! 0.73! 1.43! (0.83!)
* Source : ADL ( ) 1984 actual value, and correspondingly reduced CGR
requ irement
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Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose. CA 95131 / (408) 971-9000 / Telex 171973
II, PRODUCTS AND MANUFACTURERS (1 of 4)
0 1436 companies contributed to the US$891M export of information products in 1984.
0 70II{ of the export were made by on ly 12 leading companies. Although the shares contributed by the leading 25 companies were more evenly distributed as compared to the 1983 data.
100 r-
No. of Companies
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Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
II. PRODUCTS AND MANUFACTURERS (2 of 4)
0 Major manufacturers are (in alphabetical order)
...DOMESTIC. ADI Ca.l -Comp Continental Liberty Lung Hwa Mi tac Multi tech Sampo Taiwan Telecom Tatung TECO
...FOREIGN Ampex Atari Taiwan Capetron i c Digital Taiwan Primages Qume Taiwan Wang Taiwan WYSE Zenith Taiwan
0 Tatung took over from Digital Taiwan the position of No. exporter of information products in 1984.
THE LEADING CONTRIBUTORS TO PRODUCT EXPORT __.
COMPANY Mi cro Cmptr
Disk Dr i ve Prntr Trm'1
ADI Ampex Atari Cal-Comp Capetron i c Continental Digital Liberty Lung Hwa Mi tac Multi tech Primages Qume Sampo Telecom Tatung TECO Vang WYSE Zenith
X X
x x x
x x
x x
X X
x x
x x
Mni tr
X X
x x x
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Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
II. PRODUCTS AND MANUFACTURERS (3 of 4)
MICRO COMPUTER
o About 50 companies export 8 bit machine. Average FOB around US$250
0 AboutC^O/companies export 16 bit machine. Average FOB arounoOSSlOOO
o Monthly shipment: 10,000 - 20,000 Units
DISK DRIVE ^ ^. (1*^'" ^^•vy^ ^
0 No export until the second half of 1982
o About 17 companies export floppy disk drive.
0 More than 6 companies export micro-Winchester disk drive.
PRINTER
o Although the printer export had a 913! increase in 1984 as compared to 1983, it has the lowest growth rate among the major products.
0 Eight companies exported printers in 1984. Higher growth is expected for 1985 as more companies are getting ready to start their production.
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Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
II. PRODUCTS AND MANUFACTURERS (4 of 4)
TERMINAL & MONITOR
o It has been built up based upon the successful TV Industry to be the stronghold of R.O.C.'s information industry.
0 R.O.C. is generally recognized as the world's No.l monitor exporter.
0 About 30 companies export terminals and monitors. At -. least 10 have the capability to deliver more than lOK
units per month.
0 A total of 3,500,000 units were exported in 1984.
0 Majority of the components and parts are locally supplied -- 70% in quantity and 503! in value.
0 Color tubes and IC chips are mostly imported from Japan. Local tube makers and semiconductor industry are getting to be more competitive.
PC. / .^
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Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
III. THE BUILDING-UP SEMICONDUCTOR INDUSTRY (1 of 4)
R.O.C.'s semiconductor industry comprises three major segments:
0 Wafer Manufacturing 0 IC Fabrication 0 IC Packaging.
WAFER MANUFACTURING
0 There are two companies producing wafers.
o Tatung Co. manufactures 2''-2.5'' wafer -- using Floating Zone process -- for diod and transistor fabrication.
0 Sino-American Silicon Products, Inc. manufactures 4" wafer -- using CZ process -- to supply local semiconductor companies.
IC PACKAGING
0 R.O.C. started to build up the labor intensive IC packaging business in 1967, and now has more than 10 companies engaging in this business.
0 Export value increased from US$124N in 1978 to US$326M for 1983, at an annual growth rate of 21.3!K.
IC FABRICATION
0 The Electronic Research and Service Organization (ERSO) of the Industrial Technology Research Institute serves as R.O.C.'s technology promoter for IC fabrication.
0 There are four major manufacturers: UMC, Vitelic, Quasel, and Mosel.
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Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
III. THE BUILDING-UP SEMICONDUCTOR INDUSTRY (2 of 4)
IC FABRICATION continued
AJ ERSO
1 / ^
R.O.C. started her IC fabrication in 1977 by funding an XR5. 0 * s project to set up an IC experimental p l a n t with RCAJ technology,
ERSO now possesses 2 micron Silicon-gate CMOS technology with single poly an~d double metal, and has production capability for the following products:
-- Linear and consumer ICs -- 8-bit microprocessor -- 16-128 KB ROM.
o ERSO's recent technology development include: -- Upgrading to 1,5 micron technology level -- Developing a CAD environment to upgrade VLSI design
capabi1i ty -- Establishing a low cost and fast turnaround (3 wks
from logic complete to prototype) custom IC design environment for gate arrays
-- Setting up a common IC design center to support local IC industry and facilitate technology transfer.
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Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
III. THE BUILDING-UP SEMICONDUCTOR INDUSTRY (3 of 4)
IC FABRICATION continued
B. MANUFACTURERS
C u M c ] ^ ^36,/n
[ Vitelic, Quasel, Mosel y
0 Established in 1980 with technology transferred from ERSO. Recently invested US$2.5M to set up an IC design company in the silicon valley in U.S.
0 Product lines are similar to that of ERSO. The most well-known consumer products include telephone dialer chips, melody chips, and time-keeping chips.
_- I |3,ncU- 5 ^ — "" ^ ,-, < ''
0 All three are newly established with venture capital and local investments.
o Focusing primarily on design, engineering and manufacturing of memory ICs
0 Capable of producing 16K SRAM with 2 micron CMOS and 64K DRAM products with 1.5 micron CMOS technology
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Dalaquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
III. THE BUILDING-UP SEMICONDUCTOR INDUSTRY (4 of 4)
IC FABRICATION -- continued
C. FUTURE INVESTMENT
In the next 3 to 5 years, all four companies have plan to invest heavily in the development and production of large capacity memory chips.
PLANNED INVESTMENT
Investment
Targetted Products
UMC
USSIOOM
EPROM SRAM and Mi cro-proc'or
Vitelic
US$ 55M
DRAM
Quasel
USSIOOM
DRAM
Mosel
US$ 40M
EPROM SRAM
o These companies plan to continue to cooperate with ERSO and to pursue the 'Jntershore' o^peration in order to acquire up-to-date techno logy," To maintain low development cost, and to have easy access to the market.
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Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Parl Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
IV. INDUSTRY PROMOTERS _ a. „ii.ju{ L^J^ ^- ^^ Four organizations are heavily involved in the promotion of R.O.C.'s information industry.
•lop.ent Bureau (IDB) -M.^-^ U^. M^^"^ i^'''-'i) 0 Industrial Deve; -- Overall responsibility to help develop RTO.C.'S infor
mation industry
0 Institute for Information Industry (III) -- Information industry planning -- Manpower development for information industry -- Software technology upgrade
0 Electronic Research and Service Organization (ERSO) -- Hardware technology upgrade
0 Science-Based Industrial Park Administration (SIPA) -- Development of a 5000-acre industrial park to provide^
an ideal environment for technology-intensive industries
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- 15 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
• V - - ^ ^ " " f Dataquest
Dataquest
STATUS QUO AND TOMORROW, JAPANESE SEMICONDUCTOR INDUSTRY
51 'iocki: x + s Hlroshi Shima
Director of Industrial Electronics Ministry of International Trade amd Industry (MITI)
Mr. Shima is Director of Industrial Electronics in the Ministry of International Trade and Industry (MITI). Prior to his current position, he had extensive experience in industrial policies and technology, and most recently was Director of Cast and Wrought Products of MITI. In addition, he worked temporarily at the Ministry of Finance, Science and Technology Agency and Economic Planning Agency. Mr. Shima received a Bachelor of Engineering degree in Precise Mechanical Engineering from the University of Tokyo.
Dataquest Incorporated JAPANESE SEMICONDUCTOR INDUSTRY CONFERENCE
April 14-16, 1985 Hakone, Japan
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
I. The basic Japanese approach to high-technology industries,
including the semiconductor industry
(1) The rapid growth of high-technology industries is extending
economies, increasing world trade, investment, and technology,
and even assisting the recovery of the world economic situation
while improving our standard of living.
(2) The electronics industry is the most important of the
several high-technology fields, and forms the basis for further
technological development. The semiconductor industry is the
core of electronics and the basic motive force supporting high-
technology development.
(3) Additional trade, investment, and technological exchange
in this field is the key to overall improvement in world trade.
(4) The main participants in the semiconductor field, Japan
and America, should strive for even freer semiconductor trade,
and work to avoid regulative actions while eliminating any
existing trade barriers.
- 1 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Connpany /1290 RIdder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
II. The promotion and results of exchanges in high-technology
industries between Japan and America
(1) The progress made by the U.S.-Japan Work Group on High-
Technology Industries, which was set up in May 1982, is
especially important (refer to Appendices 1, 2).
(2) Concrete benefits have resulted, such as the adoption of
the above-mentioned basic approach to high-technology industries
by Japan and the United States (refer to Appendix 1).
(3) In addition, the MOSS Talks on the Electronic Sector began
in February, 1985.
III. The Japanese electronics and semiconductor industries
(1) The scale of the Japan-America-Europe electronics industry
is estimated at $255 billion for 1983, a 13.4 percent rise over
the previous year.
1983 composition: USA 56 percent
Europe 23 percent
Japan 21 percent
(Refer to Appendix 3.)
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Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
(2) Recent trends in the Japanese electronics industry
The 1984 production figures were ¥16.431 trillion, a 28.7
percent increase over 1983. Industrial electrical equipment
reached ¥5.9912 trillion, a 30.2 percent increase based on
growth in computers; electronic components rose some 23.0
percent, and active components including ICs grew 51.4 percent
to ¥3,0483 trillion (refer to Appendix 3).
(3) Future estimates for the electronics industry (refer to
Appendix 4)
Industry specialists estimate yearly growth rates over the
medium term at 12.4 percent for the Japanese industrial
electronic equipment industry and 15.4 percent for the consumer
electronics industry.
(4) Trends in the IC industry (refer to Appendix 5)
The 1984 Japanese IC market was ¥1.4193 trillion, a
63 percent growth over the previous year. A 20 percent yearly
growth rate is predicted for the medium term (refer to
Appendix 4).
