semiconductor industry conference · semiconductor industry service howard z. bogert mr. bogert is...

Semiconductor Industry Conference

October 15-17, 1984 Hotel Del Coronado San Diego, California

£:i: I Pui

1290 Ridder Park Drive San Jose, California 95131

(408) 971-9000 Telex: 171973

Sales/Service offices:

UNITED K INGDOM GERMANY DATAQUEST UK Limited DATAQUEST GmbH 144/146 New Bond Street In der Schneithohl 17

London WIY 9FD D-6242 Kronberg 2 United Kingdom West Germany

(01) 409-1427 (06173) 6921 Telex: 266195 Telex: 410939

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 Tfelex: 630842 Telex: 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.

Printed in the United States of America. All rights reserved. No part of this publication may be reproduced, stored in retrieval systems, or transmitted, in any form or by any means—mechanical, electronic, photocoptying, duplicating, microfilming, videotape, or otherwise—without the prior written permission of the publisher.

© 1984 Dataquest Incorporated

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CX^^:^#a Dataquest 1984 SEMICONDUCTOR INDUSTRY CONFERENCE

October 14-17, 1984 Hotel Del Coronado

San Diego, California SUNDAY, October 14

3:00 p.m. to 7:00 p.m. Registration Registration Area 8:00 p.m. to 9:30 p.m. Cocktails Garden Patio

MONDAY, October 15

7:30 a.m. Buffet Breakfast Ballroom 7:30 a.m. Registration Continues Grand Hall Foyer 9:00 a.m. Welcome Regent Empress Room

Howard Z. Bogert Vice President Dataquest Incorporated

9:30 a.m. Semiconductor Outlook—Soft Landing or Hard Regent Empress Room Frederick L. Zieber Senior Vice President Dataquest incorporated

10:00 a.m. The Expanding Universe of Semiconductors Regent Empress Room Chuck Thompson Vice President Director, World Wide IVIarketing l^otorola Semiconductor Sector

10:30 a.m. Coffee Break Regent Empress Room 11:00 a.m. 1984: Before and Beyond Regent Empress Room

Jim Riley Senior Vice President Dataquest Incorporated

11:30 a.m. Bipolar Fights Back Regent Empress Room John C. East Vice President Bipolar Division Advanced l^icro Devices

12:15 p.m. Lunch Ballroom 1:45 p.m. Financial Analyst's Session Stuart Room

(Presentations by Pru-Bache Staff and Industry Executives) Mini-Conference Sessions (Presentations by Dataquest StafO

CAD/CAM and ASICs Regent Empress Room Memory Hanover Room Equipment and Technotogy Windsor Complex

3:00 p.m. Financial Analyst's Session Stuart Room (Presentations by Pru-Bache Staff and Industry Executives) Mini-Conference Sessions (Presentations by Dataquest Staff)

Geographic l i^nds Windsor Complex Microprocessors Oxford Room User Workshop Regent Empress Room

6:00 p.m. Cocktails Promenade Deck 7:00 p.m. Dinner Ballroom 8:30 p.m. Dinner Speaker Ballroom

Economic Outlook—What Will The Election's Impact Be? A. Gary Shilling President A. Gary Shilling and Co., Inc.

9:30 p.m. Informal Discussion and Hosted Refreshments Ballroom (over)

Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, GA 95131 / (408) 971-9000 / Telex 171973

TUESDAY, October 16

7:45 a.m. Buffet Breakfast Ballroom 8:30 a.m. Pervasiveness—The Perspective Revisited Regent Empress Room

Charles H. Phipps Vice President, Semiconductor Group Manager, Market Development Texas Instruments Incorporated

9:00 a.m. Systems Design At The Chip Level Regent Empress Room Doug Ritchie Vice President Consumer Specific Products National Semiconductor Corporation

9:30 a.m. Distribution, A New Era Regent Empress Room John Abram Executive Vice President Arrow Electronics

10:00 a.m. Coffee Break Regent Empress Room 10:30 a.m. Servicing High-Performance Systems Designers Regent Empress Room

Roger Smullen President and Chief Executive Officer Applied Micro Circuits Corporation

11:00 a.m. Proliferation of Products and Systems in Japan Regent Empress Room Jerry Crowley President and Chief Executive Officer Oki Semiconductor

11:30 a.m. ASICs Come of Age Regent Empress Room Henri Jarrat President and Chief Operating Officer VLSI Technology

12:15 p.m. Lunch Baih lom 1:45 p.m. Applications, The Fuel of Pervasiveness Regent Empress Room

Ken McKenzie Associate Director, Semiconductor Group Dataquest Incorporated

2:15 p.m. Highly Integrated Systems Regent Empress Room Jon Cornell Senior Vice President and Sector Executive Harris Semiconductor

2:45 p.m. Fast CMOS: Key to VLSI Pervasiveness Regent Empress Room T. J. Rodgers President Cypress Semiconductor

3:15 p.m. Telecommunications Impact of Semiconductors .Regent Empress Room Marisa Bellisario Managing Director and Chief Executive Officer Italtel Group

4:00 p.m. Industry Athletic Challenge 10 km Course Once again Lane Mason of the SIS staff will host this industry's annual running event. Sign-ups at the registration desk.

6:00 p.m. Cocktails Garden Patio 7:00 p.m. Dinner—Western Barbeque Garden Patio 9:00 p.m. Informal Discussion and Hosted Refreshments Garden Patio

continued on next pag #

WEDNESDAY, October 17

7:45 a.m. Buffet Brealdast Ballroom 8:30 a.m. Ideas and the Proliferation of Technology Regent Empress Room

Professor Everett M. Rogers Institute for Communications Stanford University Judy Larsen, Ph.D. President Cognos Associates

9:00 a.m. Europe—A Technological Backwater? Regent Empress Room Malcolm Penn Director Dataquest U.K. Ltd.

9:30 a.m. Semiconductor Equipment: Key to Pervasiveness Regent Empress Room Bill Bottoms President Semiconductor Equipment Division Varian Associates

10:00 a.m. Coffee Break Regent Empress Room 10:30 a.m. The Impact of Workstation Proliferation Regent Empress Room

Aryeh Finegold President Daisy Systems

11:00 a.m. Service, Software, and Silicon Regent Empress Room Wilfred J. Corrigan President and Chief Executive Officer LSI Logic

11:30 a.m. LSI Growth: 1985-1995 Regent Empress Room Jack Carsten Senior Vice President and General Manager Intel Corporation

12:00 noon Conference Conclusion Regent Empress Room 12:30 p.m. Buffet Luncheon Ballroom

Semiconductor Industry Service

Howard Z. Bogert Mr. Bogert is a Vice President of DATAOUEST and Director of its Semiconductor Industry Service. During his 23 years in electronics, he has held management positions in market research, product planning, long-range planning, research and development, and engineering. Most recently, he was a Divisional Vice President of Engineering for Rockwell International. Earlier, he was Director of MOS Development for Siliconix, and Manager of Design for AMI. Mr. Bogert holds a B.S. degree In Electrical Engineering from Stanford University, an M.S. degree from the University of Maryland, and an M.B.A. degree from the University of Santa Clara.

Kenneth V. McKenzie Mr. McKenzie is Associate Director of DATAQUEST's Semiconductor Industry Service. He is responsible for all research activities on semiconductors and related publications. His other duties include internal data processing coordination for the Semiconductor Industry Service and research into specific end-user markets. During Mr, McKenzie's 14 years in the electronics industry, he has held management positions in both design engineering and marketing. His most recent position was as Marketing Manager at ZIlog, Inc. Prior to that, Mr. McKenzie was Marketing Manager for 8-blt microprocessors at Intel Corporation.

James F. Riley Mr. Riley is a Senior Vice President of DATAQUEST. Previously, he was President of SIgnetics, a subsidiary of Corning Glass Works Incorporated, and of Intersil Incorporated. He has 20 years of experience In the semiconductor Industry, the last nine of which have been with DATAQUEST. Mr. Riley has considerable experience In corporate planning, marketing, and general management. Mr. Riley received a B;S. degree in Business Administration from Lehigh University, where he was elected to Phi Beta Kappa.

Frederick L. Zieber Mr. Zieber is a Senior Vice President of DATAQUEST, a member of Its Executive Committee, and the Director of Its Semiconductor Group. The Semiconductor Group Includes the Semiconductor Industry Service, the European Semiconductor Industry Service, the Japanese Semiconductor Industry Service, and the Semiconductor User Information Service Mr. Zieber has 12 years of 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 from Stanford University and an M.B.A. degree from the Graduate School of Business at Stanford University.

Lane iVIason Mr. Mason is a Senior Industry Analyst for DATAQUEST's Semiconductor Industry Service. He has been with DATAQUEST for five years, during which time he has gained Increased responsibility for coverage of MOS memory markets and company analyses, as well as general research support. Mr. Mason has 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 U.C.L.A. in the Department of Economics.

(over)

Robert E. IVIcGeary Mr. McGeary is a Senior Industry Analyst for DATAQUEST's Semiconductor Industry Service. Prior to joining DATAQUEST, he was Product Marketing Manager at Applied Materials, Inc., where he managed the worldwide product marketing activities for the Dry Etch Division and managed product support for European dry etch business. Previously, he worked as Product Marketing Manager at GCA Corporation/IC Systems Group, as Accelerator Physicist at Lawrence Berkeley Laboratories, as a Nuclear Engineer at Mare Island Naval Shipyard, and as a Reactor Operator at the University of Washington. He received B.S. degrees in Physics and Mathematics from the University of Washington and an M.B.A. degree from St. Mary's College.

Andy Prophet Mr. Prophet is a Senior Industry Analyst for DATAQUEST's Semiconductor Industry Service. He is responsible for analyzing the application-specific market environment and future technology trends. Prior to joining DATAQUEST, he was Market Segment Manager for Synertek, Inc., and was responsible for major account marketing strategies for its customers. Previously, Mr. Prophet was CAD Director, Product Line Manager, and Circuit Design Manager at American Microsystems, Inc., and Teledyne. He has a B.S.E.E. degree from Illinois Institute of Technology, an M.S.E.E. degree from San Jose State University, and an M.B.A. degree from the University of Santa Clara.

IVIel Thomsen Mr. Thomsen is a Senior Industry Analyst for DATAQUEST's Semiconductor Industry Service. He is responsible for analyzing the market environment and future technology trends for microprocessors, microperipherals, and microcontrollers. Prior to joining DATAQUEST, he was Product Marketing Manager for Aehr Test Systems and was responsible for marketing dynamic burn-in systems used for reliability testing of digital integrated circuits. Mr. Thomsen has also held positions as a Product Marketing Manager and as Field Applications Engineer at Zilog, Inc., as Senior Design Engineer at Heathkit, and as Design Engineer at Magnavox, Inc., and at Sylvania Systems Division. He has a B.S.E.E. degree from the University of Michigan and an M.S.E.E. degree from Purdue University.

Gall Kelton-Fogg Ms. Kelton-Fogg is an Industry Analyst for DATAQUEST's Semiconductor Industry Service. Her area of responsibility is the end-use segmentation of semiconductor consumption, including application, geographical, and distribution analysis. Ms. Kelton-Fogg has worked in technology assessment, market research, and consulting for five years. Prior to joining DATAQUEST, she was with SRI International and the University of California, San Francisco. She has B.S. and M.S. degrees in Scientific Journalism from the University of Wisconsin-Madison.

Thomas E. Holland Mr. Holland is a Research Analyst for DATAQUEST's Semiconductor Industry Service. For the past three years, Mr. Holland has been active in research in the linear, discrete, and optoelectronic semiconductor markets. Prior to joining DATAQUEST, he was Director of Research at Technical Operations (West), where he directed company- and DOD-sponsored research and development. He also served as a consultant to the Director of Defense Research and Engineering on classified DOD programs. As a staff physicist at the Los Alamos Scientific Laboratory, he conducted basic research in detonation and shock phenomenology. He received B.S. and M.S. degrees in Mathematics and Physics from the University of Alabama.

Barbara Van Ms. Van is a Research Analyst for DATAQUEST's Semiconductor Industry Service. She is responsible for computer data bases in semiconductor consumption, market share analysis, and company financial analysis. Prior to joining DATAQUEST, she worked in a research capacity for a marketing research firm. Ms. Van has a B.A. degree in Commerce from the University of Santa Clara.

Arden DeVincenzi

Ms. DeVincenzi is a Research Analyst for DATAQUEST's Semiconductor Industry Service. Her responsibilities include research and analysis of the semiconductor industry with respect to equipment and materials. Prior to joining DATAQUEST, she worked in a computer systems marketing group where she maintained a nationwide distribution network, developed and coordinated marketing programs, and provided technical assistance on IBM, NCR, and Honeywell systems Ms. DeVincenzi received a B.S. degree in Marketing and Finance from California Polytechnic State University, San Luis Obispo

Katy Guill

Ms. Guill is a Research Associate with the Semiconductor Group. While at DATAQUEST, she has worked on projects including worldwide semiconductor forecasts, economic models, and development of computer data bases. Currently, she assists Mr. Mason in the memory market area and provides general research support, Ms. Guill received a B.S. degree in Business Administration from California Polytechnic State University, San Luis Obispo.

Janet M. Rey

Ms. Rey is a Research Associate for DATAQUEST's Semiconductor Industry Service. She assists in researching microprocessors, microperipherals, and microcontrollers. She has worked for Intel Corporation and Atari, Incorporated. Ms Rey received a B.S. degree in Business Administration from San Jose State University.

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Anthea C. Stratigos

Ms. Stratigos is a Research Associate for DATAQUEST's Semiconductor Industry Service. Before joining DATAQUEST, she was an Information Developer for IBM Corporation, where she documented and supported software development and products for IBM's mainframe systems Ms Stratigo has a B.S. degree in Communication from Stanford University

1290 Ridder Park Drive / San Jose, CA 95131

(408) 971-9000 Telex: 171973

Dataquest

(:::a Dataquest

Dataquest

SEMICONDUCTOR INDUSTRY CONFERENCE EVALUATION QUESTIONNAIRE

San Diego, California October 15-17, 1984

Thank you for attending our Semiconductor Industry Conference. Would you please assist us in planning our next conference by completing and returning this questionnaire?

1. Please rate each presentation on a scale of 1 to 10 (where 10 is highest in terms of your approval):

CONTENT DELIVERY (1 to 10) (1 to 10)

COMMENTS (Use reverse side if necessary)

Zleber, Industry Outlook

Thompson, Expanding Universe

Riley, Before and Beyond

East, Bipolar

Ptiipps, Pervasiveness Perspective

Ritchie, Systems Chip Design

Abram, A New Era

Smullen, Servicing Systems

Crowley, Proliferation in Japan

Jarrat, ASICs Come of Age

McKenzie, Applications

Cornell, Integrated Systems

Rodgers, Fast CMOS

BellisarIo, Telecommunications

Rogers and Larsen, Ideas

Penn, European Backwater

Bottoms, Equipment Pervasiveness

Finegold, Workstation Impact

Corrigan, Service and Silicon

Carsten, LSI Growth

2. Mini-conference Evaluation. Please rate the meetings you attended on a scale of 1 to 10 (where 10 is highest in terms of your approval):

CONTENT DELIVERY (1 to 10) (1 to 10)

COMMENTS (Use reverse side if necessary)

CAD/CAM and ASIC

Equipment and Technology

Memory

Microprocessors

(over)

Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973

2. Mini-conference Evaluation (Continued).

CONTENT DELIVERY COMMENTS Geographic Trends

User Worl<shop —

Financial

3. Would you like more mini-conferences at next year's SIS Conference? Yes No

4. At our next industry conference, would you prefer more or less of the following types of speakers?

MORE LESS

DATAOUEST Speakers

Speakers from Large Semiconductor Companies

Speakers from Small Semiconductor Companies

Speakers from Semiconductor Users

Speakers from Semiconductor Equipment and Materials Suppliers

Speakers from Distributors

Speakers from the Financial Community

5. Please suggest other types of speakers you might like to hear.

6. How would you rate the conference facilities (1 to 10)?

Location Guest Rooms Meals Meeting Rooms Recreational Facilities

7. Topics that would be of interest to you for the next Semiconductor conference:

8. Comments:

9. Your primary interest in the semiconductor industry is as a: Manufacturer

Service Vendor User Financial Analyst Other (Please Specify)

Name and Company (optional)

Dataquest

Taizo Abe

John Abram

Irv Abzug Harriet Abzug

Jet Advani

Edgar Anderson

Shelley Anderson

Giuseppe Anerdi

Alex Au

Erick Ayers

Willi Bacher

Bob Ball

Juan Bardina Patricia Bardina

lann Barron

John Baskett

Larry Baxter

Pete Bejarano

Terry Bell

Dr. Albert Belle Isle

Marisa Bellisario

Carol Bender

Giarmi Bertolini

SEMICONDUCTOR INDUSTRY CONFERENCE October 15 through 17, 1984

San Diego, California

List of Attendees

Shinko Electric Industries Company, Ltd.

Arrow Electronics

IBM Corporation

IBM Corporation

Messerschmitt-Boelkow-Blohm GmbH

Bank of the West

Fiat Semelco

Vitelic Corporation

Motorola Inc

Dimos AG

SAI-SEMI Specialists

Atcor Corporation

INMOS Corporation

Panatech Semiconductor

Dexter Corporation-Hysol Division

Trilogy Systems

Micro Component Technology

Custom Silicon, Inc.

Italtel Telematica

Dataquest Incorporated

Italtel Telematica

Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973

Max Bertolino-Zan

Prakash Bhalerao

Jacques Biais

Robert Bickers

John Birkner

Anthony Blenk

Randy Block

Abe Bluestone

Betty Bluford

Howard Bogert Carol Bogert

Dmitry Bosky

G. William Bothwel1

Patricia Bothwel1

Timothy Bottoms

Wi 11 iam Bottoms

Thomas Bowman

Ken Brabitz

Del Brand Julie Brand

Kathy Braun

Holger Bree

Alan Brigish

George Bristol

Donald Brooks Teresa Brooks

Ing. C. Olivetti &C., S.p.A.

Digital Equipment Corporation

Rhone-Poulenc

Atcor Corporation

Monolithic Memories

Mutual of New York

Storm, Block & Associates

Teradyne, Inc.



Security Pacific Capital Corporation

Northern Telecom, Ltd

Northern Telecom, Ltd

Bank of America

Varian Associates

Applied Materials. Inc.


ITT Semiconductors

Western Digital Corporation

Messerschmi tt-Boelkow-Blohm GmbH

Videolog

Prudential-Bache Securities

Fairchild Camera & Instrument Corporation

Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973

C . "Kip" Brown

Neill Brownstein

Stan Bruederle

Joan Bui lock

Robert Bullock

Ron Butler

Josh Camba Miriam Camba

Franco Carnevali

Jack Carsten

Wade Chang

Dennis Chant

Sen Chen

Adam Chowaniec

Jack Christy

Lee Chu

Vic Chuidian Joanne Chuidian

E . Dennis Col bourne

Peyton Cole

Tom Col 1 ins Susan Col 1 ins

Perry Constantine

Tito Conti

Jon Cornel 1 Mary Cornel 1

MOS Electronics Corporation (MOSEL)

Bessemer Venture Partners


Indium Corporation' of America

Indium Corporation of America

Teradyne, Inc.

Interlek, Inc.

Telettra S.p A.

Intel Corporation

ERSO/ITRI

Plessey Solid State

Air Products <Sc Chemicals, Inc.

Commodore International, Ltd.

Mitsubishi Electric Corporation

Mostek Corporation

Interlek, Inc.

Northern Telecom Electronics, Ltd,

Fairchild Camera & Instrument Corporat ion

Tandem Computers, Inc.

LSI Logic Corporation

Ing. C. Olivetti & C , S . p . A .

Harris Semiconductor


Wilford Corrigan Sigrun Corrigan

Gary Cowles

Patricia Cox

Wi 11iam Creamer

Herbert Criscito

Jerry Crowley Nancie Crowley

Bill Cruizkshank Donna Cruizkshank

John Cummings

Joseph Curry

A. C. D'Augustine

Colman Daniel

Peter Danna Lorraine Danna

Edward Day

Ardan DeVincenzi

Michael Denick

Edward Desmond

Mark Desrosiers

Bea Destin

Daniel Devine

Tom Dexel

Stephen Dexter

Dr. Vir Dhaka


Datapoint Corporation


Bank of America

RCA Corporation

Oki Semiconductor

Shinko Electric America

Electric Power Research Institute

Semiconductor Microelectronics Internalional

INMOS Corporation

Hami1ton/Avnet

Philip A. Hunt Chemical Corporation

Motorola, Inc.


IBM Corporal ion

IBM Corpora t ion

IBM Corporal ion


Temescal


Sears Investment Management Company

Micromos


Henry Dieselman

James Diller June Diller

John Dishman

Hubert Dohman Martha Dohman

Richard Douglas

William Douglass

Emi 1io Dragoni

Phi 11ip Drayer

Richard Dressier

Kevin Driscol 1

Roger Dunbar

John East

Robert Eckelmann

Ola Eckholm

Oliver Edwards

Jeffrey Ehr1ich

Mahmoud Elhamamsy

Mark ElIsberry

Richard Engli sh

Aldo Enrici

Wi11lam Everden

J im Favier

Beverly Feldman

Aryeh Finegold

Perkin-Elmer Corporation

Sierra Semiconductor Corporation

AT&T Bell Laboratories

Monsanto Electronic Material Company

Data General Corporaton

AMP, Inc.

Italtel Telematica

Enviro i imental Processing, Inc.

Mostek Corpo ra t ion


Arthur Young Sc Company

Advanced Micro Devices, Inc.

United States Department of Commerce

LM Ericsson Corporation

Motorola, Inc.

General Electric Company

AT&T Information Systems

Holt, Inc.

Hitachi America, Ltd.

AT&T Information Systems

Mullard. Ltd

Philip A Hunt Chemical Corporation


Daisy Systems Corporation


Doug Finke

Frank Florence

Karen Foley

Pete Fowler

Linda Fredericks

Werner Freiesleben

Harvey Frye

Brian FulImer

Orlando Gal legos

Penny Gal legos

Antonio Garcia Carolyn Garcia

David Garni tz

Tom Get linger

Jerry Gibbs

Kenneth Giles

Sara Giles

Marshall Gingold

Gene Goebel

J im Goldey Jeanne Goldey

Bob Gonzalez

Oliver Goold

Michael Graff

Milton Graimatt, III

Alan Grebene

Intel Corporation



INMOS Corporation


Wacker Siltronic Corporation

Eaton Corporation


Zytrex Corporation


Interlek, Inc.

First National Bank of Boston


ZyMOS Corporation

Bipolar Integrated Technology, Inc



Shipley Company, Inc


Motorola, Inc

GBL/Goold Electronics Corporation

Harris Corporation

Lex Service, Inc.

Microlinear Corporation

Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 RIdder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973

Rupert Grimm

Wendy Grossmen

Katy Guill

Paul Gupta

Dave Guzeman

Sardar Haddad

Bernard Hadley

Erick Hagmann

Iza HalIberg

Brendan Halpin

S. Ham

Donald Hamman

Fred Haney Barbara Haney

Mike Hankal

J. Harris

Basil Harrison

Paul Hart

Dan Hauer

John Hayn

John Height ley

Joseph Hei tz

Tom Hendrickson

Anna Henery

Carl Hildebrand Gail Hildebrand

BA Investment Management Corporation



Inters!1, Inc.

ZyMOS Corporation

Mostek Corporation

Stack GnbH



IDA Ireland

Tristar Semiconductor, Inc.

Teradyne, Inc.

Investors in Industry


Acrian, Inc.

IBM Corporation

Hughes Aircraft Companv

S-MOS Systems, Inc.

McDonnell Douglas Microelectronics

INMOS Corporation

Telic-Alcatel

VHSIC Technology Corporation

Investors in Industry

Perkin-Elmer Corporation

Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973

Jay Hoag

John Hodgson

Bob Hoffman

Adrian Hohn

Michael Hollabaugh Debbie Hollabaugh

C h a r l e s Holt

Jennifer Hughes

Annmarie Ihle

Elizabeth Isaacs

John Jackson

Richard Jacobs

Richard Jacobs

Henri Jarrat

Frank Jelenko

Bob Jenkins Carolee Jenkins

Carl Johnson

Dwight Johnson

Dave Jones

Eric Jones

Hisao Kanamaru

Bert Kehren

Anthony Keig

James Kelley

Gail Kelton-Fogg

Citibank

VHSIC Technology Corporation

IBiA Corporation

LTX Corporation

International Microelectronic Products

Xerox Corporation

Ketchum Public Relations

IBM Corporal ion




Schweber Electronics, Inc.

VLSI Teclmology, I n c .

NEC Electronics USA, Inc.

Motorola, Inc.

.Zilog, Inc.

Eastman Kodak Company

Interlek, Inc

Bank of the West

Hitachi, Ltd.

Mostek Corporation

Union Carbide Corporation

NEC Electronics USA. Inc.


Dafaquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973

G. Mart Kernahan Elaine Kernahan

Jerry Kiachian

Gary Kibblewhite

Marshall Kidd

Charles Kimball

Marilyn Kissel

Richard Klein

Richard Konrad

Abe Kosakowsky

Andrew Koshar

C. V. Kovac

Fran Krch

Dan Krupka

Robert Kuhling

Hans Kurner

Burt Lancaster

Terry Lancaster

Dr. Judy Larsen

Richard Lawry Christine Lawry

George LeCrenn

Bob Lee Dorma Lee

Sang Lee Een Yearp Lee

Yong Lee

Exiiios Semiconductor Corporation

Intersi1, Inc.

LEX Corporation

General Electric Trust Investment

Morgan Guaranty Trust

Signetics Corporation

Prudentia1-Bache Securities

Synertek, Inc.


Japan Electronics Bureau

Rockwell International Corporation

GTE Microcircuits


Calma Company

ESEC USA Inc.

Air Products Sc Chemicals, Inc.

DuPont Pension Fund

Cognos Associates

Atcor Corporation

Hoya Corporation, Electronics Division

Aetna Life and Casualty

Tristar Semiconductor, Inc.

Hyxmdai Electronics America

Dataquest Incorporated, A Subsidiary of A.C Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973

Mike Leibowitz

Robert Lenz

Kenneth Levy Gloria Levy

Edward Linde

Bob Lipp

C. Fred Little Betsy Little

Jay Litus, J r .

Herschel Loomis

Alan Louwerse

Ron Love 1 and

Paul Lovett Anne Lovett

Toby Mack

Azmat Maiik

Joe Marcello Betty Marcello

Dieter Marenbach

Bernard Marren

Harry Marshal 1

Randy Marshal 1

Jaime Martin

Jim Mart in Diane Martin

Lane Mason

Peter Masucci

Quality Automation, Inc.

RCA Corporation

KLA Instruments, Inc

IBM Corporation

California Devices, Inc.

Interconics

Toshiba America, Inc.

Naval Postgraduate School

ZyMOS Corporation

Department of Trade and Industry

Air Products & Chemicals, Inc.

National Electronic Distributors Association

Mitsubishi Electronics America, Inc

Interiek, Inc.

Western Digital Corporation

Western Microtechnology

J H. Whitney & Company

Raytheon Corporat ion

California Devices, Inc.

Capital Research Company




John Matlock

Gunter Matthai Paula Matthai

James McElwee

Robert McGeary

Ken McKenzie Debra McKenzie

Cameron McPhail

D. A. Mehta

Vern Meissner Dolores Meissner

Patricia Me laugh

John Mel gal vis

Arthur Midi 1i

Graham Mi 1ler

Norman Mi 1ler

Ralph Mi Her

Thomas Mino

Alicia Morehouse

Rick Morrison

Jack Murphy

Satoshi Nagata

Thomas Nelson

Ed Neubauer

Jean Paul Neuville

James Newcomb

S.E.H. .America

Robert Bosch CtaibH

Security Pacific Capital Corporation



Scottish Development Agency



Bank of New York

IBM Corporation

Wells Electronics, Inc

LTX Corporation

Microlinear Corporation

TRW, Inc.

AT&T Technologies, Inc.


AT&T Technologies, Inc

Philip A Hiuit Chemical Corporation

Mitsui High-Tek, Inc.

Union Carbide Corporat ion

NEC Electronics USA, Inc.

Sagem


Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Parl< Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973

Chr i s Newham

Jack Ni I s s o n

Gene Norreit

Mark Norwood

Bill O"Byrne

Dan 0'Nei11

Mary Olsson

Jack Ordway

Richard Orri11

Drew Osterman

Jean Page

Giovanni Pagliosa

Robert Palmer

Dennis Parker

Gerald Parker

Michael Pawlik

Malcolm Penn Gill Penn

Randall Peters

James Peterson

Richard Petritz Grace Petritz

Larry Phi 11ips

Charles Phipps


Hewlett-Packard Company


Intel Corporation

Honeywe11, Inc.

Adler & Company


Vitelic Corporation

IBM Corporation

International CMOS Technology


Honeywell ISI, S.p.A.

Mostek Corporation

INMOS Corporation

IBM Corporation



Texas Instruments, Inc.

Silicon Systems, Inc.

INMOS Corporation

Lehman Management Company

Texas Instruments, Inc.


Martin Plotkin

Kathryn Plumb

James Poitras

Tom Popek

Skip Powers

Nand Prasad

Walter Price

Andrew Procassini

Timothy Propeck

Andy Prophet

Christine Ragoucy

Gerald Ramsey

John Raszcewski

Paul Reagan

N. Damodar Reddy

Daniel Reeves

Janet Rey

Thomas Reynolds Maryanne Reynolds

Donald Richard

J im Riley

Douglas Ritchie

George Robertson

Peter Roche

T. J Rodgers Kathleen Rodgers


First Interstate Bank


Zilog, Inc.

XTAR Electronics, Inc.

Interlek, Inc.

Rosenberg Capital Management

Hyundai Electronics America

Monolithic Memories


Dieli

AT&T Technologies, Inc.

I ^ Corporation

GCA Corporation

Modular Semiconductor, Inc.

Eaton Corporation


Sierra Semiconductor Corporation

Atari Corporation


National Semiconductor Corporation

Interlek, Inc.

Data General C o r p o r a t o n

Cypress Semiconductor C o r p o r a t i o n


Everett Rogers

Enzo Rognoni

Geoff Rowett

Dave Royse

Robert Rusnack

Malcolm Russ

A. Graham Sadler

Frank Semnann Nancy Samnann

Bi 11 Sams

Judy Sanchez

Richard Santi11i

Robert Santos Midge Santos

Edwin Sauve'

Dick Schaeffer

Tom Schauf

John Scholes

John Schumacher

Susan Scibetta

E. Weston Seaman Betsy Seaman

Frank Seestrora Joaim Seestrom

Monte Seiters

Jerry Shames

John Shea Flor Shea

Stanford University

Ing. C. Olivetti & C , S.p.A.

LTX Corpo ra t ion

IBM Co rpo ra t ion

IBM Corporation


Northern Telecom Electronics, L t d .


Assisted Technology

Bank of America

RCA Corporation

Hewlett-Packard Company


The Wall Street Journal

Dynamit Nobel Silicon, Inc.

Thorn-EMI

J. C. Schumacher Company


IBM Corporation

Pitney Bowes, Inc.

Northern Telecom, Ltd.

Burroughs Corporation



Alan Shepherd Edith Shepherd

C . T. Shih

A. Gary Shilling

Sei Shohara

Art Sidorsky

Robert Silco Dorothy SiIco

Thoma s S i ngman

Brian Sjolseth

James Smith

Stratton Smith

Roger Smullen

Moo-Youl Sohn

Chaney Steinman

John Stewart

Anthea Stratigos

Rahul Sud

Michael Swaluk Lynn Swaluk

Frank Swiatowiec

Dave Sylvester

Kimio Takemori

Hiroo Taniguchi

Sheridan Tatsuno

Lloyd Taylor

Ferranti Electronics Limited

ERSO/ITRI

A. Gary Shilling and Company, Inc.

Xerox Corporation

standard Microsystems Corporation

VLSI Technology, Inc.


IBM Corporation

Harris Corporation

Teradyne, Inc.

Applied Micro Circuits Corporation

Samsung Semiconductor & Telecommiuiicat ions Company, Ltd.

Ketchum Public Relations

GCA Corporation


Lattice Semiconductor Corporation

Pitney Bowes, Inc

Trilogy Systems

San Jose Mercury News

Suwa Seiko Sha

Mitsubishi Electronics America. Inc


Coiranodore I n t e r n a t i o n a l , L td .


Wallace Tchon

James Tempesta

Chuck Thompson Wanda Thompson

Mel Thornsen

M W. Thurlow

Lou Tieber

Jack TiIs

Jim Townsend

Mario Tripputi

Mentor Tseng

Lowel1 Turri ff

Barbara Van

Joe Van Poppelen

James Van Tassel

Robert Vosika

W Scott Walker Cassie Walker

Jan Waluk Dominique Waluk

Xicor, Inc.

Bank of America

Motorola Semiconductor, Inc.


Smith Industries

Interlek, Inc


Toshiba America, I n c .

Italtel Telematica

ERSO/ITRI

Cypress Semiconductor Corporation



NCR Corporation

Micro Component Technology

Hughes Aircraft Company

Megatest Corporation

James Wei

Michael Weisberg

Jeff Wellington

Gunnar Wetlesen Mary Ellen Wetlesen

Rick Whittington

Col in Wiggins

Sharp Electronics Corporation

Prudentlal-Bache Securities

First National Bank of Boston

W & W Enterprises


Exxon Corporation


William Wiley

Ray WiIfinger Mildred Wi Ifinger

Walter Willett

Jack Wi Ison

Otis Wolkins

N. Wood

J. Michael Worfolk

John Wunner

K. K. Yawata

Richard Yeung Paula Yeiuig

Phil Young Cynthia Young

Sam Yoxuig

Jonathan Yu

Tony Yu

Aldo Zana

Robert Zanotti

John Zeigler

Steve Zelencik Harriet Zelencik

Frederick Zieber Libbe Zieber

Bi11 Zubenko

John Zucker


IBM Corporation


Business Week

GTE M i c r o c i r c u its

Lex Service, Inc.

Lex Service, Inc.

Varian Corporation, Exitron Division

NEC E l e c t r o n i c s USA, Inc.

Capital Research Company

The Hibernia Bank

Exel Microelectronics, Inc.

Applied Microcircuits Corporation

United Microelectronics Corporation

Italtel Telematica

Aerospatlale


Advanced Micro Devices, Inc.


DuPont Pension Fund

Mitsubishi Electronics America, Inc.


(:|K\ Dataquest

Dataquest

SEMICONDUCTOR INDUSTRY CONFERENCE October 15 through 17, 1984 San Diego, California

List of Attendees

A. Gary Shilling and Company, Inc. A. Gary Shilling, President

AMP, Inc William Douglass, New Business Development

AT&T Bell Laboratories John Dishman, Head, Technology Planning Department Marshall Gingold, Member of Technical staff Jim Goldey, Director Jeanne Goldey Richard Jacobs, Director, VLSI Design Laboratory

Dan Krupka, Department Head D. A. Mehta, Director, Silicon Processing

AT&T Information Systems Mahmoud Elhamamsy, District Manager Aldo Enrici, Assistant Manager

AT&T Technologies, Inc Thomas Mino, Manager, Engineering Rick Morrison, Business Systems Specialist

Gerald Ramsey, Material Management Manager

Acrian, Inc. J . Harris, President & Chief Executive Officer

Adler & Company Dau O'Neill, Associate

Advanced Micro Devices. Inc John East, Vice President, Bipolar Division Steve Zelencik, Senior Vice President Sales & Marketing

Harriet Zelencik

Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Parl< Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973

Aerospatiale Robert Zanotti

Aetna Life and Casualty Bob Lee, Investment Officer Donna Lee

Air Products & Chemicals, Inc. Sen Chen, Marketing Manager Burt Lancaster, Semiconductor Industry Manager Paul Lovett, Corporate Planner Anne Lovett

Applied Materials, Inc Thomas Bowman, Director, Strategic Marketing

Applied Micro Circuits Corporation Roger Smullen, President &c. Chief Executive Officer Jonathan Yu, Chief Operating Officer

Arrow Electronics John Abram, Executive Vice President

Arthur Yoxmg & Company Roger Dunbar, Partner

Assisted Technology Bill Sams, Vice President, Marketing & Sales

Atari Corporation Donald Richard, Vice President

Atcor Corporation Juan Bardina, Vice President Patricia Bardina Robert Bickers, President & Chief Operating Officer

Richard Lawry, Director Christine Lawry

BA Investment Management Corporation Rupert GriitHn, Vice President


Bank of America Timothy Bottoms, Group Vice President, High Technology

William Creamer, Vice President, High Technology Judy Sanchez, Vice President, C o r p o r a t e Banking James Tempesta, Assistant Vice President, High Technology

Bank of New York Patricia Melaugh, Investment Officer

Bank of the West Shelley Anderson, Vice President Eric Jones, Corporate Banking Officer

Bessemer Venture Partners Neill Brownstein, Partner


Burroughs Corporation

Kenneth Giles, Vice President of Finance Sara Giles

Jerry Shames, General Manager, CEPO

Business Week Jack Wi Ison

California Devices, Inc, Bob Lipp, Chief Technical Officer Jaime Martin. Strategic Marketing Manager

Calma Company Robert Kuhling, Director Marketing & Market Development

Capital Research Company Jim Martin, Senior Vice President Diane Martin Richard Yeung, Vice President Paula Yeung

Citibank Jay Hoag, Senior Research Officer


Cognos Associates Dr. Judy Larsen, President

Commodore International, Ltd. Adam Chowaniec, Vice President, Technology Lloyd Taylor, Assistant Vice President of Technology

Custom Silicon, Inc. Dr. Albert Belle Isle, President

Cypress Semiconductor Corporation T. J. Rodgers, President Kathleen Rodgers Lowell Turriff, Vice President & Marketing

Sales

Daisy Systems Corporation Aryeh Finegold, President

Data General Corporation


Richard Douglas, Product Manager Peter Roche, Senior Marketing Specialist

Gary Cowles, Senior Manager, Electronic Corporate Contracts

Brian Fullmer, Director, Purchasing

Dataquest Incorporated Carol Bender, Marketing Support Representa t ive

Betty Bluford, Administrative Assistant

Howard Bogert, Vice President & . Director, Semiconductor Industry Service

Carol Bogert Stan Bruederle, Vice President Sc Director, Semiconductor User Industry Service

Patricia Cox, Research Analyst Ardan DeVincenzi, Research Analyst Bea Destin, Secretary Tom Dexel, Marketing Manager Frank Florence, Marketing Manager Karen Foley, Project Manager Penny Gal legos. Research Librarian


Dataquest Inco rpo ra ted Katy Guill, Research Associate Iza Hallberg. Research Analyst Mike Hankal, A s s o c i a t e D i r e c t o r , Financial Services Program

John Jackson, Marketing Manager Gail Kel ton -Fogg, Industry Analyst Lane Mason, Senior Industry Analyst Rober t McGeary, S e n i o r Industry Analyst Ken McKenzie, Associate D i rec to r Debra McKenzie Alicia Morehouse, Client Care

Coordinator James Newcomb, Vice President & Director, CAD/CAM Industry Service

Gene N o r r e t t , Vice President & Director, Japanese Semiconductor Industry Service

Mary Olsson, Research Analyst Jean Page, Industry Analyst Malcolm Penn, Vice President & Director European Semiconductory Industry Service

Gill Penn Andy Prophet, Senior Industy Analyst Janet Rey, Research Associate Jim Riley, Senior Vice President, Seminconductor Industry Service

Frank Sammann, Senior Vice President, Sales

Nancy Sammann Susan Scibetta, Consultant Anthea Stratigos, Research Associate Sheridan Tatsuno, Research Analyst Mel Thomsen, Senior Industry Analyst Barbara Van, Research Analyst Frederick Zieber, Senior Vice President, Semiconductor Group Libbe Zieber

Department of Trade and Industry Dr Ron Love 1 and

Dexter Corporation—Hysol Division Larry Baxter, Manager

International Marketing

Diel i Christine Ragoucy


Digital Equipment Corporation Prakash Bhalerao, Custom Engineering Group Manager

Ken Brabitz, Planning Manager, LSI Group

Kevin Driscoll, Controller, Finance Manager Beverly Feldman, Product Manager P e t e r Masucci, Marketing Manager

Dimos AG Willi Bacher, President

DuPont Pension Fund Terry Lancaster, Vice President Bill Zubenko, Security Analyst

Dynami t Nobel Silicon, Inc Tom Schauf, Marketing Manager

ERSO/ITRI Wade Chang, Marketing Manager C. T. Shih, Design Manager Mentor Tseng, Marketing Planner

ESEC USA, Inc Hans Kurner. Vice President

Eastman Kodak Company Dwight Johnson, Program Manager, Electronic Design

Eaton Corporation Harvey Frye, Director, Sales Administration & National Accounts

Daniel Reeves, District Sales Manager, Southern California

Electric Power Research Institute John Cunanings, Director, Renewable Resource Systems Department

Environmental Processing, Inc Phillip Drayer, President & Chief Operating Officer

Exel Microelectronics, Inc. Sam Young, Director of Marketing


Exmos Semiconductor Co rpo r a t ion G. Mart Kernahan, Chairman of the Board

Elaine Kernahan

Exxon Corporation Colin Wiggins, Portfolio Manager


Donald B r o o k s , Executive Vice President Teresa Brooks Peyton Cole, Strategic Communications Manager, NAS Erick Hagmann, Strategic Marketing Manager Chris Newham, Strategic Plarming Manager, NAS

Michael Pawlik, Marketing Manager Martin Plotkin, Marketing Director

Ferranti Electronics Limited Alan Shepherd, Managing Director Edith Shepherd

Fiat Semelco Giuseppe Anerdi, Purchasing Manager

First Interstate Bank Kathryn Plumb, Assistant Vice President Edwin Sauve', Vice President Wi11iam Wiley, Vice President and Manager

First National Bank of Boston David Garnitz, Loan Officer Jeff Wellington, Loan Officer

GBL/Goold Electronics Corporation Oliver Goold, President

GCA Corporation Paul Reagan, Senior Vice President John Stewart, Vice President, Integrated Circuits Systems Group

GTE Microcircui ts Fran Krch, Manager , Strategic Planning Otis Wolkins, President


General Electric Company Jeffrey Ehrlich, Manager, Product Application Technology James Poitras, Manager, Business Development John Zeigler, Contracting Agent

G e n e r a l Electric Trust Investment Marshall Kidd, Manager, Technical Analysis

Hami1ton/Avnet

Harris Corporation

Colman Daniel, Vice President

Jon Cornell, Senior Vice President & Sector Executive

Mary Cornel 1 Linda Fredericks, D i r e c t o r of Marketing Communicat ions

Michael Graff, Vice President, Marketing, Semiconductor Division James Smith, Vice President

Hewlett-Packard Company Jack Nilsson, Marketing Engineer Robert Santos, Product Marketing Manager

Midge Santos

Hitachi America, Ltd. Richard English, S e n i o r Area Manager

Hi tachi, Ltd H i s a o Kanamaru, Department Manager, Marketing Sc Planning Department

Holt, Inc Mark Ellsberry, Director of Marketing

Honeywell ISI, S p a . Giovanni Pagliosa

Honejnurel 1 , Inc . Bill O'Byrne, Commodity Manager

Hoya Corporation, Electronics Division

George LeCreim, Marketing Manager


Hughes Aircraft Company Paul Hart, Manager, Custom LSI Procurement

W. Scott Walker, Group Vice President & Manager, Solid State- Products Division

Cassie Walker

Hyundai Electronics America Yong Lee, Vice President, General Manager, Semiconductor Operations Andrew Procassini, Vice President, Market ing

IBM Corporation Irv Abzug, Vice President & Director, Corporate Component Procurement

Harriet Abzug Jet Advani, Advisory Engineer Michael Denick, Manager, New Products Office

Edward Desmond, Manager, Industrial Engineering Services

Mark Desrosiers, Staff Programmer Basil Harrison, Advisory Engineer Bob Hoffman, Senior Buyer Annmarie Ihle, Buyer Edward Linde, Senior Engineer John Melgalvis, Industrial Engineer Richard Orrill, Senior Engineer Gerald Parker, Program Manager, Process

Technology John Raszcewski, Advisory Engineer Dave Royse, Analyst Robert Rusnack, Advisory Enginee'-E. Weston Seaman, Manager, New Products Cost Engineering

Betsey Seaman Brian Sjolseth, Advisor Plaimer Ray Wilfinger, Prograun Manager Mildred Wilfinger

IDA Ireland Brendan Halpin, Regional Director


INMOS Corporation larui Barron, Chief Strategic O f f i c e r A. C. D'Augustine, Vice President, Marketing Pete Fowler, Marke t ing Manager John Heightley, Chief Operating Officer Dennis Parker, Group Controller Richard Petritz, Chairman Grace Petritz

ITT Semiconductors Del Brand, Director of Marketing & Sales Julie Brand

Indium Corporation of America Robert Bullock, Senior Vice Presiden' Joan Bui lock

Ing. C. 01ivetti & C., S.p.A.

Intel Corporation

Max Be r t o1i no-Zan Tito Conti, Director of Quality, Corporate Staff

Enzo Rognoni

Jack Carsten, Senior Vice President & General Manager

Doug Finke, Product Marketing Engineer Mark Norwood, Components, Strategic staff Manager

Interconics C. Fred Little, Market Development Manager Betsy Little

Interlek, Inc . Josh Camba, Senior Vice President, Finance

Miriam Ceunba Vic Chuidian. President & Chief Executive Officer Joanne Chuidian Antonio Garcia, Chairman of the Board Carolyn Garcia Dave Jones, Vice President, Test International Division

Joe Marcello, Special Assistant to Chairman for Corporate Development

Betty Marcello Nand Prasad, Executive Vice President George Robertson, Vice President, Sales Lou Tieber, Vice President, Sales


International CMOS Technology Drew Osterman, President

Internat ional Microelectronic Products

Michael Ho l l abaugh , Marketing Manager Debbie Hollabaugh

Intersi1, Inc. Paul Gupta, Vice President, O p e r a t i o n s Jerry Kiachian, Vice President, Applicat ions

Investors in Industry Fred Haney, Principal Barbara Haney Anna Henery, Principal

Italtel Telematica Marisa Bellisario, President Gianni Bertolini, Director of Corporate Procurement

Emilio Dragoni, Manager Mario Tripputi, Manager Aldo Zana, Director of External Relations

J C. Schumacher Company John Schumacher, President

J. H. Whitney & Company Harry Marshall, Partner

Japan Electronics Bureau Andrew Koshar

KLA Instruments, Inc. Kenneth Levy, President Gloria Levy

Ketchum Public Relations Jennifer Hughes Chaney Steinman, Vice President &

D i r e c t o r of Research

LM Ericsson Corporation Ola Eckholm, Chief Component Engineer

Dataquest Incorporated, A Subsidiary of AC. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973

LSI Logic Corporation Perry Constantine, Vice President, North America Marketing

Wilford Corrigan, President Sigriui Corrigan John Shea, Director, Military Technology

Flor Shea

LTX Corporation Adrian Hohn, Vice President Graham Mi 1ler, President Geoff Rowett, Vice President, European Operat ions

Lattice Semiconductor Corporation Rahul Sud, President & Chief Executive Officer

Lehman Management Company Larry Phillips, .Analyst

Lex Service, Inc. Milton Grannatt, III, Vice President Planning-Supplier Development

Gary Kibblewhite, Planning Manager N. Wood J. Michael Worfolk, Vice President, Business Development

MOS Electronics Corporation (MOSEL) C. "Kip" Broym, Director, Custom Circui ts

McDonnell Douglas Microelectronics John Hayn, Manager of Applications Engineering

Megatest Corporation Jan Waluk, Sales Manager, Major Accounts Dominique Waluk

Messerschmitt-Boelkow-Blohm GmbH Edgar Anderson, Manager, Marketing Sc Sales, Electronics Products

Holger Bree


Micro Component Technology Terry Bell, General Manager, Test Systems Division

Robert Vosika, Vice President

Microlinear Corporation Alan Grebene, President Norman Miller, Executive Vice President

Micromos Dr. Vir Dhaka, Chairman & Chief Executive Officer

Mitsubishi Electric C o r p o r a t i o n Jack Christy, Regional Sales Manager

Mitsubishi Electronics America, Inc Azmat Malik, Product Marketing Manager Hiroo Taniguchi, Executive Vice President Sc General Manager John Zucker, National Sales Director

Mitsui High-Tek, Inc

Modular Semiconductor, Inc

Satoshi Nagata, Director & Executive Planner

N. Damodar Reddy, President

Monolithic Memories John Birkner, Manager of PALs, Product Planning Department Timothy Propeck, Vice President, Market ing

Monsanto Electronic Material Company Hubert Dohman, Vict President, Quality Assurance

Martha Dohman Wendy Grossmen, Technical Analyst Elizabeth Isaacs, Manager, Product Educat ion

Morgan Guaranty Trust Charles Kimball, Vice President Investment Research Department


Mostek Corporation Lee Chu, Director, Industry Marketing Sadar Haddad, Strategy Analyst Bert Kehren, Director, Strategic Planning

Robert Palmer, Executive Vice President, Semiconductor Operations

Motorola Semiconductor, Inc Chuck Thompson, Vice President & Director, Worldwide Marketing

Wanda Thompson

Motorola, Inc, Erick Ayers, Assistant Strategic Manager Edward Day, Strategic Planning Manager Oliver Edwards, Manager, Marketing Planning

Bob Gonzalez, Japanese Analyst Bob Jenkins, Vice President Carolee Jenkins

Mullard, Ltd.

Mutual of New York

William Everden, Divisional Director, Industrial Division

Anthony Blenk, Technology Analyst

NCR Corporation James Van Tassel, Vice President Microelectronics Division

NEC Electronics USA. Inc Frank Jelenko, Vice President, Marketing James Kelley, Vice President, Technology Center

Ed Neubauer, Vice President, Marketing & Sales K. K. Yawata, President

National Electronic Distributors Associat ion

Toby Mack, Executive Vice President

National Semiconductor Corporation Douglas Ritchie, Vice President, Consumer Specific Products Joe Van Poppelen, Vice President Market ing


Naval Postgraduate School Herschel Loomis, Electrical Engineer

Northern Telecom Electronics, Ltd. E. Dennis Colbourne, Assistant Vice President, Semiconductor Operations

A. Graham Sadler, Vice President, Semiconductor Operations

Northern Telecom, Ltd. G. Wi1liam Bothwel1, Director, Materials and Purchasing Patricia Bothwel1 Monte Seifers, Director, Semiconductor Sales

Oki Semiconductor Jerry Crowley, President &c Chief Executive Officer

Nancie Crowley

Panatech Semiconductor John Baskett, President

Perkin-Elmer Corporation Henry Dieselman, Manager, Plarming Carl Hildebrand, Vice President, Sales Service, Semiconductor Equipment Group

Gail Hildebrand

Philip A. Hunt Chemical Corporation Peter Danna, Vice President, New Business Lorraine Danna Jim Favier, Vice President, Microelectronics Jack Murphy, Director of Sales

Pitney Bowes, Inc. Frank Seestrom, Director, Programs Joann Seestrom Michael Swaluk, Manager, Electronic Support

Lynn Swaluk

Plessey Solid State Dennis Chant, President


Prudential-Bache Securities George Bristol, Managing Director Tom Gettinger, Research Analyst Richard Klein, Vice President Michael Weisberg, Director of Technology Research

Rick Whittington, Vice President

Quality Au tomat ion , Inc. Mike Leibowitz, President

RCA Corporation Herbert Criscito, Vice President, Marketing Robert Lenz, Administrator, Sales Analysis

Richard Santilli, Vice President. Market Development

Raytheon Corporation Randy Marshall, Director, International Marketing

Rhone-Poulenc Jacques Biais, Manager, Electronic Materials Group

Robert Bosch GmbH Gunter Matthai, Manager, Technology Plarming Paula Matthai

Rockwell International Corporation C. V -Kovac, Vice President, Key Accoiuits

Rosenberg Capital Management Walter Price, Partner

S-MOS Systems, Inc. Dan Hauer, President

S.E.H. America John Ma t lock, Vice President, Technology

SAI-SEMI Specialists Bob Ball, Vice President, Marketing Abe Kosakowsky, Marketing Manager Jack Tils, Semiconductor Marketing Manager


Sag em Jean Paul Neuville

Samsung Semiconductor & Telecommiuii cat ions Company, Ltd.

Moo-Youl Sohn, Planning Manager

San Jose Mercury News Dave Sylvester, Business Writer

Schweber Electronics, Inc Richard Jacobs, Director of Strategic Plaiuiing

Scottish Development Agency Cameron McPhai1, Development

Sears Investment Management Company Stephen Dexter, Investment Analyst

Security Pacific Capital Corporation Dmitry Bosky, Investment Officier James McElwee, Vice President

Semiconductor Microelectronics Internallonal

Joseph Curry, Consultant

Sharp Electronics Corporation James Wei, National Marketing Manager

Shinko Electric America Bill Cruizkshank, Executive Vice President

Donna Cruizkshank

Shinko Electric Industries Company, Ltd.

Taizo Abe, Director, Engineering Department

Shipley Company, Inc Gene Goebel, Director of Sales Mic roe lec t ron i c Products

Sierra Semiconductor Corporation James Diller, President June Diller Thomas Reynolds, Vice President, Marketing Sc Sales

Maryanne Reynolds

Dataquest incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973

Signetics Corporation Marilyn Kissel, Senior Financial Analyst

Silicon Systems, Inc. James Peterson, Director of Marketing

Smith Industries M. W. Thurlow

stack GmbH Bernard Hadley, Managing Director

standard Microsystems C o r p o r a t i o n Art Sidorsky, Executive Vice President

Stanford University Everett Rogers, Professor-Institute for Coranuni cat i ons

storm. Block <Sc Associates Randy Block, General Partner

Suwa Seiko Sha Kimio Takemori

Synertek, Inc R i c h a r d Konrad, Vice President, Marketing & Sales

Telic-Alcatel Joseph Heitz, Engineer, Purchasing Department

TRW. Inc Ralph Miller, Vice President & General Manager

Tandem Computers, Inc Tom Collins, Development Engineering Manager Susan Col 1 ins

Telettra S.p.A Franco Carnevali

Teme seal Daniel Devine, Director of Marketing


Teradyne, Inc. Abe Bluestone, Product Manager Ron Butler, Purchasing Manager Donald Hamman, Controller Stratton Smith, Director of Purchasing

Texas Instruments, Inc. Randall Peters, Manager Strategic Planning

Charles Phipps, Vice President, Semiconductor Group

The Hihernia Bank Phil Yoimg, Senior Vice President Cynthia Young

The Wall Street Journal Dick Schaeffer, Technology Editor

Thorn-EMl John Scholes, Corporate Planning Execut ive

Toshiba America, Inc Jay Litus, Jr., Director of Marketing Jim Townsend, Strategic Marketing Manager

Trilogy Systems Pete Bejarano, Director Frank Swiatowiec, Director

Tristar Semiconductor, Inc S. Ham, Vice President, Chief of Staff Sang Lee, President Een Yearp Lee

Union Carbide Corporation Anthony Keig, Business Research Manager Thomas Nelson, Manager, Electronics AppIicat ions

Thomas Singman, Manager, Marketing P1ann i ng

Walter Willett, Manager, On Site Sales

United Microelectronics Corporation Tony Yu, Manager, U.S. Operations

United States Department of Commerce Robert Eckelmann, Industry Analyst


United Technologies Corporation Richard Dressier, Deputy Director, Financial Planning & Analysis

VHSIC Technology Corporation Tom Hendrickson, President John Hodgson, Vice President

VLSI Technology, Inc Henri Jarrat, President & Chief Executive Officer

Robert Silco, Director, Corporate Market ing Dorothy SiIco

Varian Associates William Bottoms, President

Varian Corporation, Exitron Division

John Wunner, Marketing Manager

Videolog

Vitelic Corporation

Alan Brigish, President

Alex Au, President & Chief Executive Off icer Jack Ordway, Vice President, Marketing & Sales

W & W Enterprises Gunnar Wetlesen, President Mary Ellen Wetlesen

Wacker Siltronic Corporation Werner Freiesleben, President Vern Meissner, Director of Marketing Dolores Meissner Malcolm Russ, Executive Vice President

Wells Electronics, Inc Arthur Midili, President

Western Digital Corporation Kathy Braun, Director, Storage Management Marketing Dieter Marenbach, Strategic Planner


Western Microtechnology Bernard Marren, President & Director

XTAR E l e c t r o n i c s, Inc Skip Powe r s , Chief Executive Officer

Xerox Corporation Charles Holt, Vice President Sei Shohara, Manager, Technical Staff

Xicor, Inc Wallace Tchon, Vice President strategic Planning

Zilog, Inc. Carl Johnson, Manager, Technical Marketing Tom Popek, Senior Vice President & General Manager, Components Division

ZyMOS Corporation

Zytrex Corporation

Jerry Gibbs, Marketing Director Dave Guzeman, Vice President, Marketing & Sales . Alan Louwerse, Executive Vice President

Orlando Gal legos. Senior Director of Market ing

Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 RIdder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973

:^T^Datac|iiest

CT^v^ '"*' E>ataquest CLIENT

SEMICONDUCTOR INDUSTRY SERVICE

ADC Corporation AMI-Austria AT&T AT&T Bell Laboratories AT&T Conununications AT&T Consumer Products AT&T Resource Management AT&T Technologies, Inc. Accutest Adler & Co. Advanced Micro Devices, Inc. Aerospatiale Air Products and Chemicals, Inc. American Microsystems, Inc. Analog Devices BV Ando Electric Co., Ltd. Applied Intelligent Systems, Inc. Applied Materials, inc. Applied Micro Circuits Corporation Arrow Electronics, Inc. Arthur Andersen & Company Arthur Young & Company Asahi Chemical Industry Co., Ltd. Assisted Technology, Inc. Atari, Incorporated BMC Industries, Inc. BSR International BULL Transac Bank of America Banlc of California Bank of the West Banque Nationale de Paris Borg Warner Chemicals British Technology Group Burroughs Corporation CIN Industrial Finance Ltd. CIT-Alcatel CMOS Technology, Inc. California Devices, Inc.

California First Bank Calma Company Canon, Inc. Chase Manhattan Bank Churchill international Cii Honeywell Bull Con^uter Sciences Corporation Crocker Bank (The) Custom Microelectronics Assembly, Inc. D.G.S.I. D.I.E.L.I. DWS Deutschen Gesellschaft fur Wertpapiersparen Daleco Research & Development, Inc. Data General Corporation Datapoint Corporation Department of industry UK Dexter Corporation/Hysol Division Digital Equipment Corporation DOW Chemical Dynamit Nobel Silicon, Inc. E.I. DuPont de Nemours & Co., Inc. BRSO Eastunan Kodak Company Eaton Corporation Electric Power Research institute (EPRI) Electronics Industry Association of Japan Emerson Electric Co. Environmental Processing Ericsson Information Systems AB Eurotechnique Exel Microelectronics, inc. Pairchild Camera & Instrument Co. Fairchild Semiconducteur Europe S.A. Fairchild Memory Test Systems Fairchild Research Fairchild Semiconductor Fairchild Test Systems Group Fairchild/Schlumberger Ferranti Computer Systems, Ltd.