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Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
IV. IC characteristics, importance, and demand fields in Japan
(1) Today's IC industry
The IC industry is the vital power behind the electronics
industry's development, and has been called the 'rice of industry'
or 'the crude oil of industry', signifying its critical importance.
The IC industry requires a concentration of high-technology
expertise, where various technologies such as electronics, physics,
chemistry, mechanical engineering, and mathematics are integrated
in pattern design.
(2) The original IC was developed for use in computers, but
new uses are being discovered daily. The range of current
applications, including televisions, radios, clocks, calculators,
audio equipment, cooking appliances and refrigerators, air
conditioners, cameras, automobiles, and countless others, was
not even considered some years ago. A number of different
applications, such as logic ICs, memory ICs, amplifiers, and
micro-computer ICs, include entire systems (refer to Appendix 6).
(3) The recent growth in industrial applications has led to
further increases in IC production in Japan. The percentage of
ICs used in industry rose from 51 percent in 1980 tovPH percent
in 1984. In principle, this trend is expected to continue in
the future (refer to Appendix 7).
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Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /•1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
V. Activities of American semiconductor firms in Japan
(1) The Japanese market for electronics, including semi
conductors, is open, as is the American market. Both nations
eliminated a 4.2 percent tariff on semiconductors in March 1985
(refer to Appendix 9).
(2) In the semiconductor field, cooperative research and
technical exchanges between the two nations is common (refer to
Appendix 8).
A. American firms such as IBM, Motorola, and TI are competing
successfully in the growing Japanese market (refer to
Appendices 5, 9).
Japan market growth US firms' sales growth
1983 +28% +100%
1984 +63% +40 - 100%
(Refer to Appendix 5.)
B. Japanese firms have entered the American market, primarily
in the 1978-1983 period (refer to Appendix 8).
C. As technological levels rise in Japan, technology flows
between the two nations are also increasing (refer to
Appendix 8).
- 5 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
VI. The role of government in high technology
(1) The role of government in high-technology fields is to
improve the climate for private investment and research activity,
as mentioned by the US-Japan Work Group on High-Technology
Industries. The Japanese government is actively following this
policy (refer to Appendix 2).
(2) In Other words, the government is striving to preserve
freedom in trade, investment, and technological exchange, and
to ensure that foreign capital firms operating in Japan are
treated the same way as Japanese firms. The importance of the
research/investment environment in the United States is realized
as well. In Japan this is viewed as a mechanism supportive of
the market, and policies are being applied to assist private
activity.
VII. Conclusion
Now and in the future, Japan and the United States need to
work to further deepen mutual understanding through the use of
such organizations as the US-Japan Work Group on High-Technology
Industries, to preserve and improve the current attitude of
cooperation and smooth interaction, to eliminate protectionism,
and to Strive to ensure the mutual existence and success of
both semiconductor industries.
- 6 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
(Appendix 1)
US-Japan discussions concerning semiconductors
May 1982
July 1982
October 1982
February 1983
April 1983
October 1983
November 1983
In recognition of the importance of high
technology, the US-Japan Work Group on High-
Technology Industries was formed.
The first meeting of the Work Group was held.
The first Recommendation was drafted.
The first Recommendation was submitted to
both governments, and both agreed to act on
its advice.
The Semiconductors Subcommittee was formed,
and analysis of semiconductors was started.
The draft of the Recommendations of the US-
Japan Work Group on High-Technology Industries
on Semiconductors was written.
The Recommendation was submitted to both
governments, and both agreed to act on the
Recommendation, aiding the industry.
- 7 -
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(Reference)
(1) Tariff
Elimination of semiconductor tariff in March 1985.
(2) Data collection
Accumulation and analysis of shipments by both nations
since July 1983.
(3) Trade promotion
Aid to semiconductor industries, the overall economic plan
of the Japanese government, the NTT Semiconductor Reliability
Testing Certificate System (initiated March 1984 - See TI
certification reports, e t c ) .
(4) Investment
Provision of information to foreign capital firms concerning
establishment of businesses, promotion of investment in
Japan (initiated 1984), other.
(5) Technology
Semiconductor chip protection law, established in October •
1984 in the U.S., and approved by the Cabinet of Japan on
March 19, 1985.
(6) Access to industrial groups
The addition of foreign capital firms to the Electronic
Industries Association of Japan (Texas Instruments Japan,
Ltd. in September 1983, and Nippon Motorola Ltd. in
November 1983), other.
- 8 -
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February 1985 Initiation of MOSS (Market Oriented Sector
Selective) Talks on the Electronics Sector
March 18, 1985 The second MOSS Talks on the Electronics
Sector
- 9 -
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(Appendix 2)
RECOMMENDATIONS OF THE U . S . - J a p a n WORK GROUP
ON HIGH TECHNOLOGY INDUSTRIES
SEMICONDUCTORS
PREAMBLE fZ^i^ifv^y
The U.S.-Japan Work Group on High Technology Industries has
discussed the current status and the future prospects of
development of the semiconductor industries in both countries and
believes that:
- it is essential for the health of the world semiconductor
market that free and open markets exist in both
countries.
it is important that both governments, without having
resort to restrictive measures, maintain and facilitate
mutually beneficial trade, investment and technology
transfer between the two countries in the semiconductor
sector.
In view of tihis, the U.S.-Japan Work Group on High Technology
Industries makes the following recommendations to the appropriate
authorities and semiconductor industries of both countries.
TRADE
(Tariff)
Both governments should take steps towards the mutual elimination
of their tariff on semiconductors.
Note: The tariff elimination will naturally be realized after
necessary internal procedures are completed in both
countries.
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eA^^^
(Data Collection)
The joint semiconductor data collection effort initiated in July
this year should be continued with good faith in order to prevent
unnecessary misunderstandings caused by the laclc of statistics that
tends to take place in high technology areas where the product life
cycle is short; and to promote mutual' access to each other's market
supported by a better appreciation of the market trend. The joint
data collection should be operated in a flexible .manner, as has
been discussed, responding to the progress in technology.
(Promotion of Trade)
3. Both governments and semiconductor industries of both countries
should take the following actions with the expectation that the
trade between the United States and Japan would expand under the
free trade principle.
(1) For the purpose of increasing U.S. participation in the
Japanese market, the Government of Japan should encourage
Japanese semiconductor users to enlarge opportunities for
U.S.-based suppliers so that long-term relationships could
evolve with Japanese companies.
(2) The Government of Japan should take care to apply the
Comprehensive Economic Measures, announced on October 21,
1983, to the promotion of Imports of semiconductors produced
by U.S.-based manufacturers as well.
(3) The U.S. Government should encourage the U.S. semiconductor
Industry to: (a) strengthen its sales and marketing efforts,
(b) hold sales promotion seminars and exhibitions, (c)
increase its understanding of the Japanese market by opening
an office in Japan, and (d) consider utilizing the applicable
provisions of the U.S. Export Trading Company Act where
appropriate.
Both governments should extend their good offices to such
endeavors by providing information and other appropriate
assistance, as necessary.
- 11 -
0 . , „„ .s , ,„o=,„„,.,«. . s * , i , . „ o, A.C. . ! . , „ „ Co™p.„, , , « „ « „ „ p „ , „ . , , 3,„ , „ „ , ^^ ^,,^, / (408) 971-9000/Telex 171973
(4) The U.S. Government should continue to enforce its laws which
assure competitive and nondiscriminatory opportunities in the
U.S. market for Japam-based semiconductor firms.
(5) Both governments should reaffirm the importance of the role of
governments in the semiconductor market in vigorously
safeguarding the rules of the marketplace and preventing
anti-competitive or predatory practices.
(6) Both governments should encourage their semiconductor
producers to make active use of NTT's system for testing and
certification of conformance with its reli2Lbility guidelines.
In support of this objective, the Government of Japan should
encourage NTT to hold meetings in Japan and the U.S. to
explain the certification process.
II. INVESTMENT
(Removal of barriers to investunent)
1. Recognizing the importance of the free flow of investment where
hindracnes or inhibiting factors for investment flow exist, both
governments should make best efforts to mitigate or remove them.
2. Each government should encourage the inward flow of investment by
the semiconductor industry of the other country.
(Investment promotion measures for foreign capitalized domestic
companies)
3. Both governments should facilitate participation of foreign
^ capitalized domestic companies in regional investment promotion
rJ^W^_^ schemes such as Technopolis Development Scheme of the Government of
Japan, with a view to encouraging investment by foreign capitalized
domestic companies. Both governments should continue to take
measuras.,juch as provisions of information for this purpose.
- 12 -
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III. TECHNOLOGY
(Promotion of technology exchange)
1. Both governments should encourage mutually beneficial exchanges of
technology on a commercial basis.
2. The Reliability Center for Electronic Components of Japan and am
appropriate organization in the United States such as the
Semiconductor Industry Association's Committee on Quality should be
encouraged to proceed with information exchange and other
cooperative undertakings in order to promote technical exchange in
the fields of semiconductor reliability and testing methods.
3. Both governments should recognize that some form of protection to
semiconductor producers for their intellectual property is
desirable to provide the necessary incentives for them to develop
new semiconductor products. And both governments should take their
own appropriate steps to discourage the unfair copying of
semiconductor products and the manufacturing and distribution of
the unfairly copied semiconductor products.
4. Each government should strive to provide inventors with sufficient
patent protection taking note of the different situation in
examination procedure between the two countries.
Both governments should further strengthen the cooperative
relationship between their patent agencies and strive to minimize
the time required for the processing of patent applications.
IV. OTHER
(Access to trade associations)
1. Both governments should encourage that all firms in the
semiconductor industry (whether such firms are directly or
indirectly owned or controlled by nationals or firms of any
country) have equal access .to relevant trade associations.
- 13 -
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(Implementation)
2. The relevant authorities and semiconductor industries of both
countries should begin implementation of these recommendations by
November 1983.
(Miscellaneous)
3. Both governments should consider, as appropriate, issues relating
to semiconductor trade, investment and technology in the
semiconductor sector in the U.S.-Japan Vock Group on High
Technology Industries. The Work Group should review implementation
of the measures described above and their effects at least twice a
year, with the first review to occur during the first quarter of
1984.