Ferranti Electronics, Ltd. Finalco

Firs t In te r s ta te Bank of California F i r s t In te r s ta te Bank of Oregon Firs t In t e r s t a t e Capital Inc. F i rs t National Bank of Boston Four-Phase Systems, Inc. Fujitsu Microelectronics, Inc. Fujitsu Limited GCA Corporation GTE Microcircuits GTE-Network Systems, Inc. GenRad, Inc. General Electric Company General Electric Company, Ltd. General Instrument Corporation General Instruments International, Ltd. General Motors Corporation Gold Star Semiconductor, Ltd. Gould/Biomation Inc. Harris Corporation Hewlett-Packard Company Hitachi America, Ltd. Hitachi Electronic Components Europe GmbH Hitachi, Ltd. Holt, Inc. Honeywell, Inc. Hoya Corporation, Electronics Division Hughes Aircraft Company IBM Compec IBM Corporation IBM France IBM Japan, Ltd. IBM Oesterreich IBM UK, Ltd. ICG Electronics Enterprises IDA Ireland ITT Advanced Technology Center ITT Europe ITT Intermetall GmbH ITT Semiconductors Idemitsu Petrochemical Co., Ltd. Imperial Chemical Industry (ICI) Indium Corporation of America Ing. C. Olivetti & C , S.p.A. Inmos Corporation Inmos, Ltd. Institutional Venture Partners Integrated Device Technology Intel Corporation Intel International Corp. S.A. InterWest Partners Interlek. Inc. International Microelectronic Products, Inc. Intersil, Inc.

investors in industry Investors in industry Group PLC Itau Technologia S.A. J. H. Whitney & Co. Japan Electronics Bureau Jardine Flemings, Ltd. Kaiser Electronics Kanematsu-Gosho (USA) LSI Logic Corporation LTX Corporation La Telephonie Industrtelle et Commerciale (Telic)

Landmarks Group (The) Lattice Semiconductors Lex Service, inc. Linear Technology Corp. LOS Alamos National Laboratories MBB GmbH Marconi Electronic Devices, Ltd. Matra Harris Semiconducteurs Matrix Partners, L.P. Mayfield Fund McDonnell Douglas Microelectronics Megatest Corporation Merrill, Pickard, Anderson & Eyre Micro Component Technology, Inc. Micro Power Systems, Inc. Microelectronic Marin Microelectronics Technology Company Micromos, inc. Ministerio de Industria Y Energia Mitsubishi Corporation Mitsubishi Electric Corporation Mitsubishi Electronics America, Inc. Miyazaki Oki Electric Industry Co., Ltd. Modern Electrosystems, Inc. Modular Semiconductor, Inc. Monolithic Memories, Inc. Monsanto Electric Materials Company Mosley Management Corporation Mostek Corporation Mostek Japan K.K. Motorola Semiconductor Europe Motorola, Inc. Mullard, Ltd. Murray Electronics PLC NCR Corporation NEC Corporation NEC Electronics USA, Inc. Narumi China Corporation National Bureau of Standards National Economic Development Office (NEIXD) National Semiconductor Corporation Nissan Motor Co., Ltd. Northern Telecom, Ltd.

Oak Management Corporation Oki Electric industry Co., Ltd. Oki Semiconductor, Inc. Oxcal Venture Corp. Oxford Venture Corp. Perkin-Elmer Corporation Philip A. Hunt Chemical Corporation Philips International BV Pioneer-Standard Electronics, inc. Pitney Bowes, Inc. Plessey Semiconductors Ltd. Plessey Solid.State Prime Capital Management Co., Inc. QCAD Quality Automation Quasel, Inc. Qume Corporation RCA Corporation RTC la Radiotechnique-Compdec Raytheon Data Systems Rhone Poulenc,Siltec Ricoh Systems, inc. Robert Bosch GmbH Rockwell International Corporation S.A.M.E.S., Ltd. S.E.H. America, Inc. S A Matra SAI-SEMI Specialists SEEQ Technology, Inc. SGS Semiconductor Corporation SGS-ATES STACK GmbH STC Semiconductors Ltd. Sagem Scottish Development Agency Security Pacific Capital Corp. Sharp Electronics Corporation Shin-Etsu Handotai Co., Ltd. Shinko Electric Industries Co., Ltd. Siemens AG Siemens Corporation Sierra Semiconductor Corp. Signetics Corporation Solid State Scientific, Inc. Sony Corporation Standard Microsystems Corporation Stet Societa Finanziaria Telefonica S.p.A. Supertex, Inc. Suwa Seikosha Co., Ltd. Synertek, Inc. TRW Active Components Tachibana Co., Ltd. Takeda Riken, Ltd. Takeda Systems, Inc. Tandem Computers, Inc.

Targetronix Tegal Corporation Tektronix, inc. Telefunkeh Electronic GmbH Temescal Teradyne, Inc. Texas Instruments, Inc. The Ericsson Corporation Thomson CSP Thomson EFCIS Thorn-EMI Toshiba America, Inc. Toshiba Corporation Toshiba Europe (I.E.) GmbH Toshiba Semiconductor (USA), Inc. Tristar Semiconductor, inc. U.S. Departiment of Commerce UTI Instruments Company Union Bank Union Carbide Corporation Union Trust Company of Maryland Union Venture Corporation United Micro^electronics Corp. United Technologies Corporation Unitrode Corporation VLSI Technology, Inc. Varian Associates Vitelic Corporation Wacker Chemitronic GmbH Wacker Siltronic Corporation Weitek Western Digital Corporation Wyle Laboratories XTAR Electronics, Inc. Xerox Corporation Xicor, Incorporated Yamada Seisakusho Co., Ltd. Zilog, Inc. ZyMOS Corporation Zytrex Corporation

06/28/84

Dataquest

Dataquest

SEMICONDUCTOR INDUSTRY CONFERENCE SPEAKERS

Frederick L. Zieber Senior Vice President Dataquest Incorporated

Chuck Thompson Vice President Director, World Wide Mktg. Motorola Semi Sector

Jim Riley Senior Vice President Dataquest Incorporated

John C. East Vice President Bipolar Division Advanced Micro Devices

Charles H. Phipps Vice President, Semiconductor Group Manager, Market Development Texas Instruments Incorporated

Doug Ritchie Vice President Consumer Specific Products National Semiconductor Corp.

Roger Smullen President and CEO Applied Micro Circuits Corp.

Henri Jarrat President Chief Operating Officer VLSI Technology

Jon Cornell Senior Vice President and Sector Executive Harris Semiconductor

A. Gary Shilling President A. Gary Schilling & Co.

John Abram Executive Vice President Arrow Electronics

Jerry Crowley President and CEO Oki Seiconductor

Ken McKenzie Associate Director Semiconductor Group Dataquest Incorporated

T. J. Rodgers President Cypress Semiconductor

Professor Everett M. Rogers Institute for Communications Stanford University

Judy Larsen, Ph. D. President Cognos Associated

Bill Bottoms President Semiconductor Equipment Division Varian Associates

Wilfred J. Corrigan President and CEO LSI Logic

Marisa Bellisario Managing Director, and Chief Executive Officer Italtel Group

Malcolm Penn Director Dataquest U. K. Ltd.

Aryeh Finegold President Daisy Systems

Jack Carsten Senior Vice President and General Manager Intel Corporation

Dataquest incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive /San Jose, CA 95131 / (408) 971-9000 / Telex 171973

Dataquest

SEMICONDUCTOR OUTLOOK—SOFT LANDING OR HARD

Frederick L. Zieber Senior Vice President and

Director of the Semiconductor Group Dataquest Incorporated

Mr. Zieber is a Senior Vice President of DATAQUEST Incorporated, a member of its Executive Committee, and the Director of its Semiconductor Group. He has 13 years of experience in market research and consulting to the semiconductor industry, and previously had 9 years of experience working in the semiconductor industry. He has experience in integrated circuit and discrete device processing, design, manufacture, and testing. He holds two patents in semiconductor processing. Mr. Zieber has a B.S. degree in Electrical Engineering from Stanford University, and an M.B.A. degree from the Graduate School of Business at Stanford university.

Dataquest Incorporated SEMICONDUCTOR INDUSTRY CONFERENCE

October 15, 16, and 17, 1984 San Diego, California


SEMICONDUCTOR OUTLOOK SOFT LANDING OR HARD

The last nine years it has fallen upon me to present the DATAQUEST forecast of semiconductor demand. Our forecasting has not always been perfect, (those who live by the crystal ball learn to eat ground glass sooner or later), but our record has generally been excellent. I believe this year is the most difficult situation I have faced. There has been some dark clouds on the horizon that have moved perceptively closer.

Lets look at what's been happening recently. For the last two years semiconductor output has increased tremendously. This chart gives semiconductor shipments into the United States, by quarter, for 1983 and 1984. Two years ago at this conference we forecast that demand would pick up strongly by April 1983. That is exactly what happened. Since then shipments have grown at a tremendous rate. Currently shipments are nearly double the rate of the first quarter of 1983. This unprecedented rate of growth over the last year and a half was spurred by the economy and Other market factors. Demand was extremely strong.

More recently, order rates have been declining. With shipments increasing, the book-to-bill ratio has been falling steadily and inexorably all year long. Although this chart was made several weeks ago, we expected the book-to-bill ratio for September to be less than one. This is what's happened. For the last three months, shipments have exceeded orders. Any of us who have been in the industry long enough have seen this pattern before, usually as the prelude to a full-fledged, extremely painful, industry recession. What is the outlook of the rest Of 1984 in 1985?

Let's look at what is happening at the semiconductor users. Very recently, over the past two or three months, there has been a rapid inventory build up. This is nowhere near the magnitude of 1980 or 1974, but excess inventory is excess inventory. Users of semiconductors have seen a slower rate of increase in their own orders. The euphoric expectations of earlier in the year have come face to face with a less buoyant economy and reality. Most systems companies are facing the future with lower expectations than they had several months earlier. This affects their order rates for semiconductors. Semiconductor usage rates are not as expected, the future usage rates are lower, and increasing inventories mandate adjustment of order rates. Additionally, there has been several disasters among systems companies. There has been a tremendous increase in new companies in many market areas each with high expectations of major market share. It is inevitable that the

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C, 1984 .Dataquest.Incorporated Oct. 15 ed.-Reproduction Prohibited Dataquest Incorporated, A SubsIdIary or A.c: NIeTsen CoTnpany /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973

attrition rate of companies will be high, and it will probably get higher. Naturally, all this affects the availability of components. Semiconductors suddenly are much more easily obtained. Furthermore, component lead times have been decreasing rapidly. Prices are weakening. With this scenario, why order?

At the semiconductor manufacturer a related scenario is unfolding. There has been a tremendous increase in capacity in the semiconductor industry over the last several quarters. Much more than generally expected. In the past, when we have come out of a period of excess capacity, increases in semiconductor shipments have been extremely rapid for two quarters. We have had quarter to quarter increases in double digits in excess of ten percent, for six quarters. Clearly the semiconductor industry has been doing something different this time around. We believe part of the reason has been a major increase in the number of shifts operated at wafer fabrication facilities. Facilities and equipment utilization is higher than ever before. At the same time, manufacturers are experiencing level or declining bookings. Lead time for products have been going down, and pressure on prices has been getting worse. This has an all too familiar ring to it. But don't panic. We do not believe we are entering a recession. However, DATAQUEST believes that we have entered a period of adjustment where the excesses of the recent past will be brought into line.

This adjustment is a normal process. Usually, we see it when the U.S. economy is entering a recession. This time, I think, we have a different scenario: the adjustment, the excess, this process is occuring even though the economy is not in a recession and real demand for semiconductors, unit demand, is still growing. For those of you who haven't been in the industry as long as I have, this has happened before. It happened to a certain extent in 1978 and to a much greater extent in 1967. It has happened for individual product lines from time to time.

What is this process? Basically it is the process whereby prices, production, inventories, and demand are brought into line. It goes like this; rapidly increasing semiconductor shipments lead to a build up in semiconductor inventory at the systems level. This inventory can be parts, in devices that are embedded in sytems, at distributors, or elsewhere. When this happens, semiconductor users, particuliary if their expectations have been lowered, adjust their semiconductor order rates down. They do this to bring inventory down or to stop it from growing. Thus semiconductor manufacturers see bookings decline. But shipments continue to rise (in the early stages), and semiconductor lead times come back. The backlogs of the semiconductor manufacturers go down. The inevitable price pressure increases, prices weaken. Now, when lead times come back, the users don't have to order so far in advance. And being rational people, noticing that prices are weakening, they tend to hold orders off. Bookings drop even more. Sometimes, a lot more.

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O 1984 Dataquest Incorporated Oct. 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

The semiconductor industry reacts. Increases in shipments of semiconductors begins to slow. In a recession, this can continue for quite a while. But as long as the economy is stable and growing unit demand for semiconductors will also grow. (In this case we are speaking about real usage, not inventory building). Therefore, eventually, bookings will begin to rise. This is the process. Right now we are at Number Five.

Critical to this process is the state of economy. Tonight we have a talk by Gary Shilling on the economy. Not being an economist, I will defer to him, but I do wish to make a few observations concerning DATAQUEST's assumptions on the economy, because they affect our forecast. First of all, we believe the economy is slowing. Recently the index of leading indicators has been mixed, housing starts have been down, and retail sales have been down, and these events generally presage a slow down of the economy. On the other hand, we don't believe a recession is imminent. A recession is often the result of the tighting of the money supply to cool an overheated economy. While we have a strong economy, we don't have an overheated one at this time. Two of the things that are generally in evidence prior to an economic downturn are a strong jump in the prime rate and a decline in the real money supply. This chart shows what happened in the twelve months prior to the last three recessions. I think it is interesting to note that for each of these the increase in consumer prices was as high or higher than the prime rate during that period. In 1984 just the opposite is true. We have high interest rates and relatively minor increases in consumer prices. Simply put; there is no reason to dump the economy. Therefore, we operate under the assumptions that economic growth may slow but a recession will not occur.

But, we are faced with reality: The process described earlier. A book-to-bill under one, is a matter of concern. The book-to-bill ratio can be much much lower. This chart gives the book-to-bill ratio for Texas Instruments (simply because it was available) and for the SIA in 1980. Since the TI ratio is for the whole company, we estimated what the semiconductor industry book-to-bill probably was in 1970 and 1974. For three months they were around 0.5 or lower. Personally, I can remember individual months when the book-to-bill ratio for individual companies was as low as 0.2, other people can remember negative book-to-bills: that is, when the cancellations of old orders exceeded new orders.

We believe that real demand is still growing. The economy is in a phase with capital spending by industry increasing. Capital spending is the prime driving force of semiconductor demand. increasing industrial production leads to industry increasing capacity. This is done, in part, through the purchase and use of computers, workstations, industrial automation, instrumentation, etc. In combination with the increasing pervasiveness of semiconductors in (electronic) capital equipment of all types, the increasing capital expenditures of industry provides strong and growing demand for semiconductors. Industry spending plans for next year show big increases. DATAQUEST follows a large proportion of the electronics industry. Business is good.

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C 1984 Dataquest Incorporated Oct. 15 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

This is the good news: Although we are going through a process of adjustment, we are doing so in a period of increasing semiconductor demand.

We believe United States semiconductor consumption will be approximately twelve and a half billion dollars in 1984. It will be nearly fifteen and a half billion dollars in 1985. This is a level more than double semiconductor consumption of two years ago. The increase in United States semiconductor consumption this year is truly awesome an for industry the size of the semiconductor industry. Given the momentum of a fast start in 1983, consumption in 1984 is expected to be 49% above that of last year. This is led by integrated circuits, with growth of over 50%, but there has been tremendous growth as well in the discrete and optical electronic segments. In 1985 we expect growth to be considerably slower. But 24% growth is a good year. Next year's growth sounds better than it is in reality, because of the rate at which the industry will enter the year. Nevertheless, our forecast is more optimistic than those of several companies and the Semiconductor Industry Association. Where we differ is primarily in our beliefs of the growth of real demand, and in the effects of price attrition on the market in terms of dollars. Prices are extremely difficult to forecast. They will go down over the next year, but how much is much more difficult to assertain. We believe that the publicity of falling prices of dynamic RAMs has led to a certain amount of exageration with respect to all other semiconductor products, where price attrition is expected to be considerably less. Additionally, prices will not be given a downward push from a falling economy. It is too easy to be too pessimistic.

Let's look at what's happened in terms of quartely changes in shipments into the U.S. semiconductor market. If you look at where we are right now we see the major quarter to quarter increases in shipments beginning with the second quarter of 1983. The seasonality of the industry, with weaker first and third quarters, is much in evidence here. There has been some long term decline, but only of a minor amount, in the rate of shipments. From now on, we expect a rapid drop in the quarter to quarter increases in semiconductor shipments as we work through the process described earlier. Once that is done, semiconductor consumption and shipments in dollars will resume a more rapid rate of increase. We are looking for a much less bouyant period for the industry in the next few quarters with a rapidly improving situation in the second half of 1985. I might point out, that this makes no assumption on the economy for 1986. What happens then is very difficult to foretell. We expect U.S. semiconductor consumption for the third quarter to be approximately 3.26 billion dollars, as shown on this chart. One year from now we expect it to be 3.9 billion dollars or an increase of about 20 percent. That growth pales only in comparison with what we have seen over the last year and a half. Even during this period of adjustment the strong long term demand for semiconductors will ease the difficulties.

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O 1984 Dataquest Incorporated Oct. 15 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

I would like to speak a little bit about that long term outlook. More will be covered in other speeches during this conference. Back at the first conference we held, we had a chart on average price per function for IC's and we have updated that yearly. This year, we updated the chart itself to make it a little more visible. I might point out that on the left is a logrhythmic scale. Prices have been dropping regularily at 30 to 35 percent a year ever since 1962. It is interesting to note that there was a slowdown during the period of 1978 through 1980, but since that time average prices have been going down at a fairly rapid pace. This is the engine that ultimately feeds long term demand. Its not going to stop. New markets and increased pervasiveness will come from the greater cost/performance of semiconductors. This is basic economic elasticity. Why does the future look so bright?

Look at some comparisons between current technology and future technology, the very near term future. Virtually all of the semiconductor devices now produced are 3-micron minimum dimensions or greater. We are just beginning to see new devices manufactured with 2-micron minimum dimensions. I might point out that the assumptions here are realitively crude and they are here simply to make the comparison between now and a few years in the future. Don't compare tihese with your own costs, density, yields, and so on. We know wafer sizes are going to increase. To a certain extent, processing costs will increase with size. We have assumed a modest increase in chip size and a fairly a significant increase in yields. Yields do appear to be going up rapidly throughout the industry. This is the first time I have seen yields rise during a period of rapidly increasing shipments. We have made a gross assumption of chip cost to final product cost and kept it the same. Because of the higher density and larger chip size there can be over 3 1/2 times as many transistors, gates, bits, etc., on the chip. And this means ultimately that the cost for a particular function is going to decline precipitously. I find it interesting that this great engine of cost reduction that we have in this industry will give us more than a four to one improvement in the next few years. The semiconductor industry is a long way from being mature and, therefore, the market for semiconductor is a long way from being mature. The industry is providing systems engineers with some tremendous changes. Changes in t±e industry are occuring faster now than they ever have. We are experiencing rapidly increasing density, rapidly improving yield, automation of processing, rapidly decreasing costs (per function), a tremendous variety of new architectures for processors, many new types of products, and rapidly improved performance - in terms of speed, power, and so on - for those products. Never before has the engineer who applies semiconductors to applications had so many new tools to improve their products. They are facing rapid major increases in system capabilities in terms of cost performance.

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C 1984 Dataquest Incorporated Oct. 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

unfortunately this is increasing the applications lag for the industry. Systems engineers are already far behind in taking advantage of the products that are available to them today, and its apt to get worse in the future. Last year we asked a simple question: If you use a 100 chips in a system, and each chip has a million transistors, what kind of system do you make with 100 million transistors? Nobody knows I Yet that is the microelectronic capability of the very immediate future.

We have some confidance that people will answer these questions. The capabilities and costs will be translated into ever expanding markets for electronics and semiconductors. We believe that by 1989 the worldwide semiconductor industry will be 64 billion dollars, or more than twice the size it is today. That translates into more than 19 percent compound annual growth even though there is a modest recession built into those assumptions.

This won't happen however unless you make it happen. Currently we are entering a period where business is going to be more difficult than it has been. Its time for all of us to roll up our sleeves and get the job done. And its time for all of us to face reality. There is a strong message here for everyone in this room. Semiconductor companies have to get products out the door that their customers can easily apply. The industry's ability to take advantage of its processing capability - in terms of density, cost, speed, and so on - is abyssnal. Execution stinks. Engineers need to learn to complete projects with the speed that they write resume's, count stock options, and change jobs. Venture capitalists should understand that added value rests more in design and application, not in yet another fab. Growth is there only if we make it happen.

Let me conclude by stating again how we see the industry outlook. Although demand is continuing to grow, we will experience several difficult months as we go through a process of adjustment of inventories and recent excesses. After that more rapid growth is expected to resume. Long term, the high growth of the industry will continue. Pervasiveness has just begun I

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C 1984 Dataquest Incorporated Oct. 15 ed.-Reproduction Prohibited


SEMICONDUCTOR OUTLOOK

Soft Landing or Hard

Frederick L. Zleber Dataquest Incorporated

October 15, 1984

•

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U.S. SEMICONDUCTOR CONSUMPTION

Billions of Dollars

$3.08 S3.26 S3.43

S1 .67 S1.97 $2.19

$2.51 S2.70

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

1983 1984

BOOK/BILL RATIO 1984

1.6

1.4 -

1.2 -

1.0

0.8 JAN FEB MAR APR MAY JUN JUL AUG SEP

- 8 -© 1984 Dataquest Incorporated Oct. 15 ed.-Reproduction Prohibited


mBmmmmamfimmi^

AT THE SEMICONDUCTORS USERS mmnaammmammmmmmmmmmiimmmmmmtaiammmmemimmmmmm^meim

• RAPID RECENT INVENTORY BUILDUP

• SLOWER RATE OF INCREASE IN ORDERS

• LOWER EXPECTATIONS

• A FEW DISASTERS

• AVAILABILITY OF COMPONENTS

• DECREASING LEAD TIMES

AT THE SEMICONDUCTOR MANUFACTURERS IN iMH.uiwi«WBWMeaMJj.m»Lu

• RAPID INCREASE IN CAPACITY

• DECLINING BOOKINGS

• DECREASING LEAD TIMES

• PRICE PRESSURE

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© 1984 Dataquest Incorporated Oct. 15 ed.-Reproduction Prohibited


a m

WHAT'S HAPPENING?

• WE HAVE ENTERED A PERIOD OF ADJUSTMENT WHERE EXCESSES WILL BE BROUGHT INTO LINE.

• EVEN THOUGH: -THE ECONOMY IS NOT IN RECESSION -REAL DEMAND IS GROWING

IT HAS HAPPENED BEFORE!

THE PROCESS

1. INCREASING SHIPMENTS LEAD TO INVENTORY BUILDUP.

2. USERS ADJUST ORDER RATES, INVENTORIES. 3. BOOKINGS DROP. 4. LEADTIMES, BACKLOGS. PRICES DECLINE. 6. BOOKINGS DROP MORE. 6. SHIPMENTS SLOW. 7. REAL UNIT DEMAND CONTINUES TO INCREASE. 8. BOOKINGS RISE.

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O 1984 Dataquest Incorporated Oct. 15 ed.-Reproduction Prohibited


BwwwwH—I I I im IWLI wnww—wi iB i

THE ECONOMY

• LEADING INDICATORS - MIXED

• HOUSING STARTS - DOWN

• RETAIL SALES - DOWN



THE

1970

1974

1980

1984

YEAR BEFORE

PRIME RATE

6.6 TO 8.5 %

5.8 TO S.e%

11.6 TO 15.3%

10.9 TO 12.8%

A RECESSION

CONSUMER

PRICES

6.3%

12.0%

15.8%

4.0%

MONEY

SUPPLY

DOWN

DOWN

DOWN

UP

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Q4

Q4

Q3

BOOK

1970

1974

1980

TO BILL

TI

0.71

0.68

1.00

RATIO

SIA

0.48 EST.

0.45 EST.

0.77 EST

mmimmmimmmwmmKirmmmiim

ESTIMATED U.S. SEMICONDUCTOR CONSUMPTION

(Millions of Dollars)

1S83 1984 1885

DISCRETE DEVICES

INTEGRATED CIRCUITS

TOTAL

$1,423 S 1,954 S 2.218

6.914 10.511 13.214

88,337 S 12.465 $15,432

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ESTIMATED CHANGE IN U.S. SEMICONDUCTOR CONSUMPTION

Percent Change

bU

50

40

30

20

10

37.3^

92.02 A$.3%

13.5?

25.7% 24.n

DISCRETE IC TOTAL DISCRETE IC TOTAL

1983 to 1984 1984 to 1985

mmmmmmmmmKKtimamiKmmimmmmmimmmmmKmammmmmKmimmmmimmm

ESTIMATED QUARTERLY U.S. SEMICONDUCTOR CONSUMPTION

(Millions of Dollars}

1983

DISCRETE DEVICES INTEGRATED QRCUTTS

TOTAL

Q1 Q2 Q3 Q4 S 294 $ 342 S 371 S 416

1,382 1,626 1.816 2.090 SI.676 $1,968 $2,187 $2,506

1984

DISCRETE DEVICES IhfTEGRATED CIRCUITS

TOTAL

Q1 02 Q3 Q4 $ 442 $ 491 $ 501 $ 520 _2_^60 _2.586 2,760 2.905 $2,702 $3,077 $356? $"3,425

MM

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ESTIMATED QUARTERLY CHANGE IN U.S. SEMICONDUCTOR CONSUMPTION

Percent Change

20

1?)

10

5

A

2.23!

17.4^

11 .U

4.6%

7.8?

13.9%

b.iiZ

Q1 Q2 Q3 Q4 Q1 Q2 Q3

1883 1984

ESTIMATED QUARTERLY U.S. SEMICONDUCTOR CONSUMPTION

aauBuii^jagma MBOBaOBBO

(Millions of Dollars)

1984

DISCRETE DEVICES INTEGRATED QRCUITS

TOTAL

DISCRETE DEVICES INTEGRATED CIRCUITS

TOTAL

Q1 02 Q3 04 S 442 $ 491 S 501 S 520

2,260 2,586 2.760 2,905 S2,702 $3,077 $3,261 $3,425

1985

01 02 03 04 S 529 $ 549 $ 558 $ 582

3,026 _3,195 3,343 3,650 $3T555 $3774'4 $3i9dl $4.'23"2

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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

ESTIMATED QUARTERLY CHANGE IN U.S. SEMICONDUCTOR CONSUMPTION

Percent Change

15

10 7 ft^

13.92

6.0% . «o. «? - i r Q.Va,

•J.tiH. H.£.f,

8.5^

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

1984 " 1985

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AVERAGE PRICE PER FUNCTION (ICs) (Miilicents)

1,000

100

10 74 76 78 79 80 81 82 83 84

COST MODEL

MINIMUM DIMENSION

WAFER SIZE

PROCESSING COST

CHP SIZE (MILS SQUARE}

YELD

CHP COST TO PRODUCT COST

CURRENT

3 MICRONS

4 INCH

S140

200

30%

4X

FUTURE

2 MICRONS

6 INCH

$220

250

50 ?

4X

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iwni«MEUiMiiui.«

COST MODEL

GOOD DIE

DIE COST

FINISHED PRODUCT COST

TRANSISTORS PER DE (OOO's)

COST PER TRANSISTOR

mKR«!H<*nnnmH*nnnHPnnRm!

CURRENT FUTURE

100

$1.43

S5.60

60

9.3mc

200

S1.10

$4.40

211

2.1m<t

TECHNOLOGY HAS A LONG, LONG WAY TO GO

• DENSITY

• YIELD

• PROCESSING

• COST

• ARCHITECTURE

• CMOS

• EPROM. EEPROM

• CAD

• ASIC'S

• PERFORMANCE

NO SLOWDOWN



WMWngnHHBKMPV mmmmimamaf

APPLICATIONS LAG mmmmmammKmmtm uufMumiLihULHi

• WORSE THAN EVER.

• WHAT TO DO WITH 100 MILLION TRANSISTORS?

WORLD SEMICONDUCTOR CONSUMPTION Billions of Dollars

70

60

50

40

30

20

10

26.6 32.6

63.9

49.9

37.2 41.1

1984 1985 1886 1987 1988 1989



• SHORT TERM -TWO DIFFICULT QUARTERS -IMPROVEMENT THEREAFTER

• 1985--24.1% G R O W T H

• 1989--$63.9 BILLION

• 5 YEAR CAG--19.3%



(::)aDataquest

Dataquest

THIS PRESENTATION WAS NOT AVAILABLE AT PUBLICATION TIME.

IF A COPY IS MADE AVAILABLE TO DATAQUEST, WE WILL MAIL IT DIRECTLY TO YOU FOLLOWING THE CONFERENCE.




Dataquest

Dataquest

THE EXPANDING UNIVERSE OF SEMICONDUCTORS

Charles E. Thompson Senior Vice President

Director of World Marketing Motorola Semiconductor Products Sector

Mr. Thompson is Senior Vice President and Director of World Marketing for Motorola's Semiconductor Products Sector. Previously, he held positions as Marketing Manager, Materiel Manager, and Manager, Information Systems, in Motorola's Semiconductor Group. Mr. Thompson also spent 18 years at General Electric Company in Product Planning and Marketing, as a Corporate Consultant on computers, and in Computer Applications. He received a B.S. degree in Mathematics from the University of Washington.