These recommendations are submitted in accordance with the terms
of reference of the U.S.-Japan Work Group on High Technology
Industries and are subject to the terms of its Recommendations of
February 1983.
- 14 -
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^
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A^ (Appendix 3)
The International Position of Japan's Electronics Industry (1982-1983) Unit: million dollars
Year
Consumer Electronics
Industrial Electronics
Parts
Total
United States
1982
11,827
88,830
26,807
127,464
1983
14,170
98,735
30,926
143,831
Europe
1982
13,551
30,152
9,718
53,421
1983
13,729
33,683
10,370
57,782
Japan
1982
14,187
15,835
14,055
44,077
1983
16,147
19.383
17,875
53,405
(Note) For 1982 $1 =¥248.3
For 1983 $1 =¥237.52
Source: Collected by EIAJ based on data from Electronics magazine, EIA statistics, and others.
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Production Forecast of Japanese Electronic Equipment & Components (in hundred million yen)
Product/Year
Consumer Electronics
Video Equipment VCRs
CTVs Other
Audio Equipment
Industrial Electronics
Communication & Radio Application Equipment
Electronic Application Equipment (Including computer)
Electric Measuring Instrumentation
Electronic Business Machine
1983
38,338
1984 (Estimate)
45.525
1985 (Estimate)
47.746
84/83
(%)
118.8
95/84 (%)
104.9
23,351 15,140
6,846 1,366
14,985
46,018
14,758
29,310 19,670 7,475 2,615
16,215
59,912
17,737
31,046 20,130
7,880
3,036 16,700
68,937
19,836
125.5 129.9
109.2 158.5
108.2
130.2
120.2
105.9 102.3 105.4
140.2 103.0
1150
111.8
23,911 33,570 39,377 140.4 117.3
4,249 4,823 5,338 113.5 110.7
3,099 3,782 4,386 122.1 116.0
Sub Total 84,354 105,437 116,683 125.0 110.6
Electronics Components Passive & Mechanical Active
Electronic Tubes Discrete IC
Others
22,725
20,130
4,528 4,207
11,395 435
27,952
30,483 5,774
6,067
18,642 438
123.0 151.4 127.5 144.2 163.6 100.6
Total 127,645 164,310 128.7
Source: Electronic Industries Association of Japan
- 16 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
n O)
(Appendix 4) 1) Demand Projections for Electronics Products for Industrial Use in Japan and the United States
(Japan)
JPN
- - . . . F.Y. .
V bill ion
(Percent Change)
$ Mil l ion
(Percent Change)
1982
4,030
16,185
1983
4,903 (21.7)
20,601
(27.3)
(Forecast) 1984
6,232
(27.1)
26,185
127.1)
(Forecait)
1987
8,931
37,525
(Forecast)
1988
9,946
41,790
1987/1984
(Annual average 12.7)
(Annual average
127)
1988/1984
(Anrmal awerai
12,4)
(Annual averai
12.4)
Source: E IAJ (Oct . , 1984)
Note: Industrial Electronics
Communica t ion & Radio Appl ica t ion Equipment
Electronic Applica t ion Equ ipment (Including Computer)
Electric Meamting Instrumen ta t ion
Electronic Business IVIachine
(U.S.A.)
^^~^~-^ ^^ c .y .
U.S.A. $ rviillion
(Percent Change)
1982
106.929
1983
124,558
(16.5)
(Forecast)
1984
147,617
(18.5)
(Forecast)
1987
210,926
1987/1984
(Annual average
12.61
I
r
Source: E lec tronic (1984)
N o t e : Electronics equ ipmen t for industrial uses
• Data Processing System & Peripherals, Business Machine Systems
• Communica t ion Equipmen t & Systems
• Industrial Electronics
• Test & Measuring Equipment
• Analy t ical Equipment
• Medical Electronic Equ ipmen t
• Government Electronics
8
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2) Demand Projections for Consumer Electronics in Japan and the United States
(Japan)
$ Mill ion
(Percent Change)
1983
N.A.
1984
N.A
1985
14.689
1987
N.A
1990
30,099
1990/1985
(Annual
average 15.4)
Source: JEMA (Mar., 1984)
Note: Based on 20 main products (which make up about 80-85%
of the total).
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< o (D in O
—i c n O)
(U.S.A)
$ Mi l lion (Percent Change)
1983
20.084
1984
21,277 (5.9)
1985
N.A
1987
23,832
Source: Electronics (1984)
1987/1984
(Annual average 3.9)
n Q.
0) •o •g (T o oi Csl
(World)
$ Mi l lion
(Percent Change)
1985
60,48G
1990
126,506
1990/1985
(Annual
average 15.91
Source: JEMA (Mar., 1984)
Note: Based on 20 main products (which make up 85% - 90%
of the total).
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3) Projections on IC Shipments for Japan and the United States
Year
United States
Japan
Western Europe
Others
Total
1983
6,318
(126.3)
3,984
(145.5)
2,263
(115.8)
771
(154.5)
13,335
(130.8)
1984
9,847
(155.9)
6,204
(155.7)
3,492
(154.3)
1,215
(157.6)
20,757
(155.7)
1987
16,092
11,374
6.129
2,381
35,976
Annual average
growth 1987/1984
17.8
22.4
20.6
25.1
20.1
Note: EIAJ also announced In March 1983
of IC production between 1982 and
Source: WSTS (Sept. 1984)
(Based an announcements of SIA In
September 1984. Taken from the
report] of Japan Machinery Export
Association and JETRO.)
thai the average annual growth rate
19B6 wil l be 20.5% wor ld wide.
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(Appendix 5)
The IC Market in Japan and the Activit ies of U.S. Corporations Based in Japan
1) Trends in the IC Market in Japan
Year
I Item
Market size (YIOO mill ion)
1983
8,683
( + 28)
1984
14,193
(+63) Increase over prev. yr. (%)
Source: The machinery statistics of the Ministry
of International Trade and Industry and
the customs statistics of the Ministry of
Finance.
Note: Market size = Production — Exports + Imports
2) The Activit ies of American Corporations (major examples)
Company name ~^-~^
National Semiconductor
Japan
Advanced Micro Devices K.K.
! 1983 sales/incr. 7^984 (est.) sales/incr. ~|
over prev. yr. over prev. yr. Remarks
V7 bill ion
( + 100)
y iO .5 bil l ion
(+50)
Nikkei Sangyo Shimbun 8/23/1984
(Talks by President, W.G. Watson dated
22, 1984)
( + 100)
Dempa Shinbun 8/25/1984
( + 100) I (Talks by President Sanders
i dd. 8/23/84)
Analog Devices of Japan Inc. VB.3 bil l ion
(N.A)
Texas Instruments Japan Limited
Intel Japan K.K.
Harris K.K.
Nippon Motorola L td .
Nissec Limited's Fairchild Semiconductor
V68 8 bill ion (N.A)
V8.5 bil l ion
(+60)
V110.5 bil l ion
(+60)
( + 100) (+50)
Nikkei Sangyo Shimbun dd. 8/10/1984
Nikkan Kogyo Shimbun dd. 3/4/1985
V7 bill ion
( + 100)
¥20.0 bil l ion (N.A)
V7 bil l ion
(N.A)
V10.5 bill ion (+50)
¥30.0 bil l ion
(+50)
V10.0 bil l ion
(+43)
Nikkei Sangyo Shimbun dd. 6/8/1984
(Talks by President Grove dd 6/7/84)
Dempa Shimbun dd. 6/14/1984
Dempa Shimbun dd. 4/12/1984;
Nikkei Sangyo Shimbun dd. 4/7/1984
(Talks by President Irie dd. 4/12/1984)
Nikkei Sangyo Shimbun dd. 8/24/1984
- 20 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
3) Recent Trends Related to Production, Exports, and Imports of IC industry in Japan
Unit: hundred million yen!
( ) % change over prev. yr. Vfs-a-vts the world
Vis-a-vIs the U.S.
Export
Import
1981 1982 1983
1996 i 2351 j 4238 (108.9) 1 (142.8) j (148.7)
1143
(105.01
1274 i 1526 (111.5) j (119.8)
712 1168 1843 ^ ^ ° " ( 98.4) (104.0) (157.9)
Import
Production
Market size 1
Reliance on imports from the U.S. (%)
705 j 835 (101.3) j (118.5)
6888 1 8352 (120.8) 1 (121.3)
6035 (121.7)
11.7
6775 (112.3)
12.3
1984
7768 (183.3)
2222 (145.6)
3722 (201.9)
1076 1 1636 (128.9) i (152.1)
11395 1 19739
(136.5) i (173.2)
8683
(123.2)
12.4
14193 (163.4)
11.5
Source: The machinery statistics of the Ministry of International Trade and Industry and the customs statistics of the Ministry of Finance.
Note: 1) Market size = Production amount + Import amount — Export amount 2) The degree of reliance on imports from the U.S. (the share of imports
f rom the U.S.) = the amounts imported from the U.S./the market size 3) Since the shipments of U.S.-owned companies in Japan are not
included in the figures in 2), the share of U.S.-related products is higher (perhaps by several percentage points).
- 2 1 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
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ataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
(Appendix 7) Changes m the Relative Weight of Different Fields in the Demand for IC's in Japan
1980 C .Y.
' 1 9 8 2
1984
\
V. \
T V / V T R
15%
A u d o equipment
17%
\ F o r consumer e lectronic
\ (49%)
\
T V / V C R
2 2 %
T V / V C R
17^
; /
Audio equipment
8%
Other
consumer e lectronics
17%
\
\
Audio
equ ipment
14%
X Other
consumer electronics
15%
/ / ^ A For industrial e leclror ic i .--' / \
(49%i y ' / ^
Other consumer goods _J^
?f-
Computer
15%
Compu tet
16%
Computer
13%
X
Te lecommunications/ measuring instruments
12%
Te lecommuni cations/ measuring instruments
1 1 %
O A machinery and
equ ipment
16%
For industrial e lectronics
Te lecommuni^ cat ion/ measuring instrument
10%
/ ( 51%)
O A machinery and
equ ipment
19%
Other
industria l
electronics
8%
/ f
- - /
1 Other
mduslrlal electronics
7%
x^ y \ / X y" For Consumer Electronics \ / i (51%) X 1
\
Other equipment for
industria l use
O A machinery and equ ipment J^—-—^
•^^ - 7 ? ^ ~ ^ j 3 Ic
For consunter use
(3eO 33?^
J J
J V For Industria l use
6 0 70 BO 90
1 0 20 : M 4 0
387
V bi l l ion
550
n fN)
1197
100
5 0 Source: For 1980 and 1982, f rom E lectronic Industries Association
of Japan . and for 1984, f rom the E lectronic Machinery
Section of the Ministry of Internationa l Trade and
Industry .