Dataquest

Dataquest



Dataquest incorporated SEMICONDUCTOR INDUSTRY CONFERENCE



.i : I :;:;a Dataquest

Dataquest

1984: BEFORE AND BEYOND

James F. Riley Senior Vice President Dataquest Incorporated

Mr. Riley is a Senior Vice President of DATAQUEST. Previously, he was President of Signetics and President of Intersil Incorporated. He has 20 years of experience in the semiconductor industry, the last nine of which have been with DATAQUEST. Mr. Riley has considerable experience in corporate planning, marketing, and general management. He received a B.S. degree in Business Administration from Lehigh University, where he was elected to Phi Beta Kappa.




1984

BEFORE AND BEYOND

The DATAQUEST Semiconductor Group has been following the semiconductor industry for ten years. Today I want to look back 10 years and forward 10 years. (Slide 1)

We present the challenge, "Where should semiconductor executives focus their attention in the next ten years?" The benefits of answering the questions this challenge raises lie in the process of answering them as much as in the answers themselves. (Slide 2)

This speech has three parts:

• Data for 1974 through 1994—A quantitative discussion of the industry including our projections for 1994

• A look at the semiconductor industry in 1994

• A presentation of some of the questions you should be considering, and some suggestions for formulating the answers. You've probably already noticed that t±e questions are not printed in the speech in your binder. We included some sheets for your notes and comments. (Slide 3)

Let's look at the semiconductor market, from both a product and geographic point of view. Then I will touch briefly on the developments in technology, the industry's major suppliers, and the users. (Slide 4)

In 1974 the worldwide semiconductor industry totaled $5.4 billion dollars. This year we estimate worldwide semiconductor consumption at $25.8 billion, and by 1994, we project a worldwide semiconductor market Of $175.5 billion.

1974 through 1983 showed a compound annual growth rate of 14.8 percent, and we project a compound annual growth rate of 22.6 percent for the next ten years. (Slide 5)



Let's look now at ICs, discretes, and opto devices. In 1974 we were still living in a discrete world. Fifty percent of all semiconductor devices were discrete. This year we estimate that 79 percent of semiconductor consumption will be ICs. By 1994 we will be living in an almost totally integrated world, with ICs representing about 91 percent of semiconductor consumption. Perhaps the most amazing part of this forecast is that, although discretes go from 50 percent down to 4 percent of the total, we still expect the discrete market to continue to grow in absolute dollars at around 6 to 7 percent per year. (Slide 6)

If we turn to integrated circuits and look at the market by major product group, you can see that microprocessors accounted for a mere 2 percent of the IC market in 1974. Logic, at 56 percent, made up more than half the market. In 1984, logic accounts for only 30 percent of the market, while the microprocessor share has increased to 14 percent. By 1994, microprocessors will account for 27 percent of the market.

Memory, which represented only 16 percent of the IC market in 1974, is expected to grow steadily to 39 percent by 1994. Although we expect linear devices to grow in absolute dollars, our estimates show that linear devices will account for a progressively smaller percentage of the total IC market although growing at 14 percent per year. (Slide 7)

Another important aspect of the IC market is the split between standard and application-specific devices. As this chart shows, we expect the ASIC market share to grow from 1 percent in 1974 to 27 percent in 1994. These estimates include both merchant and captive production. (Slide 8)

Let's turn now to consumption by geographic region. These three pie charts clearly show the growth in the Rest of World segment and the decline in European consumption as a percentage of the total. (Slide 9)

This is the picture when we look at semiconductor market share by origin of manufacturer. (That means that if a U.S. company manufactures the product, it is counted as U.S. market share even if it is not actually manufactured in the United States.) As you can see, we anticipate substantial growth in the Japanese market share and a decline in the market share of European companies. Resolution of the 11% grey area between the U.S. and Japan is still an open question. (Slide 10)

Let us now look at technology developments. (Slide 11)



All DATAQUEST clients are familiar with this chart, although you've never seen it projected out this far. If the trend we have been plotting continues, the price per function will be down to 0.7 millicents by 1994. (Slide 12)

Of course, one of the main reasons that the price per function has declined so rapidly, is that over the years we have crammed more and more functions onto a single chip. This slide shows the increase in complexity over the period in question. From 20 thousand transistors in a 4K static RAM in 1974, we are projecting the possibility of a 16 megabit dynamic RAM by 1994 that will contain a staggering 17 million transistors. (Slide 13)

This slide shows wafer starts by line width for the period 1974 through 1994. In 1974, the vast majority of wafer starts (95 percent) were in geometries greater than 6 microns. This year we are seeing the very beginning of sub-micron geometries, but devices with greater than 5-micron geometries still account for 34 percent of the wafer starts. By 1994, the majority of devices (40 percent) will be 1 to 2-micron-devices, and sub-micron geometries will account for as much as 25 percent of the market. (Slide 14)

As geometries get smaller, wafers get larger. The majority of devices were produced on 3-inch wafers in 1974. This year we are seeing the majority produced on 4-inch wafers although the trend to 5- and 6-inch wafers is gaining momentum. By 1994, we expect 6-inch wafers to predominate, although there will still be substantial production in 4- and 5-inch wafers. (Slide 15)

We are at the threshold of important changes in packaging technology. In 1974 surface-mount devices accounted for less than 1 percent of the merchant IC market. Today they account for about 5 percent of the merchant market; by 1994, we expect to see as many as 50 percent of all ICs shipped as surface-mount devices. (Slide 16)

Let's move now from the devices being supplied to the companies supplying them. (Slide 17)

These were the top ten suppliers of ICs in 1974: eight U.S. companies and two Japanese companies. (Slide 18)



The final data are not in for 1984, but this was the picture in 1983. Five of the top ten were U.S. companies, four were Japanese, and one was European. (Slide 19)

We don't usually make projections for individual companies, but one prediction we can make:

The top ten companies in 1994 will be those companies that have successfully addressed the questions that I will be presenting at the end Of this speech. (Slide 20)

In 1974, we identified 86 merchant semiconductor manufacturers and 36 captives. Today there are more than 180 merchant suppliers and 60 captives. Both these numbers could double by 1994. The problem in 1994 will be defining merchant or captive—or even semiconductor manufacturers. Captive suppliers are selling on the merchant market; government-sponsored research agencies are making commercial commitments; and array companies are proliferating with fabrication capability ranging from 60 to 100 percent. (Slide 21)

This chart shows our estimates of capital expenditures by semiconductor manufacturers in Japan and the United States. As the chart shows, Japanese expenditures consistently exceed U.S. expenditures as a percentage of revenues. The chart also clearly demonstrates how much capital expenditures as a percentage of revenue have increased since 1974. (Slide 22)

This slide shows part of the reason why those capital expenditures have climbed so high. In 1974, the cost for starting a wafer fab was $5 million. Today it is of the order of $100 million. By 1994, it could easily be $200 million or more. (Slide 23)

This slide shows the equipment demand behind those costs. It also clearly demonstrates the equipment technology trends over the years 1974 through 1994: from contact aligners to X-ray steppers, from wet to dry chemistry, and from zero automation to full automation. (Slide 24)

Despite the high cost of entry, there seems to be no slowing in the number of people willing to start new semiconductor companies. This slide, which is taken from a recent DATAQUEST newsletter, shows the number of semiconductor start-ups over time. 1983 was a record year with 16 start-ups in the United States, and although 1984 is not yet over, the record has been broken—18. (Slide 25)

Let's turn now from the people who sell the devices to the people who use them. (Slide 26)


Dataquest Incorporated, A Subsidiary of A.G. Nielsen Company /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973

The number of semiconductor users has grown dramatically over time. These estimates show the number of semiconductor purchasing locations growing from 25,000 in 1974 to 500,000 in 1994. Pervasiveness, which is the theme of this conference, is the main reason for this explosive growth. (Slide 27)

EDP has the largest end-use market share. Telecom is the fastest growing. (Slide 28)

This slide shows our estimates of the cumulative number of semiconductor design workstations in use through 1994. 1984's number will include some IBM PC-based engineering terminals. By 1994, however, we expect to see a significant change in the use, performance, and appearance of the PC as we view it today and therefore, our projections for the 1994 number will include some of these low-cost systems. (Slide 29)

I'd like to take a moment now to review some of the DATAQUEST Semiconductor Group statistics. Back in 1974, there were just two people—Fred Zieber and me. Today we have 46 people worldwide, and that doesn't count the support staff who are part of DATAQUEST's corporate organization. If you project the same compound growth rate for the next ten years, we will have 1,058 employees by 1994. Of course if we, like you, concentrate our efforts on increasing yields, we may get that much productivity without quite that many people.

We need a bigger staff these days because our client base has grown to over 450. By 1994, it could be as high as 5,000 and we will still be able to say that our clients manufacture more than 90 percent of the semiconductors sold on the merchant market.

If you use the same kind of growth rates on our revenue estimates, we will be looking for $60 million by 1994—please budget accordingly.

We started the Semiconductor Group in the heart of Silicon Valley. Today, we also have research offices in London and Japan. It's hard to say where we will go next, but we will be on hand to follow the semiconductor industry wherever it goes. (Slide 30)

I want to take all those statistics we've just covered and build a picture of 1994. (Slide 31)



1994—The Market (Slide 32)

10 Tiroes Larger

ASIC Impact

U.S./Japan Struggle

Subsidized ROW Entry

Super Niches

New Applications

Market Driven

Blurring of National Boundaries

1994—Manufacturing (Slide 33)

Mixed Bipolar/MOS

High Technology/Low Differentation

$0.5 billion Sales from Standard Fab—going to $1 billion

Wafer Subcontracting

Full Automation

7 days/week, 24 hours/day

1 Week Turnaround

New Packaging Technology

1994—The Users (Slide 34)

New Companies/New Markets (10 PC markets will emerge)

New Countries Will Emerge as Users (e.g., Israel, Australia, South Africa)

All Survivors Will Design Their Own ASICs—Key to Survival



"On-line" to Multiple ASIC Vendors

Design Technology Available Multi-nationally

Hardware like Software

Less Economy o£ Scale (Cheap ASICs open equipment markets to all)

Grow by a Factor o£ 3

Uses Of Semiconductors in 1994 (Slide 35)

Neither DATAQUEST or anybody else has ever been able to invent enough applications to justify the markets that eventually will occur. There are sure to be additions to this list.

Some Ideas:

• Voice I/O for Computers

• Dedicated Computers

- weather forecasting

- geological survey

- logic and circuit simulation

• Vision, Touch, (Taste?) (Smell?) Analysis

• Vision Systems for Robots

• Medical Advances:

- artificial limbs

- diagnostic tools

• Digital Signal Processing



Blur ing (Slide 36)

Analog/Dig ital

MOS/Bipolar

Computer/Calculator

Computer/Communications

Supplier/Customer

IC Designers/Systems Designers

- 250,000 systems designers

- 3,000 digital designers

- 300 linear designers

Other Factors to Consider in 1994 (Slide 37)

• Gallium Arsenide

• Fiber Optics

• Organic Semiconductors

• Superlattices

• Wafer-scale Integration

It certainly is a very exciting picture, and if you want to be part of it, these are some of the questions you must ask yourself today. (Slide 38)

QUESTIONS TO BE PRESENTED AT THE CONFERENCE,



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1984--BEFORE AND BEYOND

4 .

• DATA 1974-1994

• A VIEW OF 1994

• THE QUESTIONS

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DATA 1974-1994

I • THE MARKET

• TECHNOLOGY

• SUPPLIERS

• USERS

- 10 -O 1984 Dataquest Incorporated Oct . 15 ed.-Reproduction Prohibi ted


5 .

ESTIMATED WORLDWIDE SEMICONDUCTOR MARKET

Billions of Dollars

200

150

100

50

$5.4 S11.1

S64.0

S25.8

SI 75.5

1974 1379 1984 1989 1994

ESTIMATED WORLDWIDE SEMICONDUCTOR MARKET

IC - DISCRETE - OPTO Percent 100

80

60

40

20 I i i •I I I 1974 1979 TOTAL S5.4B S11.1B

EZ2 IC • DISCRETE

1984 1989 1994 $25.8B $64.0B S175.5B

m OPTO

Source: DATAQUEST



7 .

8.

ESTIMATED WORLDWIDE INTEGRATED CIRCUIT MARKET

BY MAJOR PRODUCT GROUP Percent 100

60

60

40

20

1974 TOTAL $2.58

E2 MP

M ^ ^

1879 S7.1B

ED MEMORY

1984 S20.2B

1989 S55.4B

a

• LOGIC

1994 S160.4S

^ LINEAR

ESTIMATED APPLICATION-SPECIRC VS. STANDARD INTEGRATED CIRCUITS

Percent 100

80

60

40

20

(EXCLUDES ROM AND PROM}

1974 1979 1984 1969 0 ASIC D STANDARD

1 1994

Source: DATAQUEST



9 .

ESTIMATED SEMICONDUCTOR CONSUMPTION BY REGION

10 .

1974 [~] UNITED STATES

[ x ] EURore

O JWrtN

H KM

1S84 1994

ESTIMATED GEOGRAPHIC SEMICONDUCTOR MARKET SHARE

BY ORIGIN OF MANUFACTURER | ~ | UNITED STATtS

[Tj ilMOK

n

1984

1974

< U

1994

Source: DATAQUEST



11.

12 .

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DATA 1974-1994

• THE MARKET

| « TECHNOLOGY

• SUPPLIERS

• USERS

ESTIMATED AVERAGE PRICE PER FUNCTION (ICs)

12 z 111 u _i s z

i p 3 u.

10

1.0

- x^

-

1 1 t 1 I I I t I 1 1

es 85 » 87 88 89 90 91 92 93 94 YEAR

Sourca: DATAQUEST



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ESTIMATED DEVICE COMPLEXITY

YEAR DEVICE NUMBER OF

TRANSISTORS

1974 1979 1984 1989 1994

4K SRAM 64K DRAM 1Mb ROM

4Mb DRAM 16Mb DRAM

20.000 150.000

1.200,000 4.500.000

17.000,000

14. WAFER STARTS BY LINE WIDTH

100%

w tt Ul u. <

50H -

BELOW 1 MICRON

1-2 MICRONS

3-6 MICRONS

6 MICRONS AND UP

1974 1984 1994

Source: DATAQUEST



15 .

WAFER SIZE

16.

3" 4" 6"

ESTIMATED SURFACE-MOUNT PACKAGES AS A PERCENTAGE OF ICs

Percent

100

80

60

40

20

< n ^ 1 —• \ \

50^

1974 1984 1994

Source: DATAQUEST



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DATA 1 9 7 4 - 1 9 9 4

• THE MARKET

• TECHNOLOGY

l^« SUPPLIERS

• USERS

18 .

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1974 TOP TEN MERCHANT IC SUPPLIERS

TEXAS INSTRUMENTS FAIRCHILD NATIONAL MOTOROLA SIGNETICS INTEL RCA NEC AMI HITACHI

Source: DATAQUEST



19.

1983 TOP TEN MERCHANT 10 SUPPLIERS

TEXAS INSTRUMENTS NEC MOTOROLA HITACHI NATIONAL INTEL PHILIPS/SIGNETICS FUJITSU* TOSHIBA' AMD-•HEii'EliTr^rt^rTS

Source: DATAQUEST

20.

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ESTIMATED NUMBER OF COMPANIES

1974 1984 1994

MERCHANT CAPTIVE

TOTAL

86 180 360+ 36 60+ 120+

122 240+ 480+

22.

ESTIMATED CAPITAL EXPENDITURES AS A PERCENT OF REVENUE

Percent of Revenue

50

40

30

20

10

1374 1979 1984 1989 • U.S. D JAPAN

1994

Source: DATAQUEST

- 19 -e 1984 Dataquest Incorporated Oct . 15 ed.-Reproduction Prohibited


23 .

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WAFER FAB TURNKEY COST

1974 $ 5 MILLION

1984 $100 MILLION

1994 $200 MILLION

24.

TYPICAL CONTENT OF A WAFER FAB

1974 • CONTACT ALIGNERS • WET CHEMISTRY • NO AUTOMATION

1984 • WAFER STEPPERS • DRY ETCH • ION IMPLANT

• SOME CAM (COMPUTER-AIDED MANAGEMENT) 1994 • X-RAY WAFER STEPPERS

• DRY ETCH • ION IMPLANT

• CLASS 1 WAFER ENVIRONMENTS • IN-LINE PROCESSING • FULL AUTOMATION

Source: DATAQUEST



25.

HISTORY OF SEMICONDUCTOR START-UPS

Some*: DXTAOUEST

26,

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DATA 1974-1994 <B8«a3a»BM«aMBW«aiffl»»sae8MM«Mai

• THE MARKET

• TECHNOLOGY

• SUPPLIERS

^ • USERS



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GROWING USER BASE

1974 1984

1994

25.000 USERS 150,000 USERS 500,000 USERS

28.

END USE D E D P H GOVERNIVIENT U AUTOMOTIVE O CONSUMER H TELECOM M INDUSTRIAL

1984

1974

1994

Source: DATAQUEST



29. ' •<••- »: • . - X s i e - i ' • ^ » H j t K i . i ( * ' , * » * " . » ' : ' ^ x » ' e ' ( • • » . , ( ' . - ' ( ' • : ' l t * ) » « ' . i ' . ' , . « * • < : . ( ! * . - . . . . i ' ^-.-..'..•' . : y * * i M i f - : : ^ ' \^',:Y:'..' « . . . ' • « • : ^ " ' : ' x . .. > V,.. ..'»*'. • . ' • • , , • ' . •• ' f •% ' •

ESTIMATED NUMBER OF ENGINEERING WORKSTATIONS

30.

1974 1984 1994

IC WORKSTATIONS

< 1.000 4.000

250.000

DATAQUEST SEMICONDUCTOR GROUP 1974-1994

1974 1984 1994

PEOPLE SERVICES CLIENTS REVENUES LOCATIONS

2 1 2 0 1

46 4

450 $5 MILLION

3

500 5.000 5.000

$60 MILLION 9


Dataquest Incorporated, A Subsidiary of A.G. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973

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1994--THE MARKET

• 10 TIMES LARGER • ASIC IMPACT • U.S./JAPAN STRUGGLE • SUBSIDIZED ROW ENTRY • SUPER NICHES • NEW APPLICATIONS • MARKET DRIVEN • BLURRING OF NATIONAL BOUNDARIES



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34.

1994--MANUFACTURING

• MIXED BIPOLAR/MOS • HIGH TECHNOLOGY/LOW DIFFERENTATION • $0.5 BILLION SALES FROM STANDARD

FAB--GOING TO $1 BILLION • WAFER SUBCONTRACTING • FULL AUTOMATION • 7 D A Y S / W E E K . 24 HOURS/DAY • 1 W E E K TURNAROUND • NEW PACKAGING TECHNOLOGY

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1994--THE USERS

• NEW COMPANIES/NEW MARKETS

• NEW COUNTRIES WILL EMERGE AS USERS

• ALL SURVIVORS WILL DESIGN THEIR OWN ASICs--KEY TO SURVIVAL

• "ON-LINE" TO MULTIPLE ASIC VENDORS

• DESIGN TECHNOLOGY AVAILABLE MULTI-NATIONALLY

• HARDWARE LIKE SOFTWARE

• LESS ECONOMY OF SCALE

• GROW BY A FACTOR OF 3

- 25 -e 1984 Dataquest Incorporated Oct . 15 ed.-Reproduction Prohibited

Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Park Drive / San Jose, GA 95131 / (408) 971-9000 / Telex 171973

USES OF SEMICONDUCTORS IN 1994 «KkSiH8SSiiiH;SSi88!iH!S«S!SSS^^

NEITHER DATAQUEST OR ANYBODY ELSE HAS EVER BEEN ABLE TO INVENT ENOUGH APPLICATIONS TO JUSTIFY THE MARKETS THAT EVENTUALLY WILL OCCUR. THERE ARE SURE TO BE ADDITIONS TO THIS LIST.

SOME IDEAS

• VOICE I/O FOR COMPUTERS

• DEDICATED COMPUTERS

• V IS ION. TOUCH, (TASTE?) (SMELL?) ANALYSIS

• VISION SYSTEMS FOR ROBOTS

• MEDICAL ADVANCES

• DIGITAL SIGNAL PROCESSING

36,

BLURRINQ

• ANALOG/DIGITAL • MOS/BIPOLAR • COMPUTER/CALCULATOR • COMPUTER/COMMUNICATIONS • SUPPLIER/CUSTOMER • 10 DESIGNERS/SYSTEMS DESIGNERS



37.

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OTHER FACTORS--1994

• GALLIUM ARSENIDE

• FIBER OPTICS

• ORGANIC SEMICONDUCTORS

• SUPERLATTICES

• WAFER-SCALE INTEGRATION

38.

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OUESOilONS

- 28 -e 1984 Dataquest Incorporated Oct. 15 ed.-Reproduction Prohibited


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QUESTIONS



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QUESEIONS



QUESTIONS



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Dataquest

BIPOLAR FIGHTS BACK

John C. East Vice President—Bipolar Division Advanced Micro Devices, Inc.

Mr. East has been Vice President of the Bipolar Division of Advanced Micro Devices, Inc., since 1982. Previously, he was Operations Manager of Digital Integrated Circuits at Raytheon Semiconductor. He has also held various positions in engineering, marketing, and production at Fairchild Semiconductor. Mr. East received a B.S. degree in Electrical Engineering and an M.B.A. degree in Production Management, both from the University of California at Berkeley.




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Dataquest

SEMICONDUCTOR INDUSTRY SERVICE MINI-CONFERENCES

Monday, October 15, 1984 1:45 p.m. to 4:00 p.m.

This year, for the first time, the Semiconductor Industry Service is presenting hour-long mini-conferences. These mini-conferences will feature presentations by the DATAQUEST staff followed by informal discussion periods.

The User Workshop will follow the format used in past years. The workshop leader will make a short presentation at the beginning, but is mainly there to guide the discussion among the industry participants.

The objective of these sessions Is to provide an Informal forum where Interested conference attendees can focus on key Industry Issues and discuss them In greater depth than Is possible during the larger sessions.

MINI-CONFERENCE SESSIONS

1:45 p.m. CAD/CAM and ASICs—Regent Empress Room Jim Newcomb, Director, CAD/CAM Industry Service Andy Propliet, Senior Industry Analyst, Semiconductor Industry Service

The fortunes of the CAD/CAIVI industry and the ASIC (Application Specific Integrated Circuit) segment of the Semiconductor Industry are inextricably linked. The EDA (Electronic Design Automation) segment of CAD/CAIVI provides the design technology for creating new ASIC designs: gate arrays, standard cells, and custom ICs. Advances in ASIC technology. In turn, drive EDA workstation product Innovations. Together they form a powerful synergistic relationship that will have a profound Impact on the semiconductor industry.

Memory—Hanover Room Lane Mason, Senior Industry Analyst, Semiconductor Industry Service

The semiconductor memory market constitutes more than 35 percent of integrated circuit revenues. After 2-1/2 years of extraordinary growth, this market is poised to undergo a dramatic transformation in technology, circuit diversity, and values to the user. This seminar will provide:

• Memory market overview and status—-1984

• Trends in supplier base, technology, packaging, and price outlook

Equipment and Technology—Windsor Complex Robert McGeary, Senior industry Analyst, Semiconductor industry Service Gene Norrett, Director, Japanese Semiconductor industry Service Arden DeVincenzi, Researcli Analyst, Semiconductor industry Service

Semiconductor equipment drives the technological revolution in the Semiconductor Industry. The Equipment and Technology session will cover three topics: factory automation, worldwide joint ventures, and worldwide capital spending. Each topic will be introduced by a 5-minute overview, followed by a 30-minute discussion workshop. The session will end with three 10-minute recaps.

(over)


MINI-CONFERENCE SESSIONS (Continued)

3:00 p.m. Microprocessors—Oxford Room Met Thomsen, Senior Industry Analyst, Semiconductor Industry Service Jan Rey, Research Associate, Semiconductor Industry Service

This session will briefly review the microprocessor market during the first half of 1984 and will then analyze the outlook for 32-bit microprocessors. Various forecasts for this market vary by as much as 10:1 for shipments of this product family. This session will address this discrepancy and present market data for some expected applications for these high-performance microprocessors.

User Workshop—Regent Empress Room Stan Bruederie, Director, Semiconductor User Information Service Jean Page, Industry Analyst, Semiconductor User Information Service Mary Olsson, Research Analyst, Semiconductor User Information Service

Participants in the User Workshop will exchange views on surface-mounted packaging, just-in-time delivery, and buying semiconductors in Japan. The objective of the workshop will be to examine the potential cost savings against the realities of implementation.

Geographic Trends—Windsor Complex Malcolm Penn, Director, European Semiconductor Industry Service Sheridan Tatsuno, Research Analyst, Japanese Semiconductor Industry Service

The World of Semiconductors is becoming increasingly global. This session will deal with trends in the three major geographic segments of the world market with emphasis on Europe and Japan rather than on the United States.

Since the spring of 1984, the U.S. semiconductor market has experienced a slowdown in bookings while the European market is still experiencing bookings and billings that remain at feverish levels. In August, the European book-to-bill ratio Stood at 1.37 compared with 1.00 in the United States. In 1984, DATAQUEST has predicted that European consumption will grow at an explosive 55 percent, compared with 18 percent the previous year.

The Japanese semiconductor industry is becoming increasingly global as a result of shifting economic and political trends. This session will examine the opening of Japanese manufacturing plants and design centers in the United States and Europe as well as the proliferation of joint ventures and licensing agreements by Japanese companies.

ECONOMIC OUTLOOK--WHAT WILL THE ELECTION'S IMPACT BE?

A. Gary Shilling President

Gary Shilling & Co., inc.

Dr. Shilling is President of A. Gary Shilling & Company, Inc., economic consultants to a number of financial institutions and industrial corporations. Previously, Dr. Shilling was Senior Vice President and Chief Economist of White, Weld & Co., Inc. His earlier experience included setting up the Economics Department at Merrill Lynch, Pierce, Fenner & Smith. Prior to that time, he was with Standard Oil Co. of New Jersey, where he was in charge of U.S. and Canadian economic analysis and forecasting. Dr. Shilling received his A.B. degree, magna cum laude, from Amherst College, where he was also elected to Phi Beta Kappa. He also received M.A. and Ph.D. degrees in Economics from Stanford University.




Dataquest






.C[Efe^T^ Dataquest

Dataquest

PERVASIVENESS—THE PERSPECTIVE REVISITED

Charles H. Phipps Vice President, Market Development

Semiconductor Group Texas Instruments Incorporated

Mr. Phipps is Vice President of Market Development in the Semiconductor Group of Texas Instruments Incorporated. Previously, he was responsible for the Corporate Office of Strategic Development at TI. Earlier, he was involved in the development of TI's integrated circuit business, initially as Marketing Manager, and then as Department Manager for MOS and Memories. Before joining Texas Instruments, he was a staff engineer for Military Engineering at Motorola, and a member of the Test Engineering Prograuns at General Electric. Mr. Phipps received a B.S. degree in Electrical Engineering from Case Institute of Technology and an M.B.A. degree from Harvard University.



Dataquest Incorporated, A Subsidiary of A.G. Nielsen Company / 1290 Ridder Parl< Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973

ABSTRACT

PERVASIVENESS - THE PERSPECTIVE REVISITED

Twenty years ago, integrated circuits were identified by P. E. Haggerty as revolutionary departure from prior electronic components. This development promised to remove the barriers to widespread applications of electronics, not only to industry, but to society as a whole. The term he used to describe this potential was "pervasiveness".*

Today, we face a future that promises the full blossoming of electronics pervasiveness. This opportunity will provide the potential for the integrated circuits market to continue to grow at a high rate for the next ten years.

While semiconductor technology is widely recognized as the driving force creating new electronics markets, it is sometimes overlooked that the semiconductor industry must also adjust to changes affecting its structure and strategies. Four current driving forces identified are: product complexity's impact on investment and timeliness of market entry; manufacturing technology trend to an operatorless environment; customer interface changes due to semicustom products and procurement cycle; amd international competition. The impact of these and other forces create new challenges to be addressed.

In closing, the requirements for electronics pervasiveness, as defined twenty years ago, are briefly revisited.

•Patrick E. Haggerty, Proceedings of IEEE. December, 1964

- 1 -


Dataquest

Dataquest

SYSTEMS DESIGN AT THE CHIP LEVEL

Douglas Ritchie Vice President, Consumer Specific Products Group


Dr. Ritchie is the vice President of National's Customer Specific Products Group. Previously he worked in management functions at Burroughs Con jany in San Diego, California. Dr. Ritchie holds a B.S. degree in Physics from Oregon State University and M.A. and Ph.D. degrees in Engineering/Applied Science from the University of California at Davis/Livermore.




IBTEGRATIBG SILICON ABD SYSTEM DESIGB

Douglas Ritchie Vice President, Customer Specific Products Group


I. Systems house environoment

A. The computer-aided-design (CAD) hierarchy

B. Challenges the system designer faces

1. Market windows 2. Time-to-market 3. Risk management 4. Technology selection 5. Vendor selection

II. Silicon house environment

A. The CAD system in the silicon house

B. Working with the "CAD Gap"

1. Gate arrays 2. Standard cells 3. workstations

III. Risk Management Tools

A, The semi-custom technology of gate arrays

B. Agreements between systems houses and silicon houses

- 1 -

Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Pari< Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973

SDHMARY OF TEE "CAD GAP"

A systems house can develop a v e r t i c a l l y i n t e g r a t e d CAD system extending down to a m u l t i p l i c i t y of s i l i con modules. The bulk Of the system house CAD system i s not in the s i l i c o n portion. The s i l i c o n vendor is i l l - a d v i s e d to attempt to upward i n t e g r a t e i n t o t o t a l CAD h i e r a r c h i c a l c h i p - b o a r d - s o c k e t -connector-backplane due to highly var iable choices made by a wide var ie ty of customers.

Therefore, the s i l i con vendor must look for a t ransportable "common denominator," Today, t h i s i s bes t seen in the semi-custom ga te a r ray module r e s i d e n t on a works ta t ion . This does not ensure a " w a l l - t o - w a l l systems des ign," but s t e p s in t h i s d i r e c t i o n . The s i l i c o n vendor must l e a r n t o p lug h igh "technology da tabase" in to the systems house CAD system in an ef fec t ive , unobtrusive way.

- 2 -


r • - ^ I

A TYPICAL HIERARCHICAL SYSTEM OF CAD MODULES

SYSTEM SIMULATION

i SUBSYSTEM

1 SIIStULATION

1 aOARD

SIMULATION [?Ci]

. 1

IMODULE S)MULATIOH

i SILICON OEUICE

SIMULATION

A

SlUCQN DEVICE DESIGN

MACRO LEVEL

MICRO LEVEL

1 ,

MICRO LEVEL OF CAD SIMULATION

PHYSICAL f^ODULES

SILICON DEVICE DESIGN

CIRCUIT MODELS

1 DEVICE MODELS

TEST DEVELOPMENT

MODULES

.

CIRCUIT LAYOUT

DEVICE DESIGN

PROCESS MODULES

MASK GENERATION

S National SemiconductDr'

- 3 -


SILICON DESIGNER CONCERNS INCLUDE

• Flexibility to Move with Evolving Technology

• Device and Process • CAD

• Ability to Predict the Results Accurately

• Consistently with Production Tools

• Designer Consistency

a National Semiconductor'

L

AN ENGINEER'S PROBLEM

—RISK MANAGEMENT-

Silicon Vendors Must Learn to be Responsive in Their Role in Helping to Control and Minimize the Risk Inherent in New Product Development Cycles.

2 National Semiconductor'

- 4 -


CORPORATE TRENDS THAT AFFECT

SILICON RISK MANAGEMENT

• More Power Vested in Central Procurement Functions

• More Technology Capabilities and Insights Available in Corporate Procurement

• Fewer Vendors

• Deeper Relationships

• "Pairing," Exchange Agreements

2 National Semiconductor

THE CAD GAP MACRO LEVEL

CAD MODULES-

MICRO LEVEL

3 NationaI Semiconductor ^—

SYSTEM SIMULATION INTENSIVE PORTION

DEVICE/MANUFACTURING INTENSIVE PORTION

- 5 -


INCREASING NEED FOR MODULARITY IN CAD

• Standards Will Become Important

• Allow/Support/Drive Innovation

• Allow Proprietary Work but in a Flexible Environment

• Allows More "Local Optimization"

• EDIF is an Example

a National Semiconductor •

DESIGN CYCLE TIMES

TIME IN MONTHS

24 -

22 -

20 -

18 -

16 -

14

12

10

8

6

4

2

0

N>Afl CUSTOM LSI/VLSI CIRCUIT

STANDARD CELL (CUSTOM)

GATE ARRAY CIRCUIT

DESIGN

'Approximate times to finish a design to point of mask fabrication.

a National Semiconductor ^ ^ - ^ ^ — ^ ^ ^ — ^ ^ ^ ^ ^ - ^ ^ ^ ^ —

- 6 -


TECHNOLOGY SELECTION CRITERIA

• Level of Technology/Capabilities

• Maturity of Technology

• Consistency with Design Needs

• Service and Support

• Availability of Alternate Sourcing

• Accessibility of Tools

2 National Semiconductor' J

UV/741

TECHNICAL RISKS IN ALTERNATE SOURCING

• Differences in Fab Facilities and Manufacturing Equipment

• Freedom of Choice • Process details • Hardware • Personnel • Style

• High Tech Solutions Increase These in Intensity


- 7 -


QUICK TURN AROUND SERVICE (QTA)

• Reduces Time to Market

• Allows Experimentation in New Product Design

• Allows Competitive Tracking During Extended Development Cycles

• Risk Management Tool


THE COMPETITIVE EDGE IN SILICON

1970'S Speed Density Features Cost

1980's Service Flexibility Tools Time to Market Adaptability to the Design Environment

Sa National Semiconductor •

- 8 -


Dataquest

Dataquest

DISTRIBUTION, A NEW ERA

John S. Abram Executive Vice President

Product Marketing and Management Arrow Electronics, Inc.

Mr. Abram is Executive Vice President for Product Marketing and Management at Arrow Electronics, Inc. He is also responsible for miscellaneous new ventures such as Canadian operations and semi--custom ic design services. Mr. Abram has more than 20 years of experience in the electronics industry, half of it in manufacturing and half in distribution.




Dataquest






Dataquest

SERVICING HIGH PERFORMANCE SYSTEMS DESIGNERS

Roger A. Smullen President and Chief Executive Officer Applied Micro Circuits Corporation

Mr. Smullen has been President and chief Executive Officer of Applied Micro circuits Corporation since 1982. Previously, he was Senior Vice President of Operations of Intersil Incorporated's semiconductor division; was a co-founder of National Semiconductor; and was a Director of Integrated Circuits at Fairchild Semiconductor. Mr. Smullen has a B.S. degree in Mechanical Engineering from the University of Minnesota.




SERVICING THE HIGH PERFORMANCE SYSTEM

DESIGNER

.^smm^

PERVASIVENESS PROMOTES TRANSITIONS

• ASIC's

• High Performance

• Service Orientation

- 1 -


THE LOGIC MARKET MOVING TOWARD SEMICUSTOM

$ Billions 8

6

4

2

SourcM: Dataquaal MackinletM OnesUet

1984 1988 O Semicustom ^sSM^tS

INEXORABLE TREND TOWARD HIGH PERFORMANCE

«•!•««• Operating *p«*4 Computer Syttoms

1,000.000

I960 1«70 iseo 1990

- 2 -

Dataquest Incorporated, A Subsidiary of A.C. Nielsen CorTipany /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973

THE SEMICUSTOM MARKET MOVING TOWARD HIGH PERFORMANCE

$ Billions 3

^m^n

SIX

•e«irea«i •••Ka/OfMK* DataîMtt MaekMoM

1984 1988 OHigh Performance .^GÔIS

SERVICE WILL BE KEY

*The More High Technology Around Us,

The More The Need For Human Touch."

John Natobitt ll«gatr«nd« 1 M 2

îSM^m

- 3 -


HIGH PERFORMANCE SYSTEM DESIGNER NEEDS

• High Speed Products

• Creative Semi-Custom Design Tools

• Pleasant Design Environment

• Rapid NRE Cycle

^m^^m

- 4 -


HIGH SPEED PRODUCTS

IHNI)

3O0

SOD

100

PrecMSor High P«rfen«ianc*

L«glc Array ^M^^

CREATIVE DESIGN TOOLS

SpacIal Logic

Silicon -Lovol Macros

jm^^m

- 5 -


RAPID NRE CYCLE

- 6 -


TODAY'S SERVICE SHORTFALL

• Narrow Product Unes

• Inflexible Design Interfaces

• Missed Delivery Commitments

• Multiple Contact Points

• Limited Macro Libraries

• Learn By Doing

• Standard Products Orientation

.^HM^m

- 7 -


BROAD LINE OF HIGH PERFORMANCE PRODUCTS

(WHll

• • •

f " A - Swflai

• • • • • > u ^

• • • • •

- t -B«r4«f

• > L - '

* C - tartai K

• • >

1000 2000 3000 4000 BOOO 6000

OMMity io«t*«) ,«saD«51(g(g

MULTIPLE DESIGN PATHS

CiMtenMr I EngkMcrtng I I Workstation I

AHCC Froduetlon

^m^i^

- 8 -


CONSISTENT MANUFACTURING PHILOSOPHY

• Proven Process Technology

• Fully Integrated Capability

• Capacity For Quick Turnaround

• Advanced Test And Measurement Equipment

SINGLE POINT OF CONTACT

- 9 -


UNCONSTRAINED MACRO CREATION

^ ^

STANDARD MACRO

UBRARY

V

r=r=r-

S F -"Ss,,^!/©

_^ « ^ ^ W M ^ B

• ^ * t f 4 f l ^

4 M t f * ' ^

I ^ M • fcj

• • » « « » - * «

* V * ^ B

1 * ^ w^tt^m l 4 * n B ^ l * * N ^ ^ ^ B h ^ B i < M b ^ » r ^ ^ ^ B » - ^ B

,

^ ^ ^ H O f e h ^ V

LA«lB tl«fa««

CUSTOM MACROS

:sr_

.^G^SO

- 10 -


SERVICE CULTURE

.^I^SO

CORPORATE COMMITMENT

• Semicustom

• Higli Performance

• Creative Design Soiutions

• Service

^m&m^

- 11 -

Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Teiex 171973

Dataquest

Dataquest

PROLIFERATION OF PRODUCTS AND SYSTEMS IN JAPAN

Jerry R. Crowley President and Chief Executive Officer

Oki Semiconductor

Mr. Crowley is a Director, President, and the Chief Executive Officer of Oki Semiconductor. He founded Oki in 1978, and was named a director of Oki America, inc., in 1984. Prior to joining Oki, Mr. Crowley was Director of Module products Operations at National Semiconductor Corporation, and prior to that, was Vice President of Marketing at Signetics Corporation. Mr. Crowley received a B.S.E.E. degree from San Diego State University, an M.S.E.E. degree from Arizona State University, and is currently an M.B.A. candidate at San Jose State University.




PERVASIVENESS: ITS TIME I S HERE

NEW SYSTEMS CREATE NEW VLSI OPPORTUNITIES

by JERRY R. CROWLEY PRESIDENT AND CHIEF EXECUTIVE OFFICER OKI SEMICONDUCTOR

Presented t o

1984 Semiconductor Industry Conference Dataquest

October 16 , 1984

Hotel Del Coronado San Diego , C a l i f o r n i a

- 1 -

Dataquest incorporated, A Subsidiary of A.C.Nieisen Company /1290 Ridder Pari< Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973

Good morning. On behalf of Oki management, le't me thank Howard Bogert and the Dataquest Semiconductor Industry Service for the invitation to speak about the proliferation of new VLSI devices in the growing Japanese systems market.

As a native San Diegan and as an engineering graduate of San Diego State, let me welcome you to "my town." What I'm going to talk about this morning is a fundamental concept: ZQMS. very laJLASi systems currently jmiiex development in JiSLS^R ILlll sipniflcantly drive And £iia££ new VLSI product And process developments

There are seven major electronic market segments of importance in the domestic Japanese market. Within each of these market segments, there are ongoing core systems developments. I would like to talk about two of those core systems and the VLSI products that will be needed to make the systems perform to plan.

I will draw some general conclusions and implications from the discussion of VSLI product and, finally, offer some suggestions as to how members of this audience might participate in the VLSI development race.

7 IMPORTANT JAPANESE MARKET SEGMENTS ^iZLSlilLS. 21

1. Video 2. Audio 3. Office Automation 4. Computing 5. Communications 6. Factory Automation 7. Automotive Electronics

In each of these market segments, there is ongoing work to develop subsystems and applications that will be needed for future domestic Japanese and export markets. Illustrative of in-place funding and development that will result in a pervasive VLSI product proliferation are Computing and Communications. Specifically, under the heading of Computing, the development of the Very Large High-Speed mainframe computer (5th generation) and, in the Communications arena, the I.N.S. (Integrated Network System).

- 2 -


XHQ MAJOR SYSTEMS (Figure 3)

1. Very Large High-Speed Mainframe Computer (4th and 5th generations)

2. Integrated Network System (I.N.S.)

Massive resources are being applied in Japan to bring these two concepts to reality. Even though there is common importance for the semiconductor manufacturer in their completion, the market forces funding them are different. The race to produce the large mainframe is fundamental to the computing power that Japan will need as a bridge into the age of information; and there is great interest, from a Japanese perspective, in assuring that this computing power be non-IBM dependent. Mote that the 4th and 4.5th generation computers are the classic Von Neuman-based machine and not the "Non-Von Neuman* array processor of the 5th generation project.

(Figure 4) The goal of artificial intelligence is to approach the ideal computer. Developments in artificial intelligence utilizing megabit RAMs, gallium arsenide logic circuits and recent breakthroughs in very high speed ECL circuitry are narrowing the gap between human and machine intelligence each year. The result of these Japanese strategic investments can be considered a dramatic achievement towards the age of the information society.

VLSI FOR THE 4TH JMJQ 5 l f l GENERATION CQMPDTERS ( F i g u r e 5)

1. IJLfi 1 megabit BLU.

Today we are on the threshold of the commercial emergence of the 256K DRAM. In the future, random access memory of between 1-4 megabits will be needed for the large high-speed mainframe computer contemplated. Process technology will be conventional, MMDS or CMOS. As with many of these needed VLSI products we will talk about, very fine line geometries must be achieved, and this has implications for the many circuits that will require x-ray lithography.

2 . L o g i c f o r ijifi C£fl

At the beginning, one nanosecond or slightly sub-nanosecond ECL logic will suffice for the CPU. As development continues towards speeds approaching 0.4 nanoseconds, new ECL logic designs will emerge. To achieve the targeted goal of 0.2 nanoseconds, logic fabrication will shift from a silicon base towards gallium arsenide.

- 3 -


3. Peripheral circuits

Peripheral circuitry to support the CPU and memory will be application-specific, produced via the standard cell method at a level of so-called wafer scale integration. CMOS, because of its inherent stability and low power requirements, will be used for fabrication of these devices.

4. Input/Output

CMOS will also be used for the I/O circuitry designed by standard cell techniques and wafer scale integration. These products will be full custom; however, the performance characteristics used in the definition of needed functions will, of necessity, be "loose" to achieve reasonably acceptable yields; so perhaps some measure of design standardization will emerge.

5. Data exchanye clrCUltS

Data transfer will be accomplished by optical methods. The very high speed circuits used will be implemented in gallium arsenide and later in very fine line geometry silicon.

6. j^Qice reco9nit lon c i r c u i t s

The man-machine interface for this large computer will require some form of voice recognition, probably using the high quality but memory-efficient ADPCM method. These functions will be produced as hybrids, initially, but will ultimately be accomplished on a single chip in silicon.

7. Large-storage memory

The data processing capacity of the large system that we have been describing will require a different form of storage memory. This will probably be optically based and may, in fact, be an extension of current laser disk technology. VLSI circuitry in this application will be limited to high speed drivers and controllers implemented in silicon.

Let these seven brief descriptions suffice to highlight the importance of this large computer project for all of us in the semiconductor arena. What about I.N.S.?

In this case, Japanese policy influentials have reached consensus that, to leverage and add value to information and knowledge, Japan must be one of the first nations to achieve a total digital network communications system. This digital network system

- 4 -


will connect office, home, and factory; it will be a fusion of communication and computation. It will have the capability of accumulating and processing and storing information, using telephones, video, facsimile, data terminals. Its general name is I.N.S., and like the large mainframe project, will be supported by digital technology and, most important, VLSI digital technology.

VLSI EQ& iNTEt5RATED MISQBL SYSTEM (Figure 6)

Potentially the largest market for new VLSI devices is the conversion of Japan's telephone system into the 100% digital integrated communication network system. The VLSI products used to implement the I.N.S. system are predominantly communication oriented.

1. Digital signal processor

This large chip (larger than today's standard MPU) will be produced with very fine line width and advanced CMOS technology. The D.S.P. will emulate a very large microprocessor unit whose performance will be dictated by the AT&T standards for speeds as high as 64K bits per second. This core product will require sub-1 micron geometries to achieve the high speed processing which is needed to send fixed frame information in one contiguous time slot.

2. Standard 32rb4t microprocessor

Common to many of the nodes within the home, office, and manufacturing environments will be a standard 32-bit microprocessor. The development of the processor will proceed along many paths; semiconductor manufacturers, mid-sized systems manufacturers, and such giants as IBM and AT&T will all develop proprietary architecture 32-bit machines; yet all will be application software compatible. It is our belief that, as development continues, one or two standard products will emerge and dominate around universal operating systems; it is a good bet that one of these operating systems will be UNIX based.

The processor, of course, will be a single chip CMOS device with on-chip cache memory and on-chip memory management. By today's standards, it will be a fairly large chip—almost 12 millimeter x 12 millimeter square, depending on the size of the cache memory. Power consumption will probably be one watt if line geometries are 1 micron or less; 1.5 watts if 1.5 micron geometries are used.

3. Optical interface circuit

As fiberoptic cable will be the hard link between subsystems within the I.N.S. scheme for office, factory, and home, it is

- 5 -


clear that very high speed optical interface circuitry will be required. Because of the speeds inherent in the system (10-30 giga Hertz) gallium arsenide, rather than silicon processors will be employed in fabrication. At least two standard products will probably emerge, based on speed requirements. A medium production volume very high speed product will be applied in the workplace; a very high unit volume, lower speed product will be produced for the home: information processing speeds in the home environment will be much lower. The high unit volumes will result from connecting all those homes.

4. Miciowaye Transmlt/Receiye inteiface I.N.S. will utilize microwave as a complementary information pathway. Critical to digital data capture and transmission will be a high frequency sense amplifier, initially designed as a hybrid but, with increased demand and utilization, produced as a single chip device. Driving long production runs and cost decline will again be the in-home application in Japan. These circuits will operate at a frequency of over 10 giga Hertz and, therefore, will be implemented in gallium arsenide.

5. U^iA encrvption processing ^uut

If access to information is to be totally ubiquitous, concerns over the security of data run high. This will force the emergence of a very high-speed data encryption and "decryption" solid-state device. The encryption algorhythm will be on-chip and, in a separate functional area, an EEPROM will be accessible by users who need to personally change the access code. As with many of our other examples, this will be a big chip by today's standards—l/2"Xl/2" or approximately 12 millimeters X 12 millimeters square. Coincidentally, this dimension may well become a standard size for all new microprocessor designs, as well as random logic.

6. Display SJLIH&L c o n t r o l l e r s

The usability of information accumulation in the I.N.S. system will depend upon the evolution of very high resolution flat panel color displays. These displays (LCD or electroluminescent) will be found in all three major environments; office, home, and factory, and for both fixed and portable access nodes. Because of the enormous number of displays projected, the display driver/controllers will become standard products produced in high volume in low-cost CMOS.

7. Protocol control/protocol conversion

Along the development pathway towards the merging or emerging of dominant local networic or wide area network protocols, the

- 6 -


interface between various system configurationsr architectures and information processing speeds will needr at the very least, sophisticated protocol control and, ideally, protocol conversion functions.

HOME COMMUNICATIONS SYSTEM (Figure 7)

The Japanese consumer is already looking to purchase these integrated network systems as soon as they become available. As a matter of fact, the prototype systems exist in Japan's Tokyo test market. It is called CAPTAINS, and the resulting proliferation of new, low-cost digitally-designed consumer products are starting to sell rapidly.

INDUSTRY COMMUNICATION SYSTEM (Figxire 8)

Conversion from hand-written Kanji methods of communication in Japanese space environments is accelerating; and use of facsimile, local area networking, and high-speed digital data transfer from office to office is being pursued by a number of large system companies, as well as the telephone monopoly, Nippon Telephone and Telegraph.

EXAMPLE QE. QLl ££LI££ (Figure 9)

Just in case you're not convinced that these systems and their associated VLSI devices are imminent, this slide shows some current examples of of wafer scale integration, imaging, and high density memory products. A generation of these chips will evolve that will be network independent, characterized by their high speed and CMOS fabrication. This photograph was produced for my speech to the financial community during March, 1984.

£ai£ SIZLS. El PDNCTIQN (Figure 10)

In order to give you a perspective, this slide shows the VLSI circuits in comparison to Oki's standard commodity, 64K dynamic random access memory, now celebrating its 4th year of production. The common attributes of these very large-scale devices are that they are:

1. Predominantly CMOS advanced processing (I know the 64K DRAM is N-MOSl)

2. Manufactured in highly automated (human-less) factories 3. Focused on specific applications which will appear in

the fourth and fifth generation computers, as well as the digital integrated network system boxes.

I stated in my opening comments that I would identify seven important Japanese market segments, discuss two product systems within the communications and computing field and their dependent VLSI devices, and would then draw some general conclusions and implications from these two areas.

- 7 -


CONCLDSIONS (Figure 11)

From our presentation today, three major conclusions can be reached:

1. The fourth and fifth generation computer development and the massive integrated network system will drive the VLSI process and product design technology in Japan.

2. To be a successful system manufacturer in these two areas, one must possess or have a partner who possesses the ability to create and manufacture, in yolumfif these incredible VLSI semiconductor products.

3. Japanese semiconductor makers believe that these applications are 100% assured and, therefore, their capital investments in technology development and factory automation to achieve them is seen as relatively risic free.

Think about that last statement for a moment—particularly if you have the investment decision responsibility for your company.

From the position of the United States system manufacturer or semiconductor manufacturer or investor, there are two possible outcomes:

1. With these VLSI products defined, the American semiconductor industry can move to design and mass-manufacture them for export to a large and growing Japanese merchant marketplace.

2. As an alternate course of action, the user, manufacturer, or financier can move towards some partnership arrangement with a Japanese semiconductor manufacturer, thus assuring a low-risk but high probability participation in these extraordinarily interesting arenas.

From the view of the Japanese marketplace, it is clear that "Pervasiveness—its time is here.*

- 8 -

Dataquest incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Pari< Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973

OKI Figure 1

SEVEN IMPORTANT JAPANESE MARKET SEGMENTS

1. Video 2. Audio 3. Office Automation 4. Computing 5. Communications 6. Factory Automation 7. Automotive Electronics

FiguT^e 2

OKI UHtrOKOlTTOII

- 9 -


TWO MAJOR SYSTEMS

Very Large High-Speed Mainframe Computer (4th and 5th Generations)

y^OKI Figure 3

THE IDEAL COMPUTER 10^' Memory Cells

Human Memory "Software' • Knowledge Processor • Language Processor • Reasoning

Nervous System/LAN • Recognition • Learning • Inference • Self-Education • Understanding

128-Bit + CPU

Pattern Recognition

Voice Recognition

OKI F1gur» 4

- 10 -


v ^

VLSI FOR THE 4TH AND 5TH GENERATION COMPUTERS

1 to 4 Megabit RAM Logic for the CPU Peripheral Circuits Input/Output Data Exchange Circuits Voice Recognition Large-Storage Memory

OKI • m n ^ U i i T O *

Figure 5

VLSI FOR INTEGRATED NETWORK SYSTEM

Digital Signal Processor Standard 32-bit Microprocessor Optical Interface Circuit Microwave Transmit/Receive Interface Data Encryption Processing Unit Display Driver Controllers Protocol Control/Protocol Conversion

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Figure 6

- 11 -


HOME COMMUNICATIONS SYSTEM

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- 12 -


Figure 9

OKI MEMORY CHIP SIZES BY FUNCTION

FUNCTION

64KDRAM •4K0RAM 2S6KOnAM 1 MEGABIT ROM

1 MEGABIT ROM 4 MEGABIT ROM 4 MEGABIT STATIC RAM

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MSM372S6 M8M28101 (3^) MSM28101 (SM)

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DEVELOPMENT

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25,168 mll2 45344 mil2

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- 13 -

OKI •BH CONDUCTOR


1

2

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CONCLUSIONS

4th & 5th Generation Computer Development and Integrated Network System Drive Japan's VLSI Process and Product Design Technology

Successful System Manufacturer Must Possess Ability to Create and Manufacture VLSI Semiconductor Products in Volume

Japanese Semiconductor Makers Believe These Applications and Their Capital Investments are Risk Free

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- 14 -


Li:L:£: I );;i:a D a t a q u e s t

Dataquest

ASICs COME OF AGE

Henri Jarrat President and Chief Operating Officer

VLSI Technology

Mr. Jarrat has been President and Chief Operating Officer of VLSI Technology, Inc. (VTI) since September 1983. Prior to joining VTI, he was Corporate Vice President and General Manager of the Bipolar Integrated Circuits group of Motorola Inc.'s Semiconductor Products sector. Mr. Jarrat also held several positions in the Electronic Devices Division of Texas Instruments. Mr. Jarrat received a Master's degree in Electrical Engineering and Solid State Physics from the university of Grenoble, France, and an M.B.A. degree from the tjniversity of Dallas.




APPLICATION SPECIFIC INTEGRATED CIRCUITS - COME OF AGE - SLIDE 1

TODAY I WOULD LIKE TO OFFER A PROGRESS REPORT ON ONE

OF THE MAJOR EMERGING MARKET SEGMENTS IN THE

SEMICONDUCTOR INDUSTRY --

APPLICATION SPECIFIC INTEGRATED CIRCUITS.

APPLICATION SPECIFIC INTEGRATED CIRCUITS - ASIC - SLIDE 2

SINCE THE TERM APPLICATION SPECIFIC INTEGRATED

CIRCUITS WAS COINED BY HOWARD B06ERT OF DATAQUEST

ALMOST 2 YEARS AGO, ITS USE TO DESCRIBE THIS MARKET

HAS BECOME WIDESPREAD - ALMOST UNIVERSAL. ALTHOUGH

THERE ARE MORE TECHNICAL DEFINITIONS OF THE ASIC

MARKET, I PREFER THIS ONE, WHICH DEFINES IT IN TERMS

OF COMBINED SYSTEM AND VLSI TECHNOLOGIES. THIS

SHARING OF TECHNOLOGY TO HEEJ SPECIFIC USER NEEDS IS

THE MOST IMPORTANT CHARACTERISTIC OF THE ASIC MARKET.

- 1 -


ASIC DESIGN ALTERNATIVES - SLIDE 3

THE ASIC MARKET CAN BE SEGMENTED BY DESIGN

TECHNOLOGY ALTERNATIVES.

FIRST, INTO TWO PIECES -- SEMICUSTOM AND CUSTOM,

DEPENDING ON THE NUMBER OF MANUFACTURING STEPS

REQUIRED TO COMPLETE THE CIRCUIT FROM THE POINT OF

USER DEFINITION.

THE SEMICUSTOM SEGMENT CAN BE FURTHER SUB-DIVIDED

INTO SIMPLER PROGRAMMABLE LOGIC DEVICES AND MORE

COMPLEX GATE ARRAYS.

THE CUSTOM SEGMENT CAN BE PARTITIONED INTO DESIGNS

BASED ON STANDARD BUILDING BLOCKS, AND HIGHER

DENSITY DESIGNS WHICH HAVE HISTORICALLY BEEN

DESCRIBED AS FULL CUSTOM. AS BUILDING BLOCKS AND

COMPILER APPROACHES GENERATE CELLS OF HIGHER AND

HIGHER DENSITY, WE EXPECT THE DISTINCTION BETWEEN

THESE TWO SUB-SEGMENTS TO BLUR.

- 2 -


APPLICATION CONSIDERATIONS - SLI,DE A

THE BEST ASIC DESIGN ALTERNATIVE DEPENDS ON THE

APPLICATIONS NEEDS OF A PARTICULAR SYSTEM.-

PROGRAMMABLE LOGIC DEVICES ARE THE EASIEST TO

APPLY. THESE USER PROGRAMMABLE DEVICES HAVE FOUND

WIDESPREAD APPLICATION IN INTEGRATING SSI AND MSI

LOGIC.

GATE ARRAYS OFFER A DENSITY IMPROVEMENT OVER

PROGRAMMABLE LOGIC THAT CAN BE USED FOR HIGHER

LEVELS OF LOGIC INTEGRATION. THE GATE TO PIN RATIO

OF MOST GATE ARRAY DEVICES MAKES THEM A GOOD CHOICE

FOR APPLICATIONS IN BUS ORIENTED OR I/O INTENSIVE

ARCHITECTURES.

AS INDICATED EARLIER. THE DISTINCTION BETWEEN

STANDARD CELLS AND CUSTOM DESIGN IS BECOMING

BLURRED. BOTH FROM A USER AND FROM A VENDOR'S POINT

OF VIEW. THESE DESIGN APPROACHES OFFER SUFFICIENT

DENSITY TO ALLOW SUBSYSTEMS OR EVEN COMPLETE SYSTEMS

TO BE IMPLEMENTED ON A SINGLE CHIP.

- 3 -


DESIGN-PRODUCTION COST TRADEOFFS - SLIDE 5

A RELATIVE INDICATION OF THE TRADE OFFS AMONG THESE

DESIGN ALTERNATIVES IN BOTH DESIGN TIME AND RELATIVE

COST PER GATE IS SHOWN HERE. PROGRAMMABLE LOGIC

DEVICES CAN BE DESIGNED MOST QUICKLY, BUT HAVE A

RELATIVELY HIGH COST PER GATE COMPARED WITH GATE

ARRAYS OR CELL BASED DESIGNS, WHICH TAKE LONGER TO

DEVELOP BUT ACHIEVE SUCCESSIVELY LOWER COSTS PER

FUNCTION.

AS THE OVERLAPS INDICATE, THE CHOICE OF A DESIGN

ALTERNATIVE IS NOT ALWAYS CLEARCUT.

- 4 -


WORLDWIDE ASIC - SLIDE 6

NO CHARACTERISTIC OF THE ASIC MARKET IS MORE

IMPRESSIVE THAN ITS RATE OF GROWTH AND THE SIZE IT

IS PROJECTED TO ATTAIN BY THE END OF THE DECADE. AS

SHOWN IN THIS DATAQUEST PROJECTION, THE MERCHANT

MARKET WILL GROW FROM $651M AT THE BEGINNING OF THIS

DECADE TO $11.931M BY 1990. THIS COMPOUND GROWTH

RATE OF 38Z IS WELL ABOVE THE 22Z PROJECTED FOR THE

SEMICONDUCTOR MARKET AS A WHOLE.