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(Appendix 8)
Examples of Mutua l Exchange and Cooperation Between Japanese and American Companies in the Field of IC's
o o o O)
• Expansion by Major U.S. Companies into Japan
(in the field of manufacture and sale of semiconductors)
IVlostec Japan L td .
Analog Devices L td .
Nihon IVIotorola, L td .
Nihon IBIVI, L td .
Asah l Micro Systems L td .
N ihon LSI Logic L td .
Harris L td .
Company name
Texas Instruments Japan Limited
A.IVI.I. Japan, Ltd.
Nissec Limited
Advanced Micro Devices K.K.
Nihon Signetics Japan Ltd.
Intel Japan Ltd.
Zilog Japan K.K.
Parent company
T.I .
A.M. I .
Falrchild
A.M.D.
Signetics
Intel
Zilog
Date established
1968.4
1971.10
1972.10
1974.12
1975.9
1981.4 (1976)
1977.10
Line of business
Manufacture and sale; production plants (Oita, Saitama, Ibaragi)
Sale
Manufacture and sale; production plant in Nagasaki
Sale
Sale
Sale; design center in Ibaragi
Sale
Moitec 1979 .10 Sale
Ana l og Devices 1969 .12 Manufacture and sale; product ion plant in Kanagawa
Mo torola 1982.10 Manu facture and sale; product ion plant i n Fukush ima
I .B .M . 1937.6 Manufacture ; product ion p lan t in Shiga
A M I 1983.6 Manu facture and sale; des ign center in T o k y o
LSI Log ic 1984 .3 Manufacture and sale; a product i on plant being planned
Harr is 1984 .6 Sale
Nat iona l Sem iconductor Japan L td . NS 1980.1 Manufacture and sale; a product ion plant in the plann ing stage; design center in Tokyo
CO
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• Expansion by Major Japanese Companies into the United States
Company name
Exar Integrated Systems
Hitachi Semiconductor America
NEC Electronics Inc.
Fujitsu Microelectronics Inc.
Toshiba Semiconductor USA
Mitsubishi Semiconductor America
NEC Electronics Inc.
Parent company
Rohm
Hitachi Ltd.
NEC
Fujitsu
Toshiba Corp.
Mitsubishi Electric
NEC
Date established
1974,4
1978.5
1978.12
1979.8
1980.4
1983.8
1983
Location
Sunnyvale, Calif.
Dallas and Irving, Texas
Sunnyvale, Calif.
San Diego, Calif
Sunnyvale, Calif.
Durham, North Carolina
Rosehitl, Calif.
Fujitsu Microelectronics Fujitsu 1984.9 Port land. Oregon in tN
S (U
t-o o o O)
00 o • *
< o
c nl W
ra Q.
•a -o ir o o oj
• Major Examples of Technological Cooperation Between Japan and the United States
Hitachi LttS. -• Hewlett Packard: Provision of 64K D R A M technology
Toshiba Corporaiion -» Zi log: Refined processing techno logy related to 64K O R A M
Zilog -• Toshiba Corporation; Micropfoceiior technology
NEC " A M I , Zilog: Microprocessor techno logy
Oki Denki and Fujitsu *- Intel: Microprocessor techno logy
Fujitsu ^ M M I , Tej<a» Instruments: Gate array techno logy
NMB '- I N M O S : 256K D R A M techno logy
In addition, there have been cross-licensing arrangements between Japanese companies, on the hand, and U.S. companies such as Texas Instruments, Motorola , Fairchitd and so fo r th.
ra a E o o c <D
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(Appendix 9)
Representative testimony by American semiconductor firm officers
1. Roy P. Shields, President, National Semiconductor Japan
(December 20, 1983 Nikkei Sangyo interview)
- To NS, which is trying to market semiconductors world
wide, it is not only reasonable, but necessary for us to
make a strong showing in Japan.
- Industrial competition in Japan is intense, not only among
foreign capital firms that have entered the market, but
also among Japanese manufacturers. All these corporations
must meet the challenge and provide the products users
demand.
- The governments are working towards a solution of the trade
friction in semiconductors, and I am optimistic.
- To succeed in the market, the view must be to the future
regardless of the ups and downs of the market, and operations
and investment must continue. Our aim is to build up a
market for semiconductors in Japan, and I am confident we
will.
- 26 -
Jtaquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
2. M. D. Bohn, Vice-President, LSI Logic (April 5, 1984 Nikkei
Sangyo interview)
- Japan is the second biggest semiconductor market in the
world. Japan is critical to LSI Logic as a central point
in the network.
- Thanks to the cooperation of the stock and bond houses,
the capitalization went well. The Japanese organization
eventually aims to be run by a Japanese management and
Japanese workers. We plan to build a factory as soon as
possible, and we are already considering the purchase of
land.
3. Toshiaki Irie, President, Nippon Motorola (April 12, 1984
Dempa Shimbun interview)
- It is 20 years since Motorola began supplying devices to
the Japanese market. Nippon Motorola is the successor.
- We want to hold the top position among foreign capital
semiconductor makers in Japan within a few years. We will
be actively improving our production system soon.
- When a foreign-capital maker has an unstable supply line,
he receives many complaints from domestic users. A system
that provides full support and confidence to the representa
tives is needed. We are building up that support system
now, and will continue to work to build a firm base.
- 27 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
4. A. S. Glove, President, Intel (June 7, 1984 Nikkei Sangyo
interview)
- We will continue to increase shipments to the second biggest
semiconductor market in the world, Japan, and we want our
sales there for 1990 to reach $1 billion.
- Japanese users are increasing purchases of American products,
including Intel's, during the present supply crunch, which
is having a good effect on both nations. Even if the
present situation changes, I don't think purchasing patterns
will return to their old ways.
- Intel will meet the demands of Japanese users for stable
supply.
5. J. Sanders, Chairman, AMD (August 25, 1984 Dempa Shimbun
interview)
- We aim to be the top foreign capital firm in Japan in five
years.
- The fact that AMD has been in Japan for ten years shows
how well we realize its importance.
- AMD high-quality products will be recognized in Japan,
too. Our shipment figures already show a significant rise.
- 2 8 -
Jtaquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
6. William G. Watson, President, National Semiconductor Japan
(August 23, 1984 Nikkei Sangyo, Dempa Shimbun interviews)
- I do not think the Japanese market is closed.
- In Japan, personal relationships and trust built up over
many years are valued, and it is a fact that it is difficult
for Westerners to force their way in, but we understand
the Japanese market character. The only point is how much
effort we put into developing the market.
- NSJ has come with this approach, and is putting a lot of
effort into Japan ... and the results are starting to show.
- There are many semiconductor makers in Japan from overseas,
and TI is probably the most advanced. This is because
they recognized what the future was going to bring and
found Japanese employees at an early date. NS is using
this as an example in the development of NSJ.
##«
- 29 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
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- 1 -Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
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- 2 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
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- 3 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Parl< Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
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- 4 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
(5) Technology
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5 -
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- 6
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
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Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
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- 8 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
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- 10 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Production Forecast of Japanese Electronic Equipment 8i Components (m hundred mill ion yen)
Product/Year
Consumer Electronics
Video Equipment VCRs CTVs Other
Audio Equipment
Industrial Electronics
Communications! Radio Application Equipment
Electronic Application Equipment (Including computer)
Electric Measuring Instrumentation
Electronic Business Machine
1983
38,336
1984 (Estimate)
45,525
1985 (Estimate)
47,746
23,911 33,570
84/83 (%)
118.8
95 /84 (%)
104.9
23,351 15,140 6,846 1,366
14,985
46,018
14,758
29,310 19,670 7,475 2,615
16,215
59,912
17,737
31,046 20,130 7,880
3,036 16,700
68,937
19,836
125.5 129.9
109.2 158.5
108.2
130.2
120.2
105.9 102.3 1054
140.2 1030
115.0
111.8
39,377 140.4 117.3
4,249 4,823 5,338 113.5 110.7
3,099 3,782 4,386 122.1 116.0
Sub Total 84,354 105,437 116,683 125.0 110.6
Electronics Components Passive & Mechanical Active
Electronic Tubes Discrete
IC Others
22,725
20,130
4,528
4,207
11,395
435
27,952
30,483
5,774
6,067
18,642
438
123.0 1 5 L 4 127.5 144.2 163.6 100.6
Total 127,645 164,310 128.7
Source: Electronic Industries Association of Japan
- 11 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
(«^44)
1) Demand Projections for Electronics Products for Industrial Use in Japan and the United States
(Japan)
F.Y.
^ ^ H -1982 1983
(Forecast) (Forecast) 1984 1987
(Forecast) 19S8 1987/1984 1988/1984
JPN
V billion (Percent Change)
j S Million I (Percent Change)
4,030 4,903 (21.7)
6,232 (27.1)
8,931 9,946 (Annual average 12.7)
(Annual average 12.4)
16,185 20,601
(27.3)
26,185
(27 .1) 37,525 41,790 (Annual average
12.7) (Annual average
12.4)
Source: EIAJ (Oct., 1984) Note: Industrial Electronics
Communication & Radio Application Equipment Electronic Application Equipment (Including Computer) Electric Measuring Instrumentation Electronic Business Machine
(U.S.A.
' ^~~~~^--__C^Y.
1 U.S.A. S Million
(Percent Change)
1
1 1982
j 106,929
1
1
1983
124,558 1 (16.5)
(Forecast) ' (Forecast) 1984 1987
147,617 210,926 (18.5)
1 1987/1984
(Annual average I 1 12.6)
Source: Electronic (1984) Note: Electronics equipment for industrial uses
• Data Processing System & Peripherals, Business Machine Systems
• Communication Equipment & Systems • Industrial Electronics . Test & Measuring Equipment
• Analytical Equipment • Medical Electronic Equipment • Government Electronics
- 12 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
2) Demand Projections for Consumer Electronics in Japan and the United States
(Japan)
$ Million (Percent Change)
1983 1984 1 1985 j 1987
N.A. [ N.A i 14,689 • N.A 1 ' : I . 1
1990
30,099
1990/1985
(Annual average 15.4)
Source: JEMA (Mar., 1984) Note: Based on 20 main products (which make up about 80-85%
of the total).