THE PROJECTED SIZE OF THE MERCHANT ASIC MARKET IN

1990 IS ROUGHLY THE SAME AS THE TOTAL MERCHANT IC

MARKET WAS ONLY THREE YEARS AGO.

- 5 -


HOW REALISTIC ARE THESE PROJECTIONS? - SLIDE 7

IF THESE PROJECTIONS ARE CORRECT, ASICS ARE NOT

MERELY AN EVOLUTION, BUT A REVOLUTION. IF ANNUAL

SALES OF ALMOST $12B ARE ACHIEVED, ANYONE WOULD

AGREE THAT ASIC HAS COME OF AGE.

BUT HOW REALISTIC ARE THESE PROJECTIONS? IS IT

LIKELY THAT A NEW MARKET CAN GROW AT THIS RATE FOR

SUCH A PERIOD OF TIME? CAN IT BECOME PERVASIVE

ENOUGH TO REACH SUCH A TOTAL SIZE? IN ANSWERING

THESE QUESTIONS, IT MAY BE USEFUL TO LOOK AT THE

LAST MAJOR ELECTRONICS REVOLUTION AS A PRECEDENT

THE MICROPROCESSOR REVOLUTION.

- 6 -

Dataquest Incorporated, A Subsidiary of A.G. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973

WORLDWIDE MICROPROCESSOR MARKET - SLIDE 8

ACCORDING TO DATAOUEST'S HISTORICAL AND PROJECTED

FIGURES, THE WORLDWIDE MICROPROCESSOR MARKET WILL

GROW FROM $25M IN 1975 TO $55A9M IN 1985, A

COMPOUND GROWTH RATE OF 82X OVER THE TEN YEAR

PERIOD. AS I WILL TRY TO DEMONSTRATE, THERE ARE

MANY STRIKING SIMILARITIES BETWEEN THESE TWO MARKETS

-- ENOUGH I BELIEVE, TO MAKE THE PROJECTED ASIC

MARKET GROWTH VERY ACHIEVEABLE.

- 7 -


HICROPRQCESSOR REVOLUTION - DRIVING FORCES - SLIDE 9

WHAT HAVE BEEN THE DRIVING FORCES BEHIND THE

EXPLOSIVE GROWTH OF THE MICROPROCESSOR MARKET? IN

THE BEGINNING, THE MICROPROCESSOR MARKET WAS CREATED

BY A COMBINATION OF USER NEEDS AND TECHNICAL

BREAKTHROUGHS. AS THE MARKET DEVELOPED, WE OBSERVED

A PROLIFERATION OF SUPPLIERS AND INCREASING Ef.PHASIS

ON DESIGN TOOLS AND CUSTOMER SUPPORT. MARKET GROWTH

WAS FUELED BY CONTINUED ENHANCEMENTS OF PRODUCTS AND

PROCESS TECHNOLOGY, AND BY THE EVOLUTION OF A CLOSE

RELATIONSHIP BETWEEN THE MICROPROCESSOR USER AND THE

MICROPROCESSOR VENDOR.

IN ORDER TO ESTABLISH WHETHER THE MICROPROCESSOR

MARKET IS A MEANINGFUL MODEL FOR THE ASIC MARKET,

LET'S LOOK IN MORE DETAIL AT EACH OF THESE DRIVING

FORCES AND SEE HOW THEY COMPARE WITH THE FORCES

DRIVING THE EVOLUTION OF THE ASIC MARKET.

- 8 -


SYSTEMS USER NEEDS - MICROPROCESSOR - SLIDE 10

THE MOST IMPORTANT DRIVING FORCES FOR ANY MARKET ARE

THE NEEDS OF THE USER. THE MICROPROCESSOR ADDRESSED

A NUMBER OF CRITICAL USER NEEDS. THE PROGRAMABILITY

OF THESE DEVICES ALLOWED SYSTEMS ENGINEERS TO

QUICKLY CREATE NEW PRODUCT CONCEPTS, AND BRING THEM

TO MARKET, WHILE AT THE SAME TIME IMPROVING THE

PRICE AND PERFORMANCE OF THE END PRODUCT. SINCE THE

MICROPROCESSOR TENDED TO REDUCE THE TOTAL COMPONENT

COUNT IN SYSTEMS OF EQUIVALENT COMPLEXITY,

MICROPROCESSORS TENDED TO IMPROVE THE RELIABILITY OF

ELECTRONICS SYSTEMS.

BECAUSE THE SOFTWARE WRITTEN FOR EACH APPLICATION

EMBODIED USER-PROPRIETARY SYSTEMS KNOWLEDGE,

MICROPROCESSOR BASED PRODUCTS COULD BE READILY

DIFFERENTIATED FROM COMPETITION AND PRODUCTS COULD

BE MARKETED ON THE BASIS OF THEIR DISTINCTIVE

FEATURES. SYSTEMS ENGINEERS BECAME INVOLVED IN

ADAPTING INTEGRATED CIRCUITS TO FIT PARTICULAR

APPLICATIONS.

- 9 -


SYSTEMS USER NEEDS - MICROPROCESSORS/ASIC - SLIDE 11

IN COMPARING THESE USER NEEDS WITH THOSE ADDRESSED

BY THE ASIC MARKET, HE FIND A STRIKING NUMBER OF

SIMILARITIES. ASIC PRODUCTS ADDRESS BOTH THE NEED

TO SHORTEN PRODUCT DEVELOPMENT AND TO IMPROVE PRICE

AND PERFORMANCE. LIKE THE MICROPROCESSOR, ASICS

ALSO TEND TO DECREASE THE TOTAL NUMBER OF INTEGRATED

CIRCUITS IN A SYSTEM, THEREBY INCREASING

RELIABILITY.

AS FOR DISTINCTIVE COMPETENCE, ASICS ALLOW SYSTEMS

ENGINEERS TO CREATE UNIQUE INTEGRATED CIRCUIT

BUILDING BLOCKS THAT CAN HELP THEIR COMPANIES TO

DIFFERENTIATE THEIR HARDWARE PRODUCTS FROM THOSE OF

THEIR COMPETITORS. NOT ONLY CAN THIS PROVIDE PRODUCT

PRICE AND PERFORMANCE ADVANTAGES IN THE MARKETPLACE,

BASED ON PRODUCT FEATURES, BUT IT ALSO PROTECTS

PROPRIETARY IDEAS SINCE THE ASIC CIRCUITS USED TO

IMPLEMENT THEM ARE NOT READILY COPIED.

- 10 -


MINDSET STORY - SLIDES 12A - 12H

AS AN EXAMPLE OF HOW ASICS CAN BE USED TO MEET SYSTEM USER NEEDS, LET'S

LOOK AT A RECENT EXAMPLE.

- 11 -

Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Park Drive / San Jose, GA 95131 / (408) 971-9000 / Telex 171973

THE CHALLENGE -- SLIDE 12A

ABOUT 15 MONTHS AGO MINDSET, THEN A NEWLY-FORKED

CORPORATION, FACED A CHALLENGE. THEY HAD SOKE

EXCELLENT IDEAS FOR BRINGING A COMPLETELY NEW LEVEL

OF GRAPHICS PERFORMANCE TO THE PERSONAL COMPUTER

ENVIRONMENT BUT THE COMPLEXITY OF THE HARDWARE

NECESSARY TO IMPLEMENT THESE IDEAS WAS FAR BEYOND

THE PACKAGING AND COST CONSTRAINTS OF THIS

MARKETPLACE.

JOINT DESIGN TEAM - SLIDE 12B

WHEN WE BROUGHT THAT CHALLENGE TO VTI, THE

RECOMMENDED SOLUTION WAS A JOINT DESIGN TEAM

CONSISTING OF TWO ENGINEERS FROM VTI, EXPERIENCED IN

IC DESIGN. AND THREE ENGINEERS FROM MINDSET WHO

THROUGHLY UNDERSTOOD THE NEW SYSTEMS CONCEPTS FOR

GRAPHICS PROCESSING THAT MINDSET WANTED TO IMPLEMENT.

- 12 -


DOUG AT WORKSTATION - SLIDE 12C

TO THIS JOINT EFFORT, VTI CONTRIBUTED ITS

PROPRIETARY IC DESIGN TECHNOLOGY.

COMPUTER CONTROLLED DIFFUSION FURNACES - SLIDE 12D

AND ITS WAFER PROCESSING TECHNOLOGY, WHILE MINDSET

CONTRIBUTED TO ITS UNDERSTANDING OF THE SYSTEM

HARDWARE AND SOFTWARE. THE RESULTS WERE IMPRESSIVE.

BUS TIMING ARBITRATOR - SLIDE 12E

THE FIRST FRUITS OF THIS JOINT EFFORT WAS A

BUS-TIMING ARBITRATOR TO CONTROL MEMORY ACCESS

BETWEEN THE 8086 PROCESSOR USED THE SYSTEM AND

GRAPHICS PROCESSOR WHICH PROVIDED HIGH PERFORMANCE

GRAPHICS.

- 13 -


PC GRAPHICS CONTROLLER CHIP -- SLIDE 12F

THE SECOND CHIP WAS A MICRO PROGRAMMED GRAPHICS

CONTROLLER WHICH IMPLEMENTED IN HARDWARE HAD VLSI

SPEED. FUNCTIONS PREVIOUSLY ACCOMPLISHED THROUGH

SOFTWARE. BOTH CHIPS WERE COMPLETED IN

APPROXIMATELY 5 MONTHS BY THE JOINT DESIGN TEAM AND

BOTH WORKED THE 1ST TIME.

- 14 -


THE SOLUTION - SLIDE 12G

THE RESULT WAS THAT TWO CHIPS THAT REPLACED ^50

INTEGRATED CIRCUITS SHOWN ON THESE FOUR WIRE WRAPPED

BREAD BOARDS. AS A RESULT, MIND'SET WAS ABLE TO

IMPLEMENT ALL OF THE FEATURES IN THEIR PROTOTYPE

S Y S T E M IN A BOX THAT MET THEIR COST AND PACKAGING

GOALS.

GRAPHICS - SLIDE 12H

UNFORTUNATELY, A STATIC PRESENTATION OF THIS TYPE

CANNOT DEMONSTRATE A 100-1 SPEED IMPROVEMENT IN

GRAPHICS PERFROMANCE, THAT THE MINDSET APPROACH

OFFERS OVER CONVENTIONAL SOFTWARE BASED APPROACHES

TO PERSONAL COMPUTER GRAPHICS.

- 15 -


SYSTEMS USER NEEDS -- SLIDE 13

HOW DID APPLICATION SPECIFIC IC'S DO IN MEETING THE

SYSTEMS USER NEED WE DEFINED EARLIER? IN TERMS OF

TIME TO MARKET, THE MINDSET PRODUCT WENT TO MARKET

ON TIME. THE SYSTEM WAS INTRODUCED LESS THAN A YEAR

AFTER THE IC DESIGN PROJECT STARTED. WE'VE ALREADY

TALKED ABOUT THE IMPROVEMENTS THAT MINDSET ACHIEVED

IN PRICE AND PERFORMANCE OF THEIR COMPUTER OVER

CONVENTIONAL APPROACHES. MORE IMPORTANTLY, THROUGH

THESE TWO APPLICATION SPECIFIC CIRCUITS, MINDSET HAS

BEEN ABLE TO ACHIEVE A DISTINCTIVE COMPETENCE AT THE

HARDWARE LEVEL OVER ITS COMPETITION. THE MINDSET

COMPUTER IS FAR MORE RELIABLE THAN ONE INCORPORATING

^150 IC'S FOR THE SAME PRODUCT AND THE MINDSET

SYSTEMS CONCEPT IS PROTECTED FROM COPYING THROUGH

THEIR PROPRIETARY CIRCUITS.

- 16 -


WELLINGTON STORY -- SLIDE 16A - 15C

THIS EXAMPLE ILLUSTRATES THE POWER OF APPLICATION

SPECIFIC INTEGRATED CIRCUITS TO INCORPORATE AN

ENTIRE SYSTEM ON A SINGLE CHIP AND THE INVOLVEMENT

OF THE CUSTOMER'S SYSTEM ENGINEERS AS SILICON

ARCHITECTS.

IN THIS CASE. WANG LABORATORIES WANTED TO INTEGRATE

A 16 BIT MICROPROCESSOR TO REDUCE THE SIZE AND COST

OF THIS SYSTEM WITHOUT SACRIFICING COMPATIBILITY

WITH A LARGE BODY OF EXISTING SOFTWARE. IN ORDER TO

ACCOMPLISH THIS OBJECTIVE. A JOINT DESIGN TEAM WAS

FORMED CONSISTING OF THREE WANG ENGINEERS WHO

THOROUGHLY UNDERSTOOD THE SYSTEM ARCHITECTURE AND

TWO VTI ENGINEERS WHO HELPED THEM INCORPORATE THEIR

IDEAS ON SILICON.

- 17 -


TECHNICAL BREAKTHROUGHS - MICROPROCESSORS/ASIC - SLIDE 15

THE EMERGING ASIC MARKETPLACE IS DRIVEN BY TWO

SIMILAR TECHNICAL FORCES. THE FIRST OF THESE IS

CONTINUING IMPROVEMENTS IN LSI AND VLSI PROCESS

TECHNOLOGY WHICH ALLOW AN EVER INCREASING NUMBER OF

SYSTEM FUNCTIONS TO BE IMPLEMENTED ON A ON A SINGLE

INTEGRATED CIRCUIT.

THE SECOND DRIVING FORCE IS THAT OF ADVANCED

SOFTWARE FOR COMPUTER AIDED DESIGN.

AS OUR INDUSTRY RESPONDS TO THE CHALLENGE

ARTICULATED BY HOWARD BOGERT A COUPLE OF YEAR.AGO,

WHICH IS TO COME UP WITH A 'VISICALC FOJLIC

DESIGNERS'. WE WILL SEE MORE AND MORE OF THE

WORLD'S 200,000 - 300,000 SYSTEMS ENGINEERS BECOMING

SILICON ARCHITECTS AND CREATING THEIR OWN

APPLICATION SPECIFIC INTEGRATED CIRCUITS. THAT'S A

KEY INGREDIENT TO THE EXPLOSIVE ASIC GROWTH.

- 18 -


TECHNICAL BREAKTHROUGHS - SLIDE 14

NEW ELECTRONICS MARKETS ARE USUALLY CREATED THROUGH

A COMBINATION OF USER NEEDS AND CORRESPONDING

TECHNICAL BREAKTHROUGHS THAT ADDRESS THOSE NEEDS.

MICROPROCESSORS WERE NO EXCEPTION. THE

MICROPROCESSOR PROVIDED A WAY TO EXPLOIT THE

EMERGING LSI PROCESS TECHNOLOGY BY CREATING HIGH

DENSITY NON-MEMORY DEVICES. THE IMPLEMENTATION OF A

PROGRAMMABLE DEVICE ON A SINGLE CHIP WAS A MAJOR

TECHNICAL BREAKTHROUGH. IT PERMITTED SYSTEMS

ENGINEERS TO WRITE SOFTWARE THAT ADAPTS AN

INTEGRATED CIRCUIT TO A PARTICULAR APPLICATION.

- 19 -


THE RESULTS IS A SINGLE CHIP THAT REPLACED SIX

CIRCUIT BOARDS CONTAINING OVER 1000 INTEGRATED

CIRCUITS. IN 53 WEEKS, BEGINNING FROM THE TIME WHEI

TRAINING OF THE WANG ENGINEERS STARTED, THIS TEAM

PRODUCED A CIRCUIT WHICH WORKED COMPLETELY ON THE

FIRST PASS AND WAS READY FOR PRODUCTION WITHIN 3

MONTHS.

TO ILLUSTRATE THE POWER OF THE NEW DESIGN TECHNOLOGY

THAT IS FUELING THE ASIC REVOLUTION, DESIGNS OF

SIMILAR COMPLEXITY CARRIED OUT BY MERCHANT

SEMICONDUCTOR VENDORS, TWO OR THREE YEARS AGO WOULD

HAVE REQUIRED PERHAPS 5 TIMES AS MANY PEOPLE FOR A

PERIOD TWICE AS LONG. OR IN OTHER WORDS, A FACTOR

OF 10 MORE RESOURCES TO COMPLETE THE SAME PROJECT.

THIS PRODUCTIVITY IMPROVEMENT IS THE RESULT OF

ADVANCED CAD TOOLS, WHICH IN TURN IS MAKING SYSTEMS

ENGINEERS SILICON ARCHITECTS.

- 20 -


PROLIFERATION OF SUPPLIERS - MICROPROCESSORS/ASIC - SLIDE 18

IN LOOKING AT THE ASIC MARKET WE SEE MANY PARALLELS

IN THE PROLIFERATION OF ASIC SUPPLIERS.

ALTHOUGH CUSTOM IC'S HAVE BEEN AROUND FOR A WHILE,

THE GROWTH OF THE ASIC MARKET WAS FUELED BY A NUMBER

OF START UP COMPANIES.

AS THE MARKET HAS GROWN, MOST OF THE MAJOR SUPPLIERS

HAVE ENTERED THIS MARKET OR HAVE ANNOUNCED PLANS TO

DO SO. ACCORDING TO DATAQUEST, THERE ARE NOW OVER

140 COMPANIES WORLDWIDE PROVIDING ASIC SOLUTIONS.

IN THE EARLY PHASES OF THE ASIC MARKET MOST OF ASIC

PRODUCTS WERE AVAILABLE ONLY FROM A SINGLE SUPPLIER

BUT RECENTLY HE HAVE OBSERVED A NUMBER OF SECOND

SOURCE AGREEMENTS.

- 21 -


PROLIFERATION OF SUPPLIERS - MICROPROCESSORS - SLIDE 17

AS THE MICROPROCESSOR MARKET DEVELOPED, WE SAW A

PROLIFERATION OF SUPPLIERS. INITIALLY THE MARKET

WAS ESTABLISHED BY NEW OR START UP COMPANIES,

NOTABLY INTEL AND ZILOG.

WHEN IT BECAME CLEAR THAT MICROPROCESSORS WERE NOT 'J.

JUST A- NICHE MARKET, MOST OF THE MAJOR SEMICONDUCTOR

SUPPLIERS GOT INTO THE ACT. FURTHER EVIDENCE OF THE

MATURING OF THIS MARKET WAS GIVEN BY SECOND SOURCE

AGREEMENTS AMONG SUPPLIERS TO PROVIDE ALTERNATE

SOURCES OF SUPPLY. IN ORDER TO EXPAND PRODUCT

FAMILIES THROUGH SHARED EFFORTS, SECOND SOURCING

AGREEMENTS WERE EXPANDED TO BECOME CO-DEVELOPMENT

PARTNERSHIPS.

ANOTHER NOTEWORTHY MILESTONE IN THE HISTORY OF THE

MICROPROCESSOR MARKET WAS THE EMERGENCE OF

DISTRIBUTION AS A MAJOR MARKET CHANNEL FOR BOTH

MICROPROCESSORS AND THEIR ASSOCIATED DEVELOPMENT

SYSTEMS.

- 22 -

Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Park Drive / San Jose, GA 95131 / (408) 971-9000 / Telex 171973

AS WITH MICROPROCESSORS, WE ARE ALSO SEEING THE

EMERGENCE OF PARTNERSHIPS TO DEVELOP AND BROADEN

ASIC PRODUCT LINE. AN EXAMPLE OF THIS IS A

CO-DEVELOPMENT AGREEMENT RECENTLY ANNOUNCED BETWEEN

FAIRCHILD AND VTI FOR THE EXTENSION OF A 2 MICRON

GATE ARRAY FAMILY.

WHILE THESE FOUR FEATURES SEEM TO PARALLEL SIMILAR

DEVELOPMENTS IN THE MICROPROCESSOR MARKET, IT MAY

YET BE TOO EARLY TO CLAIM THAT DISTRIBUTION WILL

PLAY THE SAME CRITICAL ROLE FOR ASIC AS IT DID FOR

MICROPROCESSORS. HOWEVER, WE ARE SEEING A GREAT

DEAL OF INTEREST FROM DISTRIBUTORS IN ASIC PRODUCTS

AND IN ASIC DESIGN CENTERS. AND I PREDICT THAT THE

DISTRIBUTORS HILL RESPOND TO THIS CHALLENGE AND WILL

BECOME A MAJOR FACTOR IN THIS MARKETPLACE.

- 23 -


DESIGN TOOLS - MICROPROCESSORS/ASIC - SLIDE 20

THE EMERGENCE OF HIGH PERFORMANCE 15 AND 32 BIT

MICROPROCESSORS, COUPLED WITH THE DEVELOPMENT OF

ADVANCED IC DESIGN SOFTWARE, HAS RESULTED IN THE

PROLIFERATION OF ASIC DESIGN WORKSTATIONS. ALTHOUGH

THESE ARE MORE COMPLEX AND MORE EXPENSIVE THAN THE

MICROPROCESSOR DEVELOPMENT SYSTEMS, THERE SEEMS TO

BE A PARALLEL HERE TOO.

AS WITH MICROPROCESSORS, THE EARLIEST VLSI DESIGN

WORKSTATION SOFTWARE WAS SUPPLIED BY ASIC VENDORS.

JUST AS HE OBSERVED VENDOR INDEPENDENT DEVELOPMENT

SYSTEMS COMING INTO THE MICROPROCESSOR MARKET, WE

ARE ALSO NOW SEEING THE ADVENT OF INDEPENDENT

CAE/CAD WORKSTATIONS SUCH AS THOSE AVAILABLE FROM

- 24 -


DESIGN TOOLS - MICROPROCESSORS - SLIDE 19

ANOTHER NOTEWORTHY FEATURE IN THE EMERGENCE OF THE

MICROPROCESSOR MARKET WAS THE IMPORTANCE OF DESIGN

TOOLS.

INITIALLY THESE DESIGN TOOLS WERE SUPPLIED ALMOST

EXCLUSIVELY BY THE MICROPROCESSOR VENDORS BUT LATER

WE SAW THE ADVENT OF VENDOR INDEPENDENT DEVELOPMENT

SYSTEMS SUCH AS THOSE AVAILABLE FROM HEWLETT PACKARD

AND FROM TEKTRONIX.

AS THIS TABLE SHOWS> THE NUMBER OF INSTALLED

MICROPROCESSOR DEVELOPMENT SYSTEMS BETWEEN 1975 AND

1985 HAS BEEN A LEADING INDICATOR OF THE GROWTH IN

THE SILICON SIDE OF THIS MARKETPLACE.

- 25 -


DAISY, MENTOR, AND VALID LOGIC.

CLOSELY RELATED TO THIS IS WORK GOING ON NOW IN THE

DEVELOPMENT OF A VENDOR INDEPENDENT INTERCHANGE

STANDARD, EDIF, WHICH SHOULD FURTHER ACCELERATE THE

GROWTH OF THE ASIC MARKET.

IN THIS TABLE WE SEE THAT THE NUMBER OF INSTALLED

ASIC WORKSTATIONS IS EXPECTED TO GROW FROM ABOUT

1000 IN 1985 TO OVER 50,000 IN 1990. INTERESTINGLY,

THE PROJECTED GROWTH FOR WORKSTATIONS IN THE 5 YEAR

PERIOD 1985-1990 IS GREATER THAN THAT FOR

MICROPROCESSOR DEVELOPMENT SYSTEMS IN THE 10 YEAR

PERIOD 1975 - 1985.

- 26 -


CUSTOMER SUPPORT - MICROPROCESSORS - SLIDE 21

SINCE THE MICROPROCESSOR MARKET HAS BASED ON NEW

TECHNOLOGIES, TRAINING AND CUSTOMER SUPPORT WERE

CRITICAL TO ITS GROWTH.

TRAINING WAS INITIALLY ESTABLISHED BY THE

MICROPROCESSOR VENDORS, THEN BY CONSULTANTS AND NOW

NEARLY EVERY ELECTRICAL ENGINEERING GRADUATE HAS

COMPLETED AT LEAST ONE CLASS IN MICROPROCESSOR

APPLICATION.

IN DEVELOPING MICROPROCESSOR BASED DESIGNS, MOST

CUSTOMERS FOUND THAT THEY NEEDED LOCAL TECHNICAL

SUPPORT AND THIS NEED HAS MET THROUGH THE

ESTABLISHMENT OF EXTENSIVE FIELD APPLICATIONS

ENGINEERING FORCES BY THE MAJOR MICROPROCESSOR

SUPPLIERS AND DISTRIBUTORS.

- 27 -


CUSTOMER SUPPORT - SLIDE 22

IF ANYTHING, THE TECHNICAL SOPHISTICATION OF THE

ASIC MARKETPLACE IS EVEN GREATER THAN THAT OF

MICROPROCESSORS. FOR THAT REASON, TRAINING AND

LOCAL SUPPORT ARE PERHAPS MORE CRITICAL TO THE

SUCCESS OF THIS REVOLUTION.

ASIC TRAINING WAS INITIALLY PROVIDED BY VENDORS,

S E V E R A L ' O F W H O M O F F E R EXTENSIVE TRAINING PROGRAMS.

WE ARE NOW BEGINNING TO SEE THE EMERGENCE OF ASIC

ORIENTED COURSES IN SOME OF THE LEADING UNIVERSITIES

AND WE EXPECT MANY MORE RELATED COURSES AND MORE

PARTICIPATING UNIVERSITIES, BY THE END OF THE DECADE.

IN ADDITION TO FIELD APPLICATIONS ENGINEERS, ASIC

SUPPLIERS ARE PROVIDING IN-DEPTH LOCAL SUPPORT

THROUGH DESIGN CENTERS. THERE ARE ALREADY ABOUT 220

ASIC DESIGN CENTERS WORLDWIDE INCLUDING

VENDOR-FUNDED CENTERS, USER CAPTIVE DESIGN CENTERS

IN MAJOR SYSTEMS HOUSES CUSTOMERS AND AN EMERGING

AND RAPIDLY GROWING NUMBER OF INDEPENDENT THIRD

PARTY ASIC DESIGN COMPANIES. AS A PART OF THEIR

ASIC STRATEGY, DISTRIBUTORS ARE ALSO OPENING DESIGN

CENTERS.

- 28 -


OLIVE STORY - SLIDE 23A - 23B

IN THIS EXAMPLE, OLIVETTI SHARED SYSTEM AND VLSI

TECHNOLOGY THROUGH AN IN-HOUSE JOINT DESIGN CENTER

TO IMPLEMENT NEW FEATURES AND REDUCE THE COSTS OF

THIS ADVANCED ELECTRONIC TYPEWRITER.

- 29 -


TECHNOLOGY ENHANCEMENT - MICROPROCESSORS - SLIDE 2 )

FURTHER GROWTH OF THE MICROPROCESSOR MARKET WAS

FUELED BY RAPID ONGOING IMPROVEMENTS IN PRODUCTS AND

TECHNOLOGY. THIS TOOK THE FORM OF INCREASING

INTEGRATION AS MICROPROCESSORS WENT FROM H BITS TO 8

TO 16 TO TODAYS POWERFUL 32 BIT MICROPROCESSORS.

TECHNOLOGY ENHANCEMENT ALSO RESULTED IN HIGHER

PERFORMANCE AND IN THE AVAILABILITY OF ON CHIP

MEMORIES SUCH AS RAM, ROM, AND EPROM, WHILE COST PER

FUNCTION DECLINED. RECENTLY THE NEED FOR HIGHER

INTEGRATION AND LOWER POWER HAS RESULTED IN A

PRONOUNCED TREND TOWARDS CMOS FOR MOST NEW

MICROPROCESSOR DESIGNS.

- 30 -


TECHNOLOGY ENHANCEMENT - MICROPROCESSORS/ASIC - SLIDE 25

AGAIN THERE APPEARS TO BE A STRONG PARALLEL IN THE

TECHNOLOGY EVOLUTION OF MICROPROCESSORS AND ASICS.

THE PROGRESSION FROM PROGRAMMABLE LOGIC ARRAYS TO

GATE ARRAYS TO STANDARD CELL DESIGN TO SILICON

COMPILERS WILL RESULT IN INCREASING LEVELS OF

INTEGRATION AND SOPHISTICATION FOR ASIC PRODUCTS.

SMALLER GEOMETRIES AND MORE EFFICIENT

INTERCONNECTION SYSTEMS ARE MAKING ASIC PRODUCTS

THAT OPERATE AT HIGHER AND HIGHER SPEEDS. WE ARE

NOW WITNESSING THE EMERGENCE OF TECHNOLOGIES THAT

PERMIT ON BOARD MEMORIES INCLUDING RAMS, ROMS, AND

EPROMS. AS THE MARKET MATURES, WE ARE SEEING

DECREASING COSTS PER FUNCTION, AND CMOS IS CLEARLY

THE DOMINANT PROCESS TECHNOLOGY FOR THE ASIC

MARKETPLACE.

THE LAST TECHNOLOGY ENHANCEMENT ON THIS SLIDE -

ME6ACELLS - IS REALLY AN INDICATION OF THE

CONVERGENCE OF THE MICROPROCESSOR AND ASIC

TECHNOLOGY.

- 31 -


MEGACELLS - SLIDE 26

AS SHOWN HERE, MEGACELLS CREATE LARGE SCALE BUILDING

BLOCKS THAT ALLOW EFFICIENT INTEGRATION OF MANY LSI

FUNCTIONS ONTO A SINGLE VLSI CHIP. THESE FUNCTIONS

CAN INCLUDE MICROPROCESSORS AND THEIR ASSOCIATED

PERIPHERALS AS HELL AS BUILDING BLOCKS FOR

COLLECTING SO CALLED RANDOM LOGIC. IN THIS DIAGRAM

HOST OF THE MAJOR ELEMENTS OF MANY MICROPROCESSOR

BASED SYSTEMS CAN BE IMPLEMENTED ON A SINGLE CHIP.

THESE INCLUDE THE MICROPROCESSOR ITSELF, THE I/O

CONTROLLER, A CRT CONTROLLER, SOME RANDOM 'GLUE'

LOGIC, AND A TIMER.

- 32 -


USER/VENDOR INTERFACE - MICROPROCESSORS -- SLIDE 27

FINALLY, THE MICROPROCESSOR MARKET WOULD NOT HAVE

EVOLVED OR GROWN SO RAPIDLY WITHOUT THE EMERGENCE OF

A NEW-USER VENDOR INTERFACE. IN THE MICROPROCESSOR

ERA, SEMICONDUCTOR VENDORS HAVE SUPPLIED THE RAW

TECHNOLOGY IN TERMS OF INCREASINGLY SOPHISTICATED

MICROPROCESSORS, WHILE USERS HAVE SUPPLIED THE

SYSTEMS KNOW-HOW IN THE FORM OF SOFTWARE TO PUT

THESE MICROPROCESSORS TO WORK.

TO A GREATER DEGREE THAN WE HAVE SEEN WITH OTHER

FORMS OF INTEGRATED CIRCUITS, A STRONG MUTUAL

LOYALTY HAS DEVELOPED BETWEEN MICROPROCESSOR USERS

AND VENDORS. USERS TEND TO CHOSE MICROPROCESSORS

FROM THE SAME VENDOR THAT THEY HAVE WORKED WITH

BEFORE AND TEND TO BUY THE SILICON FROM THE SAME

VENDOR THAT HAS PROVIDED DESIGN SUPPORT. IN

RECOGNITION OF THIS, VENDORS HAVE WORKED HARD TO

SUPPLY AN ADEQUATE FLOW OF MICROPROCESSOR

COMPONENTS.

USERS HAVE ALSO BEEN GIVEN A GREAT DEAL OF DESIGN

HELP TO USE CURRENT AVAILABLE MICROPROCESSOR

PRODUCTS AND THEY HAVE BEEN GIVEN AN UNUSUALLY

DETAILED VIEW IN THE FUTURE PRODUCT PLAN FOR MOST

NEW MICROPROCESSOR PRODUCTS.

- 33 -


USER/VENDOR INTERFACE - MICROPROCESSOR/ASIC - SLIDE 28

THIS TREND TOWARD A STRONGER USER-VENDOR INTERFACE

ALSO APPEARS APPLICABLE TO THE EMERGING ASIC

MARKET.

AGAIN THE ASIC VENDORS ARE APPLYING RAW TECHNOLOGY

IN THE FORM OF DESIGN TOOLS, AND PROCESS, WHILE

USERS ARE SUPPLYING THE SYSTEMS TECHNOLOGY THAT PUTS

THESE TO WORK IN A PARTICULAR APPLICATION. THE

SYNERGISM OF THIS PARTNERSHIP IS ONE OF THE MOST

IMPORTANT ASPECTS OF THE ASIC REVOLUTION.

AS WITH MICROPROCESSORS, THERE APPEARS TO BE A

STRONG DEGREE OF MUTUAL LOYALTY BETWEEN ASIC USERS

AND THEIR VENDORS.

- 34 -


HOWEVER THE ASIC MARKET ADDS ANOTHER DIMENSION TO

THE USER-VENDOR RELATIONSHIP. WHEREAS DESIGN

ASSISTANCE FOR MICROPROCESSORS COULD BE SUPPLIED IN

A GENERIC WAY WITHOUT THE VENDOR BECOMING HEAVILY

INVOLVED IN THE DETAILS OF THE USER SYSTEM, ASIC

CIRCUITS OFTEN INVOLVE JOINT DESIGN PROJECTS IN

WHICH THE ASIC VENDOR MUST REVEAL A GREAT DEAL ABOUT

CAD AND PROCESS TECHNOLOGIES, AND THE SYSTEMS

SUPPLIER MUST REVEAL A GREAT DEAL ABOUT HIS

PROPRIETARY SYSTEM CONCEPTS. OUT OF THIS HAS GROWN

A STRONG DEGREE OF MUTUAL TRUST BETWEEN VENDOR AND

IJSER IN THE ASIC MARKETPLACE.

MAINTAINING THE HIGHEST DEGREE OF INTEGRITY IN

DEALING WITH CONFIDENTIAL INFORMATION IS PARAMOUNT

TO THE SUCCESS OF THE ASIC COMPANIES.

- 35 -


APPLICATION SPECIFIC SYSTEM SOLUTIONS - SLIDE 29

THIS COOPERATION IS THE REAL FORCE DRIVING THE

EMERGENCE OF THE ASIC MARKET. THROUGH APPLICATIONS

SPECIFIC INTEGRATED CIRCUITS WE CAN COMBINE ADVANCED

SYSTEMS IDEAS WITH KNOWLEDGE OF CIRCUIT DESIGN AND

PROCESS DESIGN TO ACHIEVE RESULTS THAT ARE TRULY

SYNERGISTIC. BUT BRYOND THE TECHNOLOGY SYNERGY,

THERE IS THE CUSTOMER-VENDOR TEAM SYNERGY..

A TRUE PARTNERSHIP

THE HALLMARK OF ASIC IN THE FUTURE.

- 36 -

Dataquest Incorporated, A Subsidiary of A.C. Nielsen CoITipany / 1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973

HICROPROCESSOR/ASIC REVOLUTION - DRIVING FORCES - SLIDE 30

IN SUMMARY THEN, IT APPEARS REASONABLE TO DRAW

PARALLELS IN THE GROWTH OF THE MICROPROCESSOR MARKET

AND THE GROWTH OF THE ASIC MARKET, BASED ON THE

FORCES THAT ARE DRIVING THE TWO MARKETS. IN THE

ASIC BUSINESS, WE HAVE SEEN STRONG DRIVING FORCES IN

THE FORM OF USER NEEDS AND SUPPORTING TECHNICAL

BREAKTHROUGH. WE ARE OBSERVING THE PROLIFERATION OF

SUPPLIERS. WE ARE SEEING THE SAME SIGNIFICANCE

ATTACHED TO DESIGN TOOLS AND LIKE THE MICROPROCESSOR

SUPPLIERS, ASIC VENDORS ARE PROVIDING HIGH LEVELS OF

CUSTOMER SUPPORT. THE RATE OF TECHNOLOGY

ENHANCEMENT CONTINUES TO BE VERY RAPID IN THE ASIC

MARKET AND HOST IMPORTANTLY WE ARE SEEING THE

EMERGENCE OF AN EXTREMELY CLOSE USER-VENDOR

INTERFACE.

- 37 -


TWO REVOLUTIONS - SLIDE 31

I HOPE I HAVE CONVINCED YOU THAT THERE ARE A REMARKABLE NUMBER OF

SIMILARITIES BETWEEN THE BY NOW HISTORICAL MICROPROCESSOR REVOLUTION, AND

THE ONGOING ASIC REVOLUTION.

WE'RE ALMOST HALF WAY THROUGH THE DECADE. HOW ARE WE DOING SO FAR?

COMPARED WITH THE FIRST FIVE YEARS IN MICROPROCESSORS, OUR GROWTH RATE IS

CONSIDERABLY LOWER, BUT THE MARKET IS MUCH LARGER. FOR THE NEXT FIVE

YEARS, THE ASIC GROWTH RATE PROJECTED IS WELL BELOW THE MICROPROCESSOR

GROWTH RATE FOR THE LAST FIVE YEARS. GIVEN THE SIMILARITIES OF DRIVING

FORCES, AND THE SIMILAR PERVASIVENESS ACROSS NEARLY ALL IC APPLICATIONS,

ONE MIGHT EVEN CONCLUDE THAT THE ASIC GROWTH PROJECTIONS ARE CONSERVATIVE!

THANK YOU.

- 38 -


(:i:aDataquest

Dataquest

APPLICATIONS, THE FUEL OF PERVASIVENESS

Kenneth V. McKenzie Associate Director, Semiconductor Group


Mr. McKenzie is Associate Director of DATAQUEST's Semiconductor industry Service. He is responsible for all research activities on semiconductors and related publications. During Mr. McKenzie's 14 years in the electronics industry, he has held management positions in both design engineering and marketing. Previously, he was Marketing Manager at Zilog, Incorporated, and was Marketing Manager for 8-bit microprocessors at Intel Corporation.




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APPLICATIONS

THE FUEL OF PERVASIVENESS

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KEN MCKENZIE Associate Director

Semiconductor industry Group Dataquest incorporated

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INTEGRATED CIRCUIT CONSUMPTION

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BUILDING THE INDUSTRY FOUNDATION

• PRODUCT EVOLUTION

• DISPLACEMENT MARKETING

• "GOLDEN RECORDS"

• USER ACCEPTANCE

- 2 -O 1984 Dataquest Incorporated Oct . 15 ed . -Rep roduct ion P r o h i b i t e d


BUILDING THE INDUSTRY FOUNDATION isesms»

1960-1980 THE DISPLACEMENT ERA

• 20 YEARS AGO. DISCRETE = 95% OF TAM

• 10 YEARS AGO. ICs = 46% OF TAM

• MICRO MARKET IS ONLY 10 YEARS OLD

• DISPLACEMENT OF TTL LIMITED BY SPEED

BUILDING THE INDUSTRY FOUNDATION "I.H'JM-iLW.Y, £«°«a»

1960-1980 THE DISPLACEMENT ERA

APPLICATIONS

• "DUMB" CRT TERMINALS

• ELECTRONIC SCALES

• "SMART" GAS PUMPS

• POINT-OF-SALE TERMINALS



APPLICATIONS - THE FUEL OF PERVASIVENESS agmwaaaaaaa

DEVELOPING THE TOOLS FOR GROWTH

• RELIABLE PRODUCT

• FUNCTIONAL SYSTEMS INTEGRATION

• USER APPLICATION SUPPORT

• MARKET-DRIVEN PROCESS TECHNOLOGY

• PREDICTABLE FACTORIES

DEVELOPING THE TOOLS FOR GROWTH <aac3aBeaaaexi

1980-1985 SUCON - THE MEDIA FOR SYSTEMS DEVELOPEMENT

• PRACTICAL DESIGNER WORKSTATIONS

• HARDWARE/SOFTWARE SYNERGY

• THE USER DRIVES THE MARKET

• APPLICATIONS TECHNOLOGY

• APPLICATION-SPECIFIC ICs



DEVELOPING THE TOOLS FOR GROWTH

1980-1985 TRANSITION TO THE INFORMATION AGE

APPLICATIONS

• THE OFFICE PERSONAL COMPUTER

• ELECTRONIC HOME ENTERTAINMENT

• CAD WORKSTATIONS

• VOICE/DATA INTEGRATION

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DEVELOPING THE TOOLS FOR GROWTH attwaaaawfii'KwwMBwwaaBttt ii'^IIiw ,nj>',t'nir»in;i,"xwi»MaB'wwttiinFjIiOT»wi

1980-1985 TRANSITION TO THE INFORMATION AGE

• MEETING THE JAPANESE CHALLENGE

• MARKET-DRIVEN PRODUCT PLANNING

• USER/VENDOR RELATIONSHIPS

• FACTORY AUTOMATION

• APPLICATION-SPECIFIC ICs



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APPLICATIONS FOR GROWTH

1985—^

• COMMUNICATIONS

• COMPUTER

• CONSUMER

• GOVERMNENT/MILITARY

• INDUSTRIAL

• TRANSPORTATION

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APPLICATIONS FOR GROWTH

1985—«-THE SILICON "ENGINE"

• HARDWARE/SOFTWARE TRANSPARENCY

• GENERIC I/O

• HUMAN MODELING (AD

• CONSULTIVE PROCESSING



CONSUMPTION ($) BY END USE P D C o r t n O F nrtticET

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1985—* COMMUNICATION APPLICATIONS

• INTEGRATED VOICE/DATA/GRAPHICS

• USER-IMAGE SECURITY

• CELLULAR MOBILE TELEPHONE



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1985—^ COMPUTER APPLICATIONS

• TRANSPARENT VIRTUAL PROCESSORS

• VOICEPRINT USER PASSWORD SYSTEMS

• REAL-TIME CONCURRENCY

• NON-DIGIT HUMAN INTERFACE

• OPTICAL STORAGE

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1985—^ CONSUMER APPLICATIONS

• "SMART" CREDIT CARD

• ALL-ELECTRONIC STILL CAMERA

• HOME ENVIRONMENT SYSTEM

• HOLOGRAPHIC ENTERTAINMENT



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1985—^ GOVERNMENT/MILITARY APPLICATIONS

• REUSABLE SPACE SYSTEMS

• HEALTH CARE

• FAA SAFETY/CONTROL

• HIGHWAY/TRANSIT SYSTEMS

• "CS" DEFENSE SYSTEMS

APPLICATIONS FOR GROWTH iiw.n.'.Af.i.'.ufj.A.'.i:' tMIi»XS»

1985—«-INDUSTRIAL APPLICATIONS

• MOTOR CONTROLS

• ENERGY MANAGEMENT/POWER SUPPLIES

• PROCESS CONTROL/INSPECTION SYSTEMS

• ROBOTICS

• MEDICAL MONITORING/CONSULTATION



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1985—^ TRANSPORTATION APPLICATIONS

• "SMART" CAR ENGINE

• PERSONAL AUTO SECURITY SYSTEM

• DIAGNOSTIC MONITOR/SCHEDULER

• "HEADS-UP" DRIVER DISPLAY CONSOLE

• CRASH-AVOIDANCE SYSTEM

1985 — "SMART" CREDIT CARD

• SINGLE. ALL-ACCOUNT DEVICE

• BUILT-IN SECURITY SYSTEM

• MEDICAL HISTORY AND MILITARY ID

• PASSPORT AND LOCAL CURRENCY CONTROL

• AUTOMOBILE SECURITY INTERLOCK



rMPACT OF FUTURE APPLICATIONS I I IIII ii'iiii I I III! I II > I I I I mill IIII II I I I I II

1985—«-TOUCH-SENSITIVE CLOTHES IRON

• AUTOMATIC TURN-ON BY TOUCH

• INACTIVE FOR 10 MINUTES - SHUTS OFF

• LOWER ENERGY CONSUMPTION

• ELIMINATES MAJOR CAUSE OF FIRES

• BUILT-IN TEMP CONTROL

IMPACT OF FUTURE APPLICATIONS

1985—^ "SMART" CAR ENGINE

• ELECTRONIC VALVES (NO CAM)

• INTEGRAL FUEL INJECTION

• COMPUTER IGNITION (NO DISTRIBUTOR)

• VARIABLE POWER CURVING/EMISSIONS

• SELF-DIAGNOSTICS/SERVICE



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1 9 8 5 — * ALL-ELECTRONIC STILL CAMERA

• DIGITAL STORAGE REPLACES FILM

• FRAME-BY-FRAME ASA CONTROL

• ON-BODY COLOR BALANCE/FILTERING

• HOME COMPUTER EDITING/'BRUSHING"

• ELECTRONIC IMAGE TRANSMISSION

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1985—«-MODELING CAD WORK STATION

• SYSTEM LEARNS FROM THE USER

• VOICE I/O FOR THE "THIRD HAND"

• PRODUCTIVITY LEVERAGE

• MAN/MACHINE SYNERGY

• REVERSE OBSOLESENCE

- 12 -O 1984 Dataquest Incorporated Oct . 15 ed. -Reproduct ion Prohib i ted


APPLICATION - THE FUEL OF PERVASIVENESS

APPLICATIONS FOR GROWTH • END-USE MARKETING • PRODUCT PLANNING TECHNOLOGY

• THE "SOFT" DATA CATALOG

• INTERNATIONAL CHALLENGES

• "WHAT BUSINESS ARE WE IN?"



Dataquest

Dataquest

HIGHLY INTEGRATED SYSTEMS

Jon Cornell Senior Vice President and Sector Executive


Mr. Cornell is Senior Vice President and Sector Executive of Harris Semiconductor's Sector. Previously, he was Director of Analog Operations, Vice President of Analog Operations, and the head of Harris' Products Group. He joined Harris in 1968 as an Associate Principal Engineer. Mr. Cornell attended Rensslaer Polytechnic Institute and received a B.S. degree in Physics from Wichita State University. He later received a Master's degree in Electrical Engineering from the University of South Florida in Tampa.




HIGHLY INTEGRATED SYSTEMS: A Convergence of Key Technologies

Jon E. Cornell Senior Vice President, Sector Executive Harris Corporation, Semiconductor Sector

The history of electronics can be characterized as a quest for higher levels of integration per unit volume and lower costs per function.

SLIDE ONE — [Progress chart with past five phases, HIS phase]

Looking at that progress over the last half century or so, there are five major phases of progress and each began at a time when the then current technology was reaching limiting barriers. In every instance, the beginning of a new phase marJced industry advancement toward production of a more integrated device than was possible in the previous phase.

And those five phases were all the result of a radical new technology introduction that revolutionized the design of future systems.

Our industry is now on the very threshold of another significant phase that is not the result of a revolutionary new product or process, but rather the convergence of three important and evolving technologies. More importantly, while the old progression was toward more integrated components, this next phase will move toward more highly integrated systems.

And the impact'of integrating systems is great — we can again make real strides in reducing overall system size, decreasing

- 1 -


significantly the cost-per-function and marlcedly improving system reliability.

The ability to now concentrate on the design and development of systems is indicative of the maturity of our industry where, for the first time, a real partnership between system design houses and semiconductor manufacturers can be struclc to the benefit of the whole industry and its customers.

SLIDE TWO — [HIS driving forces: CMOS, DA, PKG]

The three technologies that have evolved to drive this next level of integration are Complementary Metal Oxide Semiconductors (CMOS), Design Automation and Paclcaging.

CMOS

CMOS was, for many years, seen as an advantage only in power-limited applications where very dear tradeoffs — notably in performance and level of integration — were made.

Now there is no sacrifice in performance as compared to NMOS/bipolar and the low power advantage is still retained. In fact, modern silicon gate CMOS technology has progressed to the point where it is clearly the technology of the future for VLSI.

But even more importantly to the realization of true highly integrated systems, CMOS allows dense paclcing of components because of low heat dissipation made possible through its low power operation.

DESIGN AUTOMATION

Another key to the next phase of highly integrated systems is the evolution of Design Automation technology.

Computers have been used for years to aid in the design of electronics, but that usage normally involved a collection of discrete hardware and software that didn't communicate and did not allow a hierarchal approach to solving design-oriented problems. The familiar term for this level design tool is CAD (computer aided design).

Design Automation is far more than that. It's a whole integrated process that allows top-to-bottom design coupled with simultaneous bottom-to-top analysis and feedback.

Since Design Automation uses a common database where changes on one level trigger automatic adjustments at all other levels, the designer can move from initial concept through logic, layout

- 2 -

Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Park Drive / San Jose, GA 95131 / (408) 971-9000 / Telex 171973

and even manufacturing steps with the ability to interrogate any level at any time.

Further, it allows the engineer to concentrate on total system capabilities rather than on discrete gate functions — effectively giving the system/logic designer the tool to design the IC with no major change in methodology.

In a nutshell. Design Automation provides for the first time the integrated system needed to develop "systems in silicon."

PACKAGING

The last of the three converging technologies needed to realize the highly integrated system goal is pac lcaging.

With new packaging techniques using low-cost plastic leaded chip carriers (PLCCs), we can achieve higher pin count and smaller size than that possible with conventional dual-in-line packages. Also, surface mounts can be installed on both sides of boards, decreasing further the overall board size.

SLIDE THREE — [CMOS driving forces: speed, function, power]

The driving forces in selecting CMOS technology are power, functionality and speed.

POWER

In the past few years, integration levels have increased to the point where conventional NMOS power barriers were reached. With CMOS, a 90 percent reduction in power over NMOS/bipolar designs is feasible.

Converting existing designs to CMOS effectively break the power barrier experienced with the most dense units of today. But a more significant CMOS advantage for tomorrow's highly integrated systems is that as CMOS integration levels increase, total system power requirements actually lessen. That occurs because a large percentage of the power dissipation in CMOS is to drive external interconnect capacitance at system level.

Another benefit is that with static CMOS design, which gives the ability to stop the system's clock, system power requirements can be reduced by yet another order of magnitude. So static CMOS gives a new dimension of flexibility with respect to controlling system power/performance tradeoffs.

- 3 -


FUNCTION

CMOS has evolved to the point where industry-standard, and highly integrated, functions are now available. Examples of that are the 80C86 16-bit microprocessor, the 80C51 8-bit microcomputer and the 80C85 radiation-hardened microprocessor. In addition, many SSI, MSI and LSI peripheral functions are now available.

SPEED

CMOS is not a laggard in performance, either. In the past, slow speed was associated with CMOS circuits. But the low performance state was more the result of a lacJc of attention paid to CMOS technology than any inherent limitation. By applying modern MOS fabrication techniques, CMOS has now converged on NMOS performance. Today it is widely recognized that advanced CMOS designs provide performance as good or better than NMOS while Still realizing the benefits of low-power.

And because of these advances it should be noted that the next generation of industry-standard products are being designed today in CMOS technology.

SLIDE FOUR: [Driving forces of Design Automation]

Design Automation is a Jcey to achieving a high level of system integration. The three driving forces in the development of DA are hierarchal software, networked hardware and modular design.

HIERARCHAL SOFTWARE

Using CAD, the design progressed from the bottom up and after all the worJc was done, a top down analysis was done to see if the circuitry worlced.

With DA's hierarchal software, top down design methodology becomes possible with bottom up analysis available throughout the design process.

Part of the analysis possible is multi-mode simulation. Behavioral, logic and circuit simulation can be done from the same database and these three modes can even be "mixed" appropriately.

And with a very large DA database and simulation abilities, it is feasible to simulate circuits containing large numbers of transistors. So larger, more complex systems can be handled by a smaller number of less experienced design engineers. That is why Design Automation is so vital an issue in the emergence of Highly Integrated Systems. Obviously, development of HIS is a more

- 4 -


design intensive taslc and to maintain leadership in this area, it is absolutely essential to achieve greater design efficiency.

NETWORKED SYSTEM

Another important part of Design Automation is the integration toward a completely networked system.

With a common database tying integrated workstations, data can be captured easily at remote locations and current data can be distributed and used where it's needed.

Current systems network the design, simulation, test, maskmaking and layout functions. Very soon, computer-aided manufacturing stations will be tied in to completely automate the design sequence. Then, any change on any level will ripple to every other level.

MODULAR DESIGN

Modular Design is the use of standard SSI, MSI or LSI functions for the development of a VLSI circuit.

Three significant advantages of this approach are the reduction in development risk, the increase in design efficiency and the ability to customize and optimize for a given application.

The risk is lowered by using industry-standard and characterized functions as building blocks; efficiency is improved by reduction of development time and cost through the use of higher level functions. By using industry-standard functions, designers can use the same functions they previously used in PC board-level design.

Since each cell comes as a fully tested and proven unit, designer learning time is reduced and output is increased. A designer who completed "X" number of gates per week can do lOX or lOOX using DA.

SLIDE FIVE: [Driving forces of Packaging]

Advancement in packaging technology is the third key in the realization of Highly Integrated Systems.

Packages are becoming larger and yet smaller — larger in pin count and smaller in size. Advanced functions and the increased I/O of high integration call for increased efficiency in board layout and packaging.

- 5 -


SURFACE MOUNT

Advances in surface mount technology now give significant packaging benefits. Surface mounting can reduce the area occupied on the board by about 3-1 over dual-in-line packages. The reduced height of plastic leaded chip carriers (PLCC) and LCC packages further reduces overall volume and, of course, weight savings are realized when package size is reduced.

The emergence of PLCC packages is also significant since it uses low cost plastic materials and eliminates the thermal mismatch encountered when ceramic type chip carriers are mounted on epoxy boards.

In fact, the curled leads of PLCCs provide a buffer against thermal or mechanical stress and show none of the material mismatch seen with ceramic leadless chip carriers. PLCCs can be used with conventional fiberglass PC boards and allow easy manufacture of highly integrated systems.

HIGH PIN COUNT

The smaller outline of surface mount packages allow a higher pin count per board area which is important for the integration of several functions on a single chip. As integration goes up, the requirement for I/O goes up and the surface mount concept makes high pin count packages feasible for manufacturing.

SYSTEM INTEGRATION

Since integrated CMOS systems don't need large power supplies, fans, heat sinks and fins, these new developments in packaging technology can be used. And the ability to now use PLCCs and LCCs means a more reliable, more easily manufactured and less expensive per function unit can be delivered to the customer.

SLIDE SIX: [Technology convergence facilitates HIS development]

So the convergence of these technology forces now places us on the Highly Integrated Systems threshold — the next industry phase.

While each evolving area of these converging technologies is important, key areas that should be illustrated by example are: the Speed possible with CMOS, Modular Design benefits, and the packaging advantages afforded by Surface Mounts and System Integration.

- 6 -


SLIDE SEVEN: [Impact on Performance: J-11]

A joint development of Digital Equipment Corporation and Harris Semiconductor, the J-ll is fabricated using advanced self-aligned junction-isolated (SAJI IV) process. The J-11 set contains features not previously available on chip including full PDP-11 memory-management functions, high-speed cache memory support and on-chip floating point instruction set. Even with the added value of increased function and decreased size, the J-11 still exceeds the performance of all members of the PDP-11 family.

Of significance is the key role of CMOS and advanced packaging techniques in achieving superior system performance.

SLIDE EIGHT: [J-11 block diagram]

J-11 bus capacitance is reduced because of sharply shortened interconnect distance. Another significant benefit of CMOS is its ability to drive capacitive loads. As a result, two 22-line buses are run at 200 nanosecond bus instruction time.

SLIDE NINE: [Impact of Modular Design: 82C55A and 82C37A]

The circuits pictured are the 82C55A and the 82C37A. Both were created using modular standard cell design.

Modular design is a proven vehicle for creation of LSI products and it supports migration to advanced processes like SAJI V. As a result of modular design, we can shrink these products to our new double metal CMOS emd realize a 40 percent area reduction without redesigning or doing hand re-layout of the product. Also, the LSI creation becomes a building block for highly integrated peripherals.

SLIDE TEN: [Highly integrated communications interface]

Another good example of modular design is this highly integrated communications interface. These functions, created with modular design techniques, can be easily incorporated into a multi-function, single chip device that saves board space and pin count. This interface is a 68-pin device that replaces components with a total pin count of 218.

- 7 -


SLIDE ELEVEN: [List of LSI SuperCells]

PERIPHERAL CIRCUITS: 82C37A DMA controller 82C52 UART/BRG 82C54 Programmable Interval Timer 82C55A Parallel I/O 82C56A Multifunction UART 82C59A Priority Interrupt Controller BUS SUPPORT CIRCUITS: 82C82 Octal Latch 82C83 Octal Latch (Inv.) 82C84A Clock Generator 82C85 Static Cloclc Controller 82C86 Octal Bus Transceiver 82C87 Octal Bus Transceiver (Inv.) 82C88 Bus Controller 82C89 Bus Arbiter DATA COMMUNICATIONS; HD15530....Manchester Encoder-Decoder HD15531....Manchester Encoder-Decoder HD4702 Baud Rate Generator HD6402 UART HD6406 UART/BRG/MODEM Control HD6408 Manchester Encoder-Decoder HD6409 Manchester Encoder-Decoder MEMORY; IK RAM Reconfigurable RAM IK RAM Reconfigurable RAM SLIDE TWELVE: [Impact of System Integration]

The impact of system integration can be clearly seen here as system size shrinJcs by a factor of 6. The functions on these two 6X12 inch boards can be integrated into the 4x6 board with surface mounts on each side.

This could not be done without using modular design, CMOS process and advanced packaging techniques.

SLIDE THIRTEEN: [CMOS for harsh environments]

The real world of industrial controllers is one characterized

- 8 -


by contaminants such as dirt, dust, oil; extremes of temperature and humidity; and vibration — a real "board buster."

This product shows the benefits of rugged computers sealed off from harsh environs. Future systems are certain to need the same "tough hide" made possible by the low power, low heat operation of CMOS and lean, intractable PLCC and LCC packaging.

SLIDE FOURTEEN: [Hewlett-Packard's The Portable]

The HP-110 is another example showing the impact of CMOS on system packaging, power supplies and portability.

A nine-pound, notebook-sized computer that offers the power and capabilities of a desktop computer and runs on batteries so it can run with you — certainly a strong case for highly integrated CMOS systems.

SLIDE FIFTEEN: [summary]

The use of CMOS processes. Design Automation and advanced Packaging techniques will open new markets and applications for the electronics industry, and bring the significant benefits of increased integration to conventional applications. The development of these converging technologies ensures growth and continuing innovation for the "Information Age."