(U.S.A)
$ Million (Percent Change)
1983
20,084
1984 1985
21,277 I N.A (5.9)
1987
23,832
1987/1984
(Annual average 3.9)
Source: Electronics (1984)
(World)
$ Million (Percent Change)
] 1985
' 1 60,486
1 t
1990
126,506
1990/1985
(Annual average 15.9)
1 i
i
Source: JEMA (Mar., 1984) Note: Based on 20 main products (which make up 85% — 90%
of the total).
- 13 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
3 . B • ^ c 7 5 l C Shipments (75 T SH
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1 8 8 3
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( 1 2 8 . 3 )
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- 14 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
1 . sit2>iHicm«(7)ijrS] (gf^5)
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- 15 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
3 . mmimmW£(D±ii. ^ihAW}^ ^ & : ^ R C ) m
« ii ^
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1.143
(105.0)
712
(98.4)
705
(101.3)
6,888
(120.8)
6.035
(121.7)
11.7
1982^
2.851
(142.8)
• 1.274
(111.5)
1.168
(184.0)
835
(118.5)
' 8.352
(121.3)
6.775
(112.3)
12.3
1983^
4.238
(148.7)
1.526
(119.8)
1.843
(157.9)
1,076
(128.8)
11,395
(136.5)
8,683
(128.2)
12.4
1984^
7.768
(183.3)
2,222
(145.6)
3,722
(201.9)
1,636
(152.1)
19,739
(173.2)
14.193
(163.4)
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- 16 -
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- 17 -
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- 2 1 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
(sr4 9)
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- 22 -(taquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
4. A. S. -^U-zf^M: Intel ( 1 9 8 4 ^ 6 ^ 7 0 BUmMMim)
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23 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
I - -- - , S««
1 >r^::^ ' i"" :)a Dataquest
Dataquest
MOS MEMORY, THE PROPULSION POWER OF IHE IC INDUSTRY
Sutezo Hata Executive Managing Director and Group Executive
Electronic Devices Group Hitachi, Ltd.
Mr. Hata is Executive Managing Director and Group Executive of the Electronic Devices Group at Hitachi, Ltd. He is in charge of electron tube products and semiconductor devices. Previous positions at Hitachi have included General Manager of the Mobara Works, General Manager of the Electron Tube Division, and General Manager of the Semiconductor and IC Division. Mr, Hata received a Bachelor of Engineering degree in the Electrical Course from the Faculty of Engineering at Kyoto University, Japan.
Dataquest Incorporated JAPANESE SEMICONDUCTOR INDUSTRY CONFERENCE
April 14-16, 1985 Hakone, Japan
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
In the past, MOS memory has been the main driving force
behind the development of the semiconductor industry, and its
importance as the prime propulsion power in the field will
undoubtedly be even greater in the future. MOS memory is the
core of the semiconductor industry and holds the key to future
development for the following reasons:
- Of the total of ICs and semiconductors produced, the
portion which rely on MOS memory is quite large.
- The growth rate is high for MOS memory, compared to other
devices.
- MOS memory advances tend to lead other technological
improvements in the IC manufacturing industry.
1. W-W Semiconductor Shipments and MOS Memory
I would like to discuss world semiconductor shipment trends
in the past 10 years. The world semiconductor market in 1975
was about $4 billion, but it grew to nearly $14 billion by 1980,
and is expected to reach some $28 billion this year. Compound
annual growth rates for the semiconductor industry over these
10 years have averaged 20 percent, of which ICs overall were 27
percent. MOS memory showed a 37 percent growth, revealing the
manner in which the MOS memory device has continued to lead
semiconductor development.
- 1 -
Dat'aquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Next, let us compare MOS memory's share of the world
semiconductor market this year, 5 years ago, and 10 years ago.
In 1975, almost half of the market was for discrete devices.
MOS ICs held some 19 percent, of which only 7 percent was MOS
memory. By 1980, the IC share had grown to about two-thirds of
the total market, and MOS memory had risen to 17 percent. In
today's market, ICs account for 80 percent, MOS ICs for 47
percent, and MOS memory now accounts for about a quarter of the
overall market. It is clear from these figures that MOS memory
is a device with great potential for the semiconductor industry,
critical not only because of its growth rates, but also for its
high ratio of total market sales.
Another illustration of the growth of the MOS memory
industry is the number of manufacturers that have entered the
field. Ten years ago, 33 firms were producing MOS memory; by
1980, the number had risen to 41; and this year the number of
manufacturers is expected to reach 64.
2. Worldwide MOS Memory Shipments
Let US turn now to world MOS memory sales volumes on a
product type basis. The 1985 sales volume is estimated at about
$7 billion, of which about half is dynamic RAM (DRAM) devices,
followed by static RAM (SRAM) 18 percent, EPROM 19 percent, and
mask ROM at 13 percent. The compound annual growth rate of
- 2 -
Dataquesf Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
DRAM in the last 5 years is 28 percent, significantly higher
than the total MOS memory device figure of 23 percent.
Examining consumption geographically, the 1980 distribu
tion showed 63 percent for the American market, followed by
Europe at 22 percent, Japan at 13 percent, and other areas at 3
percent. In 1984, U.S. consumption shrank to 48 percent, and
Europe to 16 percent, while Japan rose to 31 percent and other
areas to 5 percent. The demand growth of the Japanese market
stands out, and this is due to the high growth of the Japanese
electronics industry, especially the significant growth of
office automation equipment such as personal computers and
wordprocessors.
The bit sizes of manufactured DRAMs over the last 5 years
have also changed, first from 16K to. 64K, and now a shift from
64K to 256K is occurring in the market. The introduction of
the next VLSI, the IM DRAM, is expected at any time. Examining
this change in bit size from the viewpoints of sales amount and
total bit demand, it can be seen that the cross-over from the
16K to the 64K chip occurred in 1982 on a sales level, with 64K
chips reaching their highest peak in 1984. 256K DRAM chips
made their first real appearance on the market in 1982, and
showed a high growth rate, but it appears that they will not
overtake 256K chip sales until next year or later. Total bit
demand shows a roughly geometrical growth for total DRAM bit
- 3 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
demand, with demand levels for 16K intersecting 64K demand in
1982. It is expected that 256K DRAM bit demand will almost
reach 64K DRAM levels significantly this year.
In 1980, the primary areas of MOS memory application were
in the computer field, consisting of mainframes and minicomputers,
The primary field today, however, is OA equipment, which has
become the number one market with the massive demand for personal
computers and related equipment.
3. Expansion of MOS Memory Demand
AS illustrated above, the MOS memory marketplace has been
expanding. Some of the major reasons for this are:
- MOS memory uses leading edge process technology, and the
rate of technological advance is high, leading to high
cost-performance values for equipment, and therefore demand
increases.
- MOS memory has come to be used extensively in computer and
personal computer production because of expansion of the
high integration levels and low cost.
- With the advent of microcomputers, MOS memory has also
come to be used in a wide variety of small systems designed
for use with microcomputers.
The range of applications has been expanding for at least
four reasons: (1) the adoption of electronics in electrical and
- 4 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
mechanical products, (2) the creation of new products through
electronic technology advances, (3) the development and
diversification of computers, and (4) the digitization in
telecoms. In the future, the development of networking and
systemization made possible through the linking of computers,
DA, and telecommunications will further widen applications.
The characteristics of the single most critical applica
tion field, personal computers, are listed below, and these
same factors will undoubtedly lead to continuing growth in
demand for MOS memory in the personal computer market.
- Personal computers are the driving engine behind OA market
development.
- The RAM size per unit will continue to increase because:
(1) As data levels continue to rise in society, the
potential to process increasing amounts of data is
necessary, and (2) The amount of software requiring
unified, relatively complex, and high-performance mass
memory is increasing.
Taking the IBM PC as an example of the development process
for personal computers, it is obvious that RAM size increases
are dependent on MOS memory development. For instance, business
personal computers sold from 1985 on are expected to have a
standard basic configuration of 512K bytes composed of 256K
DRAMS.
- 5 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
4. Technological Evolution of the MOS Memory
Turning next to the ever-continuing technological advances
being made in MOS memory, the major technologies involved in
MOS memory production are mass production technology, which is
supported by fine pattern process technology, and functional
diversity, which is required to meet the widening market
demand. C-MOS products for lower power consumption and the
diversification of packaging such as small packages will have
to be mentioned here. Let me describe these technologies in
somewhat more detail.
Advances in fine-pattern process technology and the
introduction of related technologies have vastly increased the
number of elements that can be integrated on a single chip.
Current devices are 2 ym, and new applications for 2 ym
technology and products are being actively pursued. Basic
technology development activities, centered around the Central
Research Laboratory of Hitachi Ltd., are on the verge of
perfecting practical 1.3 ym technology.
Process technology advancement has supported the fantastic
growth of MOS memory capacity at a rate at which it quadruples
every 3 years, and the same growth rate seems likely to
continue for some time to come.
Two examples of chips utilizing the most advanced
technology would be the iMbit DRAM and the 256Kbit SRAM.
6 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Trends in MOS memory technology include high density, high
speed, low power, high performance, and high density packaging.
The trend towards high performance can be easily illustrated by
DRAM devices.
In the 16Kbit age, memory organization was only XI, and
only the page mode was available functionally. In the 256Kbit
age, however, XI, X4 and X8 architectures are demanded, and the
functional variations have also grown to include the static
column mode and the nibble mode, among others. Hitachi's
response to these demands is represented by the following DRAM
products.
Product development was completed for a X4 type 64Kbit
chip, and the 256Kbit device was made available in nibble mode,
X4 type, and static column mode designs. A X8 type pseudo-
static RAM is currently under development, and it is reasonable
to expect further variations in the coming 1Mbit age.
Concurrently, we are intensively promoting the application
of C-MOS technology, which seems to be most suited to the
current marketplace requirements for miniaturization and power
conservation. Furthermore, the development of Hi-CMOS
technology at Hitachi has led to CMOS devices that are the
equal of N-MOS technology chips in terms of integration levels
and speed.
- 7 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Hi-CMOS technology was first utilized in a 4Kbit static
RAM in 1978. In 1979, a 16Kbit static RAM was commercialized
and a new world standard was established. This helped to make
Hi-CMOS technology a world standard also. Currently, work is
being done on the mass production of 64K SRAMs using Hi-CMOS
technology, as well as the development of a 256K SRAM device,
and the application of the technology to other devices is also
being actively advanced.
Hitachi realized the superiority of C-MOS from the very
Start, and has made whole-hearted efforts to incorporate this
technology into its products. The effects of C-MOS application
are being felt by products in every field today.
A glance at general trends in packaging shows surface
mounts and plastic surface mounts becoming more and more common.
Let me mention here the plastic surface mounts used at Hitachi,
which were developed in accordance with international standards
such as JEDEC. The PLCC package is suited to DRAM applications,
SOP to SRAM Chips, and FPP to mask ROM devices.
5. Potential Future Trends of MOS Memory
Finally, I would like to discuss the future of MOS memory.
The technological revolutions will no doubt continue, leading
to even greater memory volume and diversification of the types
which are manufactured. Function integration, one example of a
new trend in the field, is leading to "system on-chip."
- 8 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Fine pattern process technology will support continuing
increases in MOS memory volume, and the realization of a
practical 16Mbit DRAM chip is envisioned by the 1990's. The
SRAM will no doubt see a parallel development.
In the past, the 4 major product types were DRAM, SRAM,
EPROM, and mask ROM, but the diversification of market needs,
brought on by expanding applications and advances in design
technology, has led the major lines to swell to 8, including
EEPROM and PSRAM. This expansion of basic device types will
probably continue for some time, and will eventually lead to
the development of special memory devices such as video RAM and
built-in on-chip systems which include MPUs.
Let me take the EEPROM as an example of a new memory device.
The EEPROM is a ROM capable of handling erasure and writing
electrically. It has the additional merit of providing non
volatile data without the need for backup batteries, which are
required for SRAM devices. This critical point will no doubt
lead to high growth in the future. Advances are being made now
that will improve the performance of EEPROM chips, which we
expect to grow into a full-fledged member of the product line
shortly. This EEPROM technology will apply to many fields,
including on-chip memory for MPU (microprocessor) use.
Microprocessors are single-chip CPUs in which ROM and RAM
memory have been integrated on-chip. The non-volatile memory
- 9 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company/ 1290Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
in these single chip microcomputers will probably change from
mask ROM to EPROM, and eventually to EEPROM in the future.
EPROM on-chip microcomputers have been built through the
combination of C-MOS EPROM and C-MOS CPU devices, as shown here.
This diagram shows changes in system configuration due to
LSI advancement. The early periods saw hardware logic and small-
volume memory systems, but the introduction of microprocessors
changed the picture considerably. The further introduction of
single-chip microcomputers which include on-chip memory has
already begun to show its effect in current trends in system
development. A logical extension of this trend leads to the
future age of the one-chip system, where the entire functional
system is integrated onto a single chip.
###
- 10 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
DATAQUEST JAPANESE SEIVIICONDUCTOR INDUSTRY CONFERENCE
MOS MEMORY: THE PROPULSION POWER OF IG INDUSTRY
0 HITACHI
APRIL 1985
S. HATA
0 Hitachi, Ltd.
- 1 -
WHY MPS MEIVIORY
MASSIVE VOLUME MARKET
HIGH GROWTH MARKET
MOS MEMORY DRIVES IC TECHNOLOGY
- 1 1 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
WORLDWIDE SEMICONDUCTOR SHIPMENTS AND MOS MEMORY
W O R L D W I D E S E M I C O N D U C T O R S H I P M E N T S
3D
= 20
1Q
C. A. G. R. 80-85 75-85 TOTAL SEMICON. 15% 20%
I C 20 27 DISCRETES 4 9 MOS MEMORY 23 37
^
75 7G 77 78 79 80 81 82 83 84 85
(SOURCE)H1TACHI,LTO.
0 HITACHI 3 -
% OF MOS MEMORY IN TOTAL SEMICONDUCTOR SHIPMENTS
MOS MEMORY 7%
MOS MEMORY MOS MEMORY 17% f - ^24%
1975 I^ HITACHI
1980 - 4
1985 (SOURCE)HiTACHUTD.
- 12 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
COMPANIES INVOLVED IN MOS MEMORY -MERCHANT SUPPLIERS-
f U.S. BASED
EUROPEAN BASED
JAPAN BASED
OTHERS
TOTAL
1975
20
3
9
1
33
1980
24
5
12
0
41
1985
38
8
13
5
64 J
0 HITACHI - 5 (SOURCE) DATAQUESTJNC.
0 HITACHI
WORLDWIDE MOS MEMORY SHIPMENTS - B Y PRODUCT T Y P E -
<^ 4
C .A .6 .R . 80-85 TOTAL MOS MEMORY 2 3 %
DRAM 28 SRAM 20 EPROM 20 MASK ROM 19
O : % IN TOTAL
^ M A S K ROM
3S
EPROM
SRAM
ORAM
81 82 83 84 85
(SOURCE)HITACHI,LTD.
- 13 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
WORLDWIDE MOS MEMORY SHIPMENTS - B Y GEOGRAPHIC REGION-
1980 rR.O .W .3% 1984 rR.O.W.5%
(SOURCE)HITACHI,LTD. > HITACHI
WORLDWIDE DRAM SHIPMENTS - B Y BIT S I Z E -
US$ VALUE
s 2
lOOK
10K
IK
100
10
1
BIT DEMAND
. TOTAL DRAM 1
JS^
/L^Ki ' y 2 5 6 K
^ ] 6 K
NK
81 BZ B3 84 85 80 81 82 83 84 85
(SOURCE)HITACHI,LTD. 0 HITACHI
- 14 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
WORLDWIDE MOS MEMORY SHIPMENTS - B Y END USER SEGMENT-
CONSUMER
INDUSTRIAL & OTHER
2 1 %
0 A 23%
CONSUMER
INDUSTRIAL & OTHER
19%
0 A 34%
TELECOM 9%
HITACHI
/ 38% / \
< _ ^ ^ TELECOM^ ^•^ ^ 11%
1980
- 9 -
/ COMPUTER \ / ^ 28% /
1985 (SOURCE)HITACHI,LTD
EXPANSION OF MOS MEMORY DEMAND
MOS MEMORY: DEMAND DRIVEN MARKET
EXPANSION OF APPLICATION FIELDS
MASSIVE USAGE IN PERSONAL COMPUTERS
0 HITACHI - 10
- 15 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
EXPANSION OF APPLICATION FIELDS r
CONSUMER
COMPUTER
0 A
TELECOM
INDUSTRIAL
1975-1980 V T R
ELEC.6AME HOME APPLIANCES
MAINFRAME MINI COMPUTER
PERSONAL COMP. WORD PROCESSOR
F A X C. 0. EXCHANGE
P B X TELEPHONE A U T O
INSTRUMENTS N C
1980-1985 VIDEO DISC
COMPACT DISC HOME SECURITY
SUPER MINI
P C NETWORK E. TYPEWRITER
DIGITAL PBX DIGITAL C.O.EX.
ROBOT
1985-
HOME AUTOMATION
SUPER COMPUTER
WORKSTATION
V A N L A N 1 N S
CAD CAM FACTORY AUTOMATION ,
©HrTACHl - 11 - (SOURCE)HITACHI,LTD.
WOS IVIEIVIORY MARKET IN PERSONAL COIVIPUTERS
PERSONAL COMPUTER AS A DRIVING ENGINE OF THE OFFICE AUTOMATION SYSTEMS
RAM SIZE EXPANSION
(1) INCREASE OF NEEDS TO PROCESS MORE INFORMATION
(2) INCREASE OF SOPHISTICATED SOFTWARE
0 HITACHI 12
- 16 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
IBM PC RAM SIZE
r
MODEL
P C
PC XT
PC AT
? •
INTRODUCTION
AUG 81
MAR 83
AUG 84
? 85
RAM SIZE
64K BYTES
256K BYTES
512K BYTES
512K BYTES
MOS MEMORY
16K DRAM
64K DRAM
128K DRAM
256K DRAM
> HITACHI 13
TECHNOLOGICAL EVOLUTION OF MOS MEMORY
Trend of High Density by Fine Pattern Process Technology
Trend of Intelligent Function
Toward C-MOS
Diversification of Package
0 HITACHI 14
- 17 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
IMPROVEMENTS IN PROCESS TECHNOLOGY
"s S
i O S
_E
i ^
32
16
0
8
4
2
1
1
-
]5jum
-
-
10' /
. _ i _ I
Vfl V ^ B ^ H
Wj
'
\L i ^ i ^ ^
/¥ 1
w r—
7 t - J -
10' / —
J ^
• \
\ _
• • • •
- '
r—
10' /
/ .
"
-
\'-3 ^ t
— I
• 1 0 '
JlO^ s
-10 bO
1966 1970 1974 1978 1982 1986
10
(SOURCE)HITACHI,LTD.
0 HITACHI 15 -
0 HITACHI
HIGH DENSITY TREND OF DYNAMIC RAM
16K
64K
MEIMORY CELL SIZE (RELATIVE) 256K
1 - (10 )1 1(0 53)11 (0.27)D (0.07)n
7 6 '78 '80 '82
16
•84 '88 YEAR
(SOURCE)HITACHI,LTD.
- 18 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
,MmmBif
• H i ••••'Slri -^C-Tir t ' J
Es • ( • V
.4 «--
.V ^ i ' ' • • ^ ^ 1
r p jiSfefig.-'
HwH^PR
'3 ''':•'
•14/.
'Ml ^^IHH
. . r M . . - . . . ^ , . - t t - Y i - .
0 HITACHI
1M bit Dynamic RAM 17
- ^ T T T P ^ . ^ . - .iJ:^*—- - . •
*iL. ^'M> * r i>
256K bit Static RAM 0 HITACHI 18
- 19 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Park Drive / San Jose, GA 95131 / (408) 971-9000 / Telex 171973
Qoi^'^
TECHNOLOGY TREND OF MOS MEMORY
0 HITACHI
HIGH SPEED/LOW POWER
oFJne Pattern Process
Technolosy oToward C-MOS
HIGH DENSITY PACKAGING
oSkinny PKG
OPLCC/SOP
oMoilule
h V
MOS l iEMORY TECHNOLOGY
HIGH DENSITY ODRAM
256K-^1M oSRAM
64K-^256K
OEPROM
im-^m
HIGH PERFORMANCE OMEMORYORGANIZATION:X1,X4,X8 OHIGH SPEED ACCESS
(Nibble, Static Column, etc.)