- 9 -


Acceleration Rate of Integration

moM.r ifmannte

INTEQIUTION /VACUUM LEVEL

i ^ 1*M

TECHNOLOGIES CONVERGE

CMOS

DESIGN AUTOMATION

PACKAGING

HIS

TO DRIVE HIGHLY INTEGRATED SYSTEMS

- 10 -


CMOS

DRIVING FORCES

POWER • — • _ _ _

FUNCTION

SPEED ^

CMOS

DESIGN AUTOMATION

DRIVING FORCES

HIERARCHAL SOFTWARE

• — • — — _ ^ ~ ~ " " ~ - — . ^ ' ^

NETWORKED SYSTEM

_^ • MODULAR

DESIGN

DESIGN AUTOMATION

- 11 -

Dataquest incorporated, A Subsidiary of A.C. Nielsen Company /1290 Bidder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973

PACKAGING

DRIVING FORCES

SURFACE MOUNT

__ HIGH PIN COUNT

" SYSTEM

INTEGRATION

PACKAGING

HIGHLY INTEGRATED SYSTEMS ». a convergence of technology forces

- 12 -


J11 OATA CHIP

-

M

IMCIM WMTMICnOM

J11 BASE

CONinOL CHIP

a

HM

\irtO *IKHUUAT» H M

J11 CONTftOL

CHIP 1

J11 CONTIIOL

CHIP a

.

- 13 -


IMPACT OF MODULAR DESIGN 82CS5A 82C37A

HIGHLY INTEGRATED COMMUNICATIONS INTERFACE

I/O

I/O

S2CS4 INTERVAL

TIMER

HO-64 UART-i

CONTROL LOGIC

106 )RG

SN 74225 FIFO

I/O

•2C55A no

S3C5M

PIC

a2C84A OSC.

I/O

- 14 -


IMPACT ON SYSTEM INTEGRATION

THE SEALED ENVIRONMENT

REAL WORLD OPERATION

- 15 -


THE PORTABLE

HIGHLY INTEGRATED SYSTEMS

• Now practical through evolution of Icey technologies

• Pervasive impact on next generation systems

- 16 -


(IDa Dataquest

Dataquest

PAST CMOS: KEY TO VLSI PERVASIVENESS

Dr. T. J. Rodgers President

Cypress Semiconductor

Dr. Rodgers has been the President and Chief Executive Officer of Cypress Semiconductor Corporation since its founding in 1983. During his nine years in the integrated electronics field, he has held positions as Static RAM Product Manager at AMD and Manager of Memory Development at AMI. Dr. Rodgers received an A.B. degree in Physics and Chemistry from Dartmouth College, where he was a Sloan Fellow; and M.S.E.E. and Ph.D.E.E. degrees from Stanford university, where he was a Hertz Fellow.



Dataquest Incorporated, A Subsidiary of A.G. Nielsen Company / 1290 Bidder Park Drive / San Jose, GA 95131 / (408) 971-9000 / Telex 171973

WORLDWIDE WSTS SHIPMENTS INTEGRATED CIRCUf

(IBILLIONS)

1982 1983 1984 1965 196e 1987

WORLDWIDE WSTS SHIPMENTS DIGITAL CMOS

($BILLlOh6)

1982 1983 1984 1965 1966 1987

- 1 -

Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Pari< Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973

WORLDWIDE WSTS SHIPME^^S DIGITAL BIPOLAR

(IBILLIONS)

1982 1963 19S4 1985 1966 1987

MEMORY MARKET Sh^RE (DATAQUEST)

1980 1981 1982 1983 1984 1985 1956 1987 1988

• BiPaAR • JSMCS n CMOS

YEAR

- 2 -


4K STATIC RAM PRICE VERSUS SPEED

SPEED ISTS 25nS 35nS 45nS 55nS 7QnS 150ns 200nS 450nS

COMPANIES 3 3 3 6 11 11 2 15 15

TECHNOLOGY

ECL ECL HMOS HMOS HMOS HMOS NMOS NMOS NMOS

PRODUCT 100/10474 100/10474 2148/9 2148/9 2148/9 2148/9

2114A 2114 2114

ASP(1983) J20.00 $15.00 $5.50 $4.00 $2.75 $2.35 $1.90 $1.25 $0.90

ASP(1965) $10.00 $750 $3£5 $2.65 $2.00 $1.80 $1.60 $1.15 $1X)0

GATE DELAY VERSUS YEAR

m 2

1975 1975 1977 1979 1981 195-5 1974 1976 1978 1980 1982

YEAR

- 3 -


CYPRESS PRODUCT STRATEGY -- FAST 1K RAtvIS --

BIPOLAR NMOS CMOS

ORGANIZATION SPEED POWER POWER-SPEED PROD ESD PROTECTION ALPHA SENSITIVITY DIE TEMPERATURE

256X4 35NS

155mA 27nJ

<400V HIGH 135C

256X4 25NS

120mA 15nJ

>1000V NONE 123 C

256X4 15NS SOmA 6nJ

>2000V NONE 1050

FAILURE RATE VERSES POWER 500

400 RATE

] K RAM IN THREE TECHNOLOGIES

F=Foc -Ea/KT Ea=1eV

BIPOLAR

0 420 eeo POWER (MW)

653

- 4 -


ELECTROSTATIC DISCHARGE 8000-.

7000-

eooo-5000

4000

3000

2000

1000

VOLTS 0 1 2 3 4 5 6 7 9 10 11 12 13 14 15

PIN NUMBER

CMOS 16K REGISTERED PROM COMPARED TO BIPOLAR

PARAMHER CMOS

SPEED 35nS/15nS POWER 495mW (PLASTIC) SUPPLY TOLERANCE 10% ESDPASSvaTAGE >2000V CHIP SIZE 19;200SQMLS

BPOLAR

40nS/20nS 971mW(CERDP) 5?: -20QV 29.700 SQ MILS

- 5 -


Dataquest

Dataquest

TELECOMMUNICATIONS IMPACT OF SEMICONDUCTORS

Marisa Bellisario Managing Director and Chief Executive Officer

Italtel Group

Marisa Bellisario is Managing Director and Chief Executive Officer of the Italtel Group. Prior to joining Italtel, Ms. Bellisario was President and Chief Executive Officer of Olivetti Corporation of America. Formerly, she was in charge of Product Planning and Operations Planning at General Electric Information Systems Italia and at Honeywell Information Systems Italia. She began her business activities in 1960 at Olivetti Divisione Elettronica. Ms. Bellisario graduated in Economics at Turin.



Dataquest Incorporated, A Subsidiary of A.C. Nielsen Company / 1290 Bidder Parl< Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973

Si TELECOMMUNICATIONS IMPACT OF SEMICONDUCTORS

Sis Conference

San Dlegot October 16, 1984

Marlaa Bellieario Managing Director and CEO, Italtel

Ladlaa and gentlemen,

good afternoon and thank you for inviting me to speak on the

Impact of semiconductors on the telecomiDunicatlons industry: a

topic which, of course, is one of the top priority issues on my

agenda. I am in charge of Italtel, the largest Italian manufac

turing company in the telecommunications Industry and part of the

Iri-Stet Croup.

In Italy, Italtel holds fifty-two percent of the market, in terms

of installed lines; in Europe, our share amounts to nine percent

and accounts for three percent of the worldwide market. Total

consolidated sales for 1983 amounted to 1,100 billion lire*. Last

year, we recorded a 10 billion lire profit**, while in the pre

vious years our losses were substantial.

The company's performance in the first six months of 1984 confirm

this positive trend: consolidated sales Increased by 20 percent,

compared to the first semester of 1983; consolidated profit amoun-

* 725 million dollars at the 1983 average exchange

rate.

** 6.6 million dollars at the 1983 average exchange

rate.

- 1 -

Dirtiiont Holuiofil CtUrn* IttiWI tOlB4 MIIlno < Vi* A di ToCqutVlII* I t - Ml. 43BaMSa • 436*5393 - Mlox 914640 • Ftuimll* (gruppo 3 CClTT) (OJ) 438S$37B


ted to 16»3 billion lire* growing by 27 billion lire** compared to

the first 8lx months of 1983.

Telecommunications are undergoing a radical change: the telepho

ne's functions and services are no longer limited to voice

hattdling. Data processing Is also rapidly changing together with

the role of computers. In fact, today's increasingly sophisticated

and powerful computers are merely the direct evolution of the

number-crunching calculators of the Forties. Two worlds, which

until today have led separate lives, are beginning to merge.

The Integration process is just beginning. However, it is so

it&portant that we Europeans have invented a specific term to

define it: "telematics". You can't find "telematics" In an Ameri

can dictionary: I've been told that the nearest translation could

be "customer premises equipment". However, In my opinion, this

definition is still inadequate, since telematics Is an all-encom

passing concept.

The starting point for the integration between telecommunications

and data processing is microelectronics, I.e. silicon. Here, a few

hundred miles from Silicon Valley, is one of the two technological

* 9.B million dollars at the average exchange rate for first

semester 1984

** 16 million dollars at the average exchange rate for first

semester 198A

- 2 -


aources which are the driving forces behind the transformation

and evolution of manufacturing processes, products and applica

tions. At the risk of hurting someone's national pride, nay I

remind you that the other technological source, equally Important,

also faces the Pacifici Japan.

I an here to speak on the basis of my experience In telecommunica

tions. However, I am also here to meet people and gather first

hand information on work In progress In the silicon Industry and

on the fast pace of technological change. This type of contact is

esseiitlal In order to keep up with the state-of-the-art in a

market where competition Is global and requires a new relationship

between vendors and buyers.

Let me highlight some facts on telecommunications. This slide

shows the breakdown per area of the world market for private and

public telecommunications systems: these are our estimates for

1985, which is practically today.

The United States are first In terms of the number of telephones

lostallsd. They also outrank other countries when taking into

account the telephone density, i.e. the number of telephones as

percent of population, as this slide illustrates. However, as far

as the number of subscribers Is concerned. Western Europe Is ahead

of the United States by 3.5 million. Taking Into account subscri

ber density, the united states are again in first place.

The number of subscribers and/or telephones Is a well-established

Indicator also for assessing a country's economic and social

situation. This slide compares each area's subscribers, as percent

of total world subscribers, with its GNP, as percent of total

world GMP. Telephone penetration will continue to be a useful

Indicator even when. In the near future, telephones will evolve

- 3 -


Into telematlc terminals or integrated workstations handling every

type of infomtatlon (volce» datat texts, laagee. graphs).

The following slide ranks the worldU major telecom manufacturers

in terms of equivalent lines produced. These are our estimates,

although based on official data available at year-end 1982. Let me

stand up for Europe by pointing out that six out of twelve compa

nies are European or operate in Europe. Moreover Itt's main

production sites are in Europe.

Through a simple addition we learn that» in 1982, five companies

belonging to ECC-member countries (Siemens, Alcatel Thomson,

Plessey/GGC, Italtel* Philips) produced 5.6 million equivalent

lines, which is close to 6.1 million produced by At&t. If we add

to the EEC total the 1.8 million lines manufactured by Ericsson

(which has many subsidiaries in the ECC countries), the European

grand total Is 7.4 million, which ranks Europe as the world's

first by a significant margin.

Japan's overall 1982 production totalled 2.6 million equivalent

lines: a much lower level than the European one. However Japan has

already achieved full co.'ordination so that all Japanese firms

manufacture the aame systems.

These figures are a clear indication of the role of the "Europe of

Telecommunications" in the industry's evolution and of the

ever-Increasing importance it will have in the future.

To assess the impact of semiconductors on telecommunicatlona, let

ne highlight the transformation process which networks are now

undergoing. The evolution towards digital technologies has just

started: the slide shows the number of digital exchanges, as

percentage of total exchanges* installed in 1982 in four European

countries. The US figures are included for comparison.

- 4 -


The following «llde lists the public switching systems presently

installed or being field tested: the first aeml-electronlc ex

change dates back to 1965 ( these exchanges, as we have seen,

handle a significant share of the telephone traffic In the United

States).

The first central-control electronic exchange was introduced in

1977. The Implementation of fully digital exchanges, mainly of the

distributed control type, is a current event.

As you can see, the bottom of the list Is very short: it Includes

one of Italtel's products, the Proteo UTlO/3, which has completed

final acceptance tests on the part of the Italian operating

company : thirteen of these exchanges have already been shipped ,

to be installed in the Italian network. We produce the UTlO/3 in

our plants in Mllano and Palermo (in Sicily) and, during 1984,

have recorded some significant successes abroad: Cuatemala,

Mozambique and Albania have chosen our system to modernise their

telecommunications network for an overall value of about 80

billion dollars.

Compared to the United States, Europe was late in beginning the

transformation to digital switches, but it is rapidly recovering

ground, as you can see in this slide, which traces Europe's plans

compared to that of the United States. The transformation rate

varies among the five countries with Prance leading the way.

However both Italy's and the UK's curves are also quite steep.

Investment plans for telecommunications are quite substantial in

major European countries: for instance, the Italian P.T. Telecom

munications Plan provides for Investments amounting to approxima

tely 2,300 million dollars per year in the next 10 years; the

French Post Office expects to Invest about 2,900 million dollars

per year until 1966. whereas, for the same time span, the German

- 5 -


F.T. le estimated to invest some 4,100 million dollars per year.

Most of these expenses will be concentrated on the implementation

of networks; Italy, for example, will allocate to networks and

exchanges about 80 percent of total telecommunications investments

forecasted.

The ehlft to digital technologies appears to be slower and less

extensive in the United States compared to the main European

countries. In fact, as we have previously mentioned, the United

States have already heavily Invested in semi-electronic systems to

ensure efficient service and adequate returns in the next years.

Let me go on to examine the effects of semiconductors on telecom

munications manufacturing companies. As far as products are

conce'rned, European companies are the main consumer* of eemlcon-

ductora ( at percentage of total semiconductor consumption) today

and In the next four years. Telecommunications systems and equip

ment absorb, this year, 23 percent of all semiconductors consumed

In Europe, as opposed to 14 percent In the United States and 9

percent in Japan.

The European consumption rate is, as you see, higher than that of

the US and Japan. This means that the European innovation rate is

higher (as confirmed by the previous elide, which showed network

implementation plans In varlona countries). But, It also means

that ve Europeans are behind in absolute terms. Consequently, we

need to push Innovation much further. In absolute values, the

United States will continue to outrank Europe: Its 198A telecom

semiconductor consumption is 70 percent greater than the European

one*

* 1690 million against 977 million dollars.

- 6 -


Furthermore, European countries have also chosen to give priority

to renewing networks, all handled by individual Ptt's, with less

emphasis to developing teletnatlc systems/services/Products. This

is confirmed by Europe's 1984 consumption values of semiconductors

for telecommunications, which is 3 percentage points greater than

the semiconductor consumption for computers and terminals.*

The consequences of microelectronics In the factories are negative

for total employment but positive as far as professional skill Is

concerned. Let's take as example the case of three European coun

tries, In which telecommunications companies started to shift to

microelectronics In the mld-seventles. The slide shows how total

personnel has decreased by about 30 percent, affecting mainly blue

collars.

Telecom companies, In fact, need more technicians, researchers,

specialists, systems engineers and less blue collars. This Is

confirmed by our experience: we reduced total personnel by 6000

employees In the last three years. Today we are slightly less than

21,000 and our plans provide for an additional reduction of about

4,000 people in the next two years.

The change In personnel mix is another major consequence of

microelectronics: today Italtel employees are 50 percent white

collars and 50 percent blue collars; while, three years ago, the

breakdown was quite different. 10 percent of our total workers are

engaged In research and development activities today , compared to

8 percent in 1960. Globally, Italtel's research and development

staff totals 2,000 persons, which Is the largest R and D group in

Italy and one of the first in Europe.

* 23.2 percent against 20 percent

- 7 -


Silicon-based microelectronics reduces added value up to lO-fold,

while R and D expenses Increase: approximately .5 to 1 billion

dollars and 5 to 8 years are required for developing a complete

line of digital switching systems. Time span and costs will

Increase with the future generation of products.

A strategy focusing on Intercompany alliances and rationalization

of supply Is therefore necessary In order to share R and D invest

ments among several markets and to achieve economies of scale.

This will Improve competitiveness in terms of price, while, as far

as technology is concerned, we Europeans already have and master

it.

1 have spoken of "we Europeans". However, the Europe of telecom

munications ia made up of ten different entitles, none of which

can Individually compete, presently or in the future,with American

or Japanese companies.

I am convinced that Europeans should start to work together on

very specific technical and/or market objectives without excluding

beforehand alliances with American companies, A first relevant

example of this strategy is the agreement between the PTs of

France and Germany, on the one hand, and Siemens, Philips and

Alcatel Thomaoni on the other, to develop and deploy the same

cellular mobile radio system, we are presently negotiating an

agreement with Alcatel Thomson In France and with Siemens in

Garmany. We have a long-standing cooperation with Siemens for

FABXB and public packet switching networks. We have also begun

exploratory talks in the U.K.

With this fitep-by-seep strategy* In the next three to five years

we could achieve a commonality of parte and sub-systems accounting

for 15 to 20 p^rr«rit of s whole awiLwliius system.

- 8 -


The alliance among Europeans should be coupled with alliances and

Joint ventures with high-tech companies, notably those based on

both coasts of the Pacific, which can supply advanced products and

technologies for specific market segments. We at Italtel, for

instance, In 1962 signed with Gte an agreement aimed at jointly

developing digital public switching systems. Our co-operation,

which also Includes Telettra (the other Italian telecotmnmunica-

tiotts company , is going well. As far as private telecommunica

tions are concerned, we implemented a "cocktail strategy" choosing

small high-tech American partners who can supply the most advanced

technologies and products. The objectives of these alliances, or,

for that matter, of any industrial alliance, are additional

markets and new, advanced technologies.

The challenge of tomorrow for telecommunications, transformed by

microelectronics, involves willingness to innovate and to face

tough competition, flexibility in structures, products and produc

tion processes. Moreover it requires en open approach to potential

partners, whatever their nationality. The agreements between

At&t-Phllips and At&t-Olivettl are only the latest examples of

alliances] they are the proof that the telecommunications market

is expanding and merging with information handling and data

processing.

This final slide illustrates the evolution we forecast in the

structure of the world market for telecommunications and data

processing. As you can see, the greater market share for the

Nineties is represented by integrated information systems,

encompassing the whole set of user interfaces.

Perhaps, beginning with the next decade, our Dataquest friends

will be able to organize conferences using telecommunlcaclons or,

better still, telematics systems: we will probably be able to

communicate without moving from our offices.

- 9 -


This hypothesis is technically feasible thanks to silicon-based

microelectronics, coupled with the resources, technologies and

creativity of people in telecoofflunicatlons, data processing and

electronics. This will also help to solve the perennial problem of

updating and re-arranging ny schedule. However I expect that

airlines restaurants and hotels as nice as this one won't be so

enthused.

Thank you.

- 10 -


SIS Conference

Teiecommunications impact of

Semiconductors

Marisa Bellisario

San Diego - Oct. 16,1984

AttaHel

- 11 -


World Telecom Market (1985)

Africa Oceania Latin America Asia 1% 1.6% .3% 15.6%

North America 41.2%

Total: $ 80 billion

Telephones (in millions -1982)

Europe 37.6%

AKaKel

. Latin America Oceania OA A

10 ^ -^ Other 24.1

North America 198.8

West 159.4 Europe

Total: 524.2 million

- 12 - ARaKei


Telephones per 100 Population (1962)

77.26

North America

43.28

Western Europe

m

Japan

Subscribers (in millions -1982)

AttaHel

Latin America Oceania 15.5

Africa 6.6 3.9 —

Nortli America 104.5

Other 17.6

Japan 42.5

West 107.9

Europe

Total: 330 million

- 13 -

AltaHel

Dataquest Incorporated, A Subsidiary of AC. Nielsen Company / 1290 Bidder Parl< Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973

Subscribers per 100 Population (1982)

40.59 35.95

29.31

North America

Western Europe

Japan

Subscribers and GNP (1982)

AttaHel

North America Western Europe Japan Oceania Eastern Europe Asia* Latin America Africa

^without Japan

Subscribers 31.7 32.7 12.9 2.0 9.5 5.3 4.7 1.2

Total 100

QNP 27.5 29.6 10.1 1.6

14.8 7.0 6.3 3.1

100

AltaKel

- 14 -


World Public Switching Market (1982)

At&t itt Siemens LM. Ericsson Alcatel Thomson Fujitsu Nippon Electric Piessey + Gee Gte (USA) Italtel + Gte (1) Northem Telecom Philips

(1) Gte Italia and Balglum

Market share

29 14 10 9 8 7 6 5 4 3 3 2

Total 100

Equivalent lines (000)

6100 2800 2000 1800 1600 1400 1200 1100 820 630 600 450

20500

A Italtel

Switching Techniques (equivalent lines-Jan. 1984)

E/mechanical France FRO Italy UK USA

63 98 98 70 36

Semi-electronic 23 1 27 59

Digital 14 5

TotallOO 100 100 100 100

A Italtel

- 15 -


Public Switching Systems (first installation or field test)

SEMI-ELECTRONIC

1ESS At&t

CENTRAL CCNTROL

E10 DMS 100/200 System X EWSD AXE 10 GTD-5 D60/D70

CIt Alcatel Northern Telecom Plessey/Gec Siemens Ericsson Gte Nec/FMjitsu

DISTRIBUTED CONTROL

5ESS 1240 UT10/3

At&t Itt Italtei

A

1965

1977 1980 1981 1P81 1982 1982 1983

1983 1983 1984

Italtei

Digital Networic Implementation Plans

(equivalent lines) France

2000 years

- 16 -AKaKel


Telecom Semiconductor Consumption

(as % of total semiconductor consumption) % 30-

20

10-

EUROPE

977 M$

NORTH AMERICA

1691 M$ JAPAN

694 M$

1 t I 1984

2048 M$

3556 MS

—

1464 M$

19

Europe North America years

• ^ Japan

Altaltel

Personnel in Telecom Manufacturing

UK

France Sweden

77 78

17 -

79 80 years

Altaltel


White Collar / Blue Collar Italtel

1980 1984

33% 67% 50% 50%

Telecom and DP Worid Market

A Italtel

'Intsgrattd Information System*

1980

Public Networks

Telephones

PABXs

DDP

WP

I/O

Storage Systems

^ —

1985

Public Networks

Integrated Private

Networks Telematics Systems

and Products

other

1990

Public Networks

lis'

other

Altaltel

- 18 -

Dataquest Incorporated, A Subsidiary of AC. Nielsen Company / 1290 Ridder Park Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973

Dataquest

Dataquest

IDEAS AND THE PROLIFERATION OF TECHNOLOGY

Everett M. Rogers Professor of Cc»ninunications

Stanford University

Dr. Rogers has been teaching and conducting research on technological innovations for ten years at Stanford University. He was previously on the faculties of the University of Michigan, Michigan State University, and Ohio State University. Dr. Rogers is author of numerous books and articles on communications and innovation, including Silicon Valley Fever (1984), co-authored with Judith K. Larsen. Dr. Rogers is also co-founder with Dr. Larsen of Cognos Associates in Los Altos, California, a firm specializing in research on the impact of technology, and on the process of technology transfer. He received B.S., M.S., and Ph.D. degrees from Iowa State University.




Dataquest

IDEAS AND THE PROLIFERATION OF TECHNOLOGY

Judith K. Larsen Senior Research Scientist

Cognos Associates

Dr. Larsen is a Senior Research Scientist with Cognos Associates in Los AltoSf California. Her research focuses on the social impacts of technology and on public policy affecting the electronics industry. Previously, she was Principal Research Scientist at the American Institutes for Research. She began her career as an engineer at Philco-Pord Corporation. Dr. Larsen has written many journal articles and well as technical books. Silicon Valley Fever, co-authored with Everett M. Rogers, presents an overview of living and working in Silicon Valley. She received a B.A. degree from Gustavus Adolphus College, an M.A. degree from Syracuse University, and a Ph.D. degree from the University of California.




CREATING THE ENVIRONMENT FOR IDEAS

I. The proliferation of ideas

A. Development of ideas and knowledge in semiconductor industry

- Great expansion of field. The limits of the technology are being

blown out. Increased capability of technology.

- Growth in demand

- In an industry that's still developing, there are more

opportunities to pursue than any one company can possibly follow. Impossible

for one company to develop all aspects of a technology.

- Multiple development possibilities that are good possibilities

- Shortage of people is biggest barrier to more idea proliferation

B. Attitude of existing semiconductor companies

- Vnienever a company gets est:ablished, its o%m existence becomes its

main purpose. So it continues to support what it has done well in the past.

- Would be foolish not to, but supporting past traditions/procedures

often is incompatible with developing new ideas in new or undeveloped area.

II. Silicon Valley factors supporting proliferation of ideas

A. Job mobility. High level of employee turnover works to encourage

development and exchange of new ideas.

B. Strong support network/infrastructure. Easy to find machine shop or

assembly company that will do small Jobs at competitive prices.

C. Agglomeration. Location of companies in geographically concentrated

area.

D. Location in proximity to potential customers. Silivon Valley's well-

established electronics companies are prime markets for new products.

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£. Resources. Pool of experienced high-tech engineers and mangers. They

know the business. Most new ventures don't have an immediate need for lots

of employees; rather they need expertise.

F. Venture capital. Perhaps most important: money.

III. Incentives for the Individual and the proliferation of new ideas

A. $

B. Leave problems in current job. It's a matter of desperation for some

people. They get laid off or view their current job as uncertain,

C. Role models. The penalty for failure is so low and the examples of

what can be done are so many.

D. Challenge. Desire to climb out of ruts and break old routines.

"After seven years, things at my previous job were getting regular. I was

dealing with the same set of competitors and %rith a lot of the same faces

and problems."

- Elements of challenge include unabashed pleasure in what they do.

IV. Developing new ideas outside the existing company

A. Introduction. There are two ways of developing new

ideas/technologies: (1) Come up with a new idea; turn it into a commercial

product; find a marlcet for it. (2) Take an existing idea/technology (from

the last place you worked, usually) and improve upon it. The second strategy

has the greater likelihood of success, primarily because the market already

exists for a product that is being sold.

B. Ideas/technologies.

- New developers are at the front end of the technology, where there

is generally an excess in demand. The excess in supply of semiconductors is

usually more characteristic of the middle or end of the technology.

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- New developers are in markets ignored by large firms.

C. Incentives for developing ideas in new setting

- Coimnunications are simple

- Bureaucracy is minimal. Smaller groups of technical people can

develop products more 4tiickly. The bigger you get, the more you tend to have

a bureaucratic framework that slows you down.

- Employees are highly motivated.

- Knowledge that rewards are great if the company's product is

successful. Nickel-end-dime founder stock is hard to beat.

D. Experience. "We have a couple of things going for us in this company

right now that makes it easier. We've done it before, and the second time is

easier. The first time around, we did a lot of things right and a lot of

things wrong. If you remember the things you did right, you do them the same

way; if you remember the things you did wrong, you may not do them right the

second time, but at least you'll do them differently."

- Establishing credit, making contacts with vendors and customers,

and selling a new product are all easier the second time around, largely

because of the people's reputations.

E. Origins of founders. Although one inight expect the training provided

from working for a small company to be best, founders who worked for larger

companies (more than 500 employees) have a slightly higher success rate.

Reason may be that larger companies often have a successful product line

that the new venture can imitate. In addition, larger companies have gone

beyond "seat of the pants" management and can produce more seasoned leaders

with a better ability to organize and delegate authority.

F. Problems of technology-driven ventures

-Example of mistakes in technology driven company. Founders are

usually engineers with limited skills in related areas. Lack of experience

in marketing is usually a critical problem.

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V. Creating an environment for ideas within the existing company

A. Typical scenario:

1. Too much technology

2. Company couldn't or wouldn't develop technology into product.

3. Engineers frustrated after company cast aside technology.

4. Rivals/competitors raid company for top people.

B. Disadvantages faced by mature semiconductor companies

There are several reasons why more older and larger semiconductor

companies have a difficult time exploiting new technical product

opportunities and new market opportunities. There is little point in

exclaiming that large companies should learn to be more innovative; there

are perfectly valid reasons why they are not, and perhaps cannot be, more

innovative.

1. Initial market niche too small. A market opportunity that offers

interesting potential for a new company may be too small to be interesting

to a multi-million dollar corporation. Both the management of the large

company and the small venture are making sensible, rational decisions when

the first declines the market opportimity and the second Jumps at it.

2. De-<:oupling of development and marketing. Basic research comes from

the lab; development requires a great deal of interaction between the market

and the firm's design emd manufacturing capabilities. Communication lines

tend to be long in large companies, and short in small companies. In large

companies, it is difficult to get the design staff to understand market

needs, and equally difficult to get marketing to appreciate manufacturing's

capabilities and limitations. In a small venture, people are likely to have

first-hand or intensive knowledge both of the market and of the firm's

development capabilities. The key decisions regarding new semiconductor

products are at the interface of marketing and maniifacturing; the

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experienced, technically-trained entrepreneur is particularly well-

positioned to make those decisions. Marketing and manufacturing are coupled

in one or a few individuals in a new semiconductor company; in a large

company they are decoupled into two groups that traditionally have

difficulty conmiunicating with each other.

3. Absence of innovation champions. The successful development of a new

semiconductor technology requires a "champion** for the innovation.

Champions—that is, individueds who become dedicated to, and even zealous

about, the new opportunity-^o not easily emerge within a large corporation.

And if such an individual does onerge in an established semiconductor

company, rarely does he or she have the muscle or clout to focus resources

or attention sufficiently to succeed in exploiting the technology. However,

in a small company, the entrepreneur is the champion, and has the power to

lead staff to critical development efforts.

4. Management Reward Structure. In larger companies, management reward

structures place very little emphasis on risk-taking. Rather, a premium is

placed upon no surprises in operations. In such an environment, the cost of

being %nrong is much higher to a middle nianager than the reward for being

right. So what is the motivation for taking risks?

5. Cost of capital. Most semiconductor companies, large and small, face

capital constraints. They have more development opportunities available to

them than their supply of capital. High interest rates accentuate this

situation. Capital budgeting procedures in large companies tend to favor

investment opportunities that are relatively low risk, such as investments

to reduce costs or to expand production capacity. This %d.ll offer positive

returns, but little opportunity for dramatic payoff. This situation is

neither unexpected nor necessarily