19 -
MARKET NEEDS FOR DYNAMIC RAM r
Bit-Density
4K
16K
64K
256K
ITACHI
Memory Organization
XI
®
@
@
@
X4
®
@
X8
O
@
- 7n -
Function
Page Mode
O
©
©
ORequ
Nibble Mode
O
© ired
Static Column
O
© ©St
Pseudo Static
O
© rongly
- V
Access Time
1 5 0 -250ns
1 0 0 -200ns
1 0 0 -200ns
1 0 0 -200nsj
Required
- 20 -
Dataquest Incorporated, A Subsidiary of A.C Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
TECHNOLOGICAL EVOLUTION OF DYNAIYIIC RAM (64K)
IHR Technolog!
0 HITACHI
(256K)
21
TOWARD C-MOS
(1M)
1 HM50256 1 Page
HM5025T 1 Nilible 1
JH 1 HM50464 1 64KX4 Page
HM50465 G4KX4 Nibble
HM5125fi Static CDlumn
HM65256A 32KX8 PS
.
o OMemory Organization
X l , x 4 , x 8
OFunction
High Speed Page
Nibble
Static Column
Serial Out
Pseudo Static
OPackage
Variety
Conventional N-MOS
/High Speed \Higti Density
D Conventional C-MOS
(Low Power)
Hi-CMOS
Full Cover Both Merits N-MOS & C-MOS
/H igh Speed \ High Density
\Low Power /
0 HITACHI 22
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
HI-CMOS TECHNOLOGY
1978 Development of Hi-CMOS Tectinology Applied Higfi Speed 4K SRAM: HM6147
] 979 Development of 16K SRAM: HM6116 Defacto Industry Standard (Ua^j^r-d.-)
1985 Mass-Production of 64K SRAM: HM6264 Development of 256K SRAM: HM62256
Diversification of tlie Products
for
23 0 HITACHI
T ^ Ua^
HISTORY OF C-MOS EVOLUTION 1975
-1 1 L 1980
iiiLec I I ret
0 HITACHI
glCITM HTCH
n
1985 I I I
in MH
mn
Sim
T Kin tin
im Iusi nu
2SM WSI IltM
in IMI1I ItK
tin UU1 tiiS
tinr HKT i.tbi
UK imu
rsiiit
jw : in I mm I Eritn I
=c-'v.-.v.-; • in \ rstm
MI li etm tun
— - • t - ^ ' -MR
Eirtik
2*
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
GENERALTREND OF PACKAGE
as C3 a»
4 0 -
2 0 -
0 HITACHI
OTHERS LCC PGA
PLASTIC DIP
X
1 HERMETIC
'80 '82 '84 '86 '88 '90 - 25 -
J •
PLASTIC
Surface Mount Package
(SOURCE)DATAQUEST,INC.
PLASTIC SURFACE MOUNT PACKAGE
r SYMBOL
NAME
OUTLINE
APPLICATION
PLCC PLASTIC LEADED CHIP CARRIER
^ ^
J BEND
MAINFRAME PERSONAL
COMPUTER TERMINAL
etc.
S O P SMALL OUTLINE PACKAGE
^ ^ ^
GULL WING
PORTABLE COMPUTER
PORTABLE TERMINAL
etc.
FPP ] FLAT PLASTIC PACKAGE
GULL WING
PORTABLE COMPUTER
PORTABLE TERMINAL
etc. ^ ©HITACHI
26
23
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
FUTURE TREND OF MOS MEMORY
Trend of High Density
Diversification of Memory Products
Trend of System on Chip
0 HITACHI - 27 -
TECHNOLOGY TREND (DRAM)
0 HITACHI 28 (SOURCE)HITACHI,LTD.
- 24
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
DIVERSIFICATION OF MEMORY PRODUCTS ^ /2v fyiPO.
DRAM
SRAM
EPROM
Mask ROM
1=0
P A S T
0 HITACHI
1 1
ORAM
PSRAM
SRAM
NVRAM
EEPROM EPROM
QTPROM
Mask ROM
oo
NOW
e CO ^->
c « o
c«
oo
09 L . .
0 3
•
' s CO
(/> OS
es
0 3
OS
CQ CJ
0 3
' 1 DRAM
PSRAM
SRAM
NVRAM
EEPROM
EPROM
OTPROM
Mask ROM
FUTURE
29
EEPROM NEW TYPE MEMORY: EEPROM
Electrically Erasable & Programmable Read Only Memory
Free From Battery Maintenance
On Board Reprogrammability'
0 HITACHI
D
C-MOS SRAM With
Battery Backed
New Generation of EEPROM Density 16 l t ^64K Chip Erase-*Byte Erase 2 Power Supply-^Single 5V Address & Data Latched Advanced Data Protection High Reliability
3n -
- 25 -
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
BUILT-IN MEIVIORY IN A SINGLE CHIP CPU Muit i Chip MPU
C-KOS EPROM HN21CS4
C-MOS MPU HD6301
Built-in
Single Chip CPU Memories on Chip
Mask ROM -^ EPROM -^ EEPROM on Chip on Chip on Chip
^
31
EPROM on Chip MPU HD63701
0 HrTACHI
TREND OF SYSTEM-ON-CHIP
Sirs tern System-on-Chip
Sifstem Single-Chip CPU
System
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Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Dataquest
.£.X2:ET)(::>U D a t a q u e s t
A FRESi LOOK AT JAPAN AND ASIA
Eugene J. Flath Executive Vice President
Intel International
Mr. Flath is Executive Vice President of Intel International and a Director of Intel Japan K.K. He is responsible for expanding the Japanese and Pacific Basin marketplaces. Mr. Flath's career at Intel has been primarily in the manufacturing and development areas. He has been Assistant General Manager of the Components Group, President of Intel Magnetics, and Director of Manufacturing. For the past two and one-half years he has, represented Intel on the Board of Directors of the Semiconductor Research Corporation and has served as chairman of that group. Prior to joining Intel, he was a Product Line Manager at Fairchild Semiconductor Corporation. Mr. Flath has a B.S. degree in Electrical Engineering from the University of Wisconsin and an M.S. degree in Electrical Engirieering from the University of New Hampshire. He is a member of the Institute of Electrical and Electronic Engineers.
Dataquest Incorporated JAPANESE SEMICONDUCTOR INDUSTRY CONFERENCE
April 14-16, 1985 Hakone, Japan
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
A FIRST LOOK AT JAPAN AND THE PACIFIC BASIN
Eugene Flath
A few months ago when Mr Norrett aslced me to speak at this conference, I had just been appointed to my present job. At the time my head was filled with the new challenge and opportunity. Now three months later I find that my learning rate is accelerating with each week that passes.
While not yet an instant expert on Pacif Basin Business, I can, share with you my initial impression of the changing market conditions. Coupled with some observations on the United States and the Japanese based manufacturers.
Twenty-five years ago the market place was served by a rapidly growing United States Semiconductor Industry. Markets were local and only a few large International companies exported Semiconductors to the rest of the world.
Those were the days of protected home markets and where your competitors were just a few miles down the road.
But then market started to change. (Fig.1)
PURCHASING PATTERNS CHANGE
A few years ago we began to see the shift of manufacturing from the United States, Europe and even to some extent Japan to the low labor cost markets of the Pacific Basin.
At first this was a duty drawback operation. All of the supplies and technology came from the home country.
This gradually shifted to a business in which some of the material is purchased locally. Today most, if not all, the material is purchased from "local" suppliers.
This should not have been a surprise to any one. Since it was no secret that the price of everything is lower in Hong Kong or S.E. Asia than anywhere else in the world.
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Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Neither should it Ise a surprise that a region where cheap labor was the prime attraction should evolve into a principal purchasing location.
During the past few years we see an accelerating trend of major and minor corporations to open purchasing offices here in the Pacific Basin.
The strategy is clear. Place a buyer as close to the source of supply and the point of use as possible.
The effect of this shift in purchasing locations and patterns is to erode more quickly the price difference between geographic locations of the world.
In'the absence of governmental interference there will be a deterioration of the protected home market. The price of a product in Hong Kong will quickly IDecome the price of the product in Los Angeles or Tolcyo. The differences will he slight related only non-market factors, such as transportation, duty and some special local service.
The concept of offering a low price in one market to protect the home market price. When an extra product is available will have the effect of setting a new world price buyers of the world will quickly react to that news. Their response will be to purchase the product where it is availalbe, or more likely request that same low price at home. Certainly this pressure will be more intense in the commodity product area, memory and some low end microprocessor circuits., But the entire market will feel this change.
The question is: How will we, the Semiconductor manufacturer react to this changing market.
To answer this question let us first look at the characteristics of these suppliers.
THE PARTICIPANTS
Let us begin by contrasting the evolution of the United States and Japanese Semiconductor manufactuers.
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Dataquest Incorporated, A Subsidiary of AC . Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
In the United States Pioneering Days (Figure 2) the early participants were large, very well financed, vertically-integrated companies. They were already in the electronics business and they had large Research Staffs. As the first devices came out of the laboratory stage they found applications in the companies broad product line.
However, Semiconductor never really loecame the majoir business units, and as a result we entered the transition period in the early 1950's.
Now the integrated circuit had been invented and the business changed, (figure 3), The customers were not only other large companies but also the smaller start-ups as well. At the same time we saw in the United States the beginning of the Start-up fever that was to sweep the electronics industry over the next few years.
The major commercial producers, now are small to mid sized companies as the larger slower moving companies dropped out.
The pattern was set for the future.
Today (figure 4) the merchant suppliers are all tiny to mid sized. Ranging in size from startups with zero revenue to the largest with revenue of just over $5 billion.
The larger electronics companies all have semiconductor facilities - some of which are very large. Their production, however, is all directed internally.
The important point is that each of the merchant companies relies very heavily on its Semiconductor Revenues for its continued burvival as a company.
Contrast this picture with the Japanese Semiconductor manufacturers history.
The pioneers were very much like the early United States companies. Large, vertically integrated, well financed with a large internal market. (Figure 5)
This is where the similarity ends.
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Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
Today the Japanese merchant manufactuers look very much like they did several years ago, (Figure 6). While there are more players there are only very few start-ups that could be considered not vetically integrated.
In effect, each of the merchant suppliers is in many other businesses, and the merchant market revenues represent less than 10% of their Electronics business.
ASSUMPTIONS
First: The dramatic growth of this industry in the past will continue to attract new participants. (Fig.7)
Second: In order to serve the expanding market of the Pacific Basin, there will be an effective shift in manufacturing to the Region.
IMPLICATIONS
The next entrants into the business will have to be very well financed. Since they must face three high hurdles to their staying power.
First. Cost of Entry.
Twelve years ago a silicon plant cost less than $10 million for plant and equipment. The potential output was 30,000, 3 inch wafers per month. The product, very sophisticated for its time was a 4K DRAM. (FiIgure 8).
Technical labor, new college graduate cost $12,000 per year.
Compare that to a typical new plant brought on stream in 1984. The factory is now capable of producing 20,000 6 inch wafers per month, an increase of 3 times in silicon area produced. The plant cost, however, has increased 10 times to j ust under $100 million.
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Dataquesf Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
The product also is more sophisticated and the process more complicated. It is now a 256K DRAM on 1.5 micron design rules.
That new college graduate is one of the real bargains. His starting wage has increased only 3 times to a little under $30,000/year.
If we look at the Revenue produced for that investment, we find that the revenue per wafer has increased only slightly faster than the silicon area. Most of the improvements in density have been off set by the continued decline in Average Selling Price per function.
This effect is most dramatic in the commodity product areas, like the DRAM. The large number of efficient prodducers drive the cost and price of the product down at nearly the same rate.
Therefore as the technnology gets more complex the capital cost per incremental dollar of revenue has tsecome higher. Today the ratio is almost one to one. That is, each new Revenue dollar per year costs one new capital dollar.
This makes the base capital cost high for the new startup.
But what of the manufacturer with captive line who wants to recover some of the big investment by entering the merchant market.
The market growth is still tempting. (Fig. 9.)
And look at the growth of the MOS market. Almost 50% of the total market growth. '83 to '84 canme from just 7 companies in one market only. (Figure 10.)
The second hurdle - what product to chose?
a) Proprietary Product line - a unique new circuit type -good profit but a long investment - first product -development than market development.
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b) A commodity. Memory is the biggest market. It requires little market development, entry can only be made at the highest technical levels. Representing an investment of many hundreds of man months. It is the single most price competitive market.
c) Aquire a technology and or product. License a proprietary design. This method is the quickest to the market. It can be expensive as license fees and technology purchase arrangements can be expensive.
There is now more of a push toward this third alternative. Driven by two factors. 1) The simple economics favor this as the least risky. 2) Changes in governmental position that more and more support the intellectual proprietry rights accross national boundaries.
The third hurdle. Why do I want to stay in a business like this.
The market is at best uncertain. (Figure 11). While the average growth rate has been 20 % over the last 5 years. It has been made up of three flat years and two years of rapid growth.
The lookings numbers in the U.S. are a good example of how dependent the new entrant is on timing.
FUTURE TRENDS
Recognizing that the above factors have a large impact on the established as well as the startup supplier. What will occur in the industry?
RecognizinIg that the customers base is growing most rapidly in the Pacific Basin, I believe that there will be greater emphasis on the type of partnership that have started forming in the past few years. (Figure 12)
These relationships will he aimed at more effectively supporting the customer base by extending product lines and duplicating sources of supply.
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Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
In period of rapid growth these extended networks will assure the customer a continued source of supply.
The second more obvious implication, those manufacturers who can not keep up and be truely efficient produces will fall by the way side. I expect several withdrawals from the commercial market over the next several years. These will come from both the independents and the vertically integrated companies.
The independents will either fail outright or become engineering boutiques. While the vertically integrated companies will gradually return to a captive status.
Third we will continue to see startups in the Pacific Bagin if for no other reason than to satisfy some national goals.
These are fairly safe predictions. The real question is who will be the survivals.
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SEMICONDUCTOR MANUFACTURING
•PURCHASING TRENDS OGEOGRAHIC SHIFT OIMRACTON MANUFACTURING
•MANUFACTURING TRENDS OSUPPLIERS COME AND GO OCOMPARATIVE HISTORY OCOST OF ENTRY OSTART UPS
•FUTURE . ' U OALTERNATE STRATEGIES
^ ' S f J> OWHO WILL SURVIVE
C^CJ ' ' c^'^^l^'^ \ i ^
UNITED STATES SEMICONDUCTORS MANUFACTURES
PIONEER DAYS (PRE 1955)
•LARGE-WELL FINANCED, VERTICALLY INTEGRATED
•RESEARCH FOCUS
•SEMICONDUCTORS WERE A NICHE BUSINESS
Fin . 2
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Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 RIdder ParK Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
UNITED STATES SEMICONDUCTORS MANUFACTURES
TRANSmON PERIOD (1955-1970)
•VERTICAL COMPANIES WITHDREW FROM THE MARKET
•MERCHANTS OSMALLTOMIDSIZE OREVENUE MOSTLY FROM SEMICONDUCTORS
•SOME SPECIALFTY START UPS
Fig. 3
UNITED STATES SEMICONDUCTORS MANUFACTURES
CURRENT (POST 1970)
•VERTICAL COMPANIES-CAPTIVE ONLY
•MERCHANTS OTINY TO MID SIZE OREVENUE MOSTLY FROM SEMICONDUCTORS
• NUMEROUS SPECIALITY START UPS
• FOREIGN START UPS OLARGE-VERTICALLY INTEGRATED OWELL ESTABLISHED
Fici. 4
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Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 96131 / <408) 971-9000 / Telex 171973
JAPAN SEMICONDUCTORS MANUFACTURES
PIONEERS (PRE 1975)
•VERTICALLY INTEGRATED OUVRGE-WELL FINANCED OMOST HAD RESEARCH PROGRAMS OINTERNAL MARKET-LARGE
•VERY FEW FOREIGN COMPANIES
Fig. 5
JAPAN SEMICONDUCTOR MANUFACTURES
CURRENT (POST 1975)
•VERTICALLY INTEGRATED OLARGE COMPANIES BECOME STRONGER
•START UPS OMID TO SMALL SIZE-VERTICALLY INTEGRATED OFOCUSED EXTERNAL MARKET OA FEW MORE FOREIGN COMPANIES/JOINT VENTURES OVERY FEW SEMICONDUCTOR ONLY SUBSIDIARIES
Fi r . 6
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ASSUMPTIONS
F I R S T : THE DRAMATIC GROWTH OF THE MARKET WILL ATTRACT NEW PARTICIPANTS.
SECOND: MANUFACTURING CAPACITY WILL INCREASE IN THE PACIFIC BASIN.
Ain^ j&r^n JSAA-
.^ (\l4r^ a^ , / f *vnD
F i> . 7
CX)ST OF ENTRY
CAPACITY DENSrTY COST
PLANT EQUIPMENT TOTAL
ENGINEER
1972
30,000/3" 5|j
$4.0 M 5.0 M
$9.0 M $11.000/YR
1984
20,000/6" 1.5|j
$40.0 M 55.0 M
$95.0 M $28.000/YR
INCREASE
3x 11 X
10.5 X t 2.5 X
Fig. 8
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Oataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (406) 971-9000 / Telex 171973
WORLDWIDE SEMICONDUCTOR MARKET (PER DATAQUEST)
I960 1965 1970 1975 1980
Fig. 9
INCREASE IN DIGITAL MOS SALES IN 1984 ($M) IB
900
800-
700-
400
0 - ^ NEC HFTACHI IfJTEL FLUrfSU TOSHIBA Tl AMD
Fig. 10
5c!ura: -OQ
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Dataquesf Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
''r ''-SEMICONDUCTOR FLASH REPORT
FOR U.S MARKET 1.7
1.6
1.5
14-
1.3-
^2•
03 1.1 3
1.0 •
0 .9-
0.8 •
0 7
0.6 •
a: ;
m""^ \r
ry
0.5 ' n I I I I I I I I > I I 11 I [ I M N I [ I I I I I I 1 I I I I I I r I [ I I I I u I I I I 1 I I I ] I I I I n 1 I I I J «Bff -»61- I S e r - ^ j 1989- 4864-
dJ-f 1^ BOOK-TO-BILL RATIO ^ f
Fig. 11
CONCLUSIONS
•MOST EXPANSION OF NEW CAPACrrY WILL BE IN PACIFIC BASIN.
^PARTNERSHIPS WILL CONTINUE TO DEVELOP OPRODUCT LINE ESTABLISHMENT OCUSTOMER SUPPORT
>WITHDRAWALS FROM THE BUSINESS ^ i , /.? o i -f)^'' WILL ACCELERATE.
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Fig. 12
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Dataquest Incorporated, A Subsidiary of A.C Nielsen Company /1290 RIdder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
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SUMMARY OF CONFERENCE
Osamu Ohtake Manager of Research
Japanese Semiconductor Industry Service Dataquest Incorporated
Mr. Ohtake is the Tokyo-based Manager of Research for Dataquest's Japanese Semiconductor Industry Service and is responsible for strategic research on technologies, markets, products, and manufacturers. In addition, he manages the Japanese Semiconductor Industry Service capacity data base. Prior to joining Dataquest, Mr. Ohtake worked for 10 years as a reporter, and most recently as Components Group Manager, for Dempa Shinbun, a daily electronics industry newspaper published in Japan. In this capacity, he managed the collection and analysis of information on semiconductor markets, pricing, research and development, market shares, and company personnel and management. He has authored reports on the Japanese VLSI project and on semiconductor materials and equipment markets. A native Japanese, Kr. Ohtake is a graduate of Tokyo Denki University, specializing in coiranunications.
Dataquest Incorporated JAPANESE SEMICONDUCTOR INDUSTRY CONFERENCE
April 14-16, 1985 Hakone, Japan
Dataquest Incorporated, A Subsidiary of A.G. Nielsen Company /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973
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IN TIME FOR PUBLICATION
Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, GA 95131 / (408) 971-9000 / Telex 171973
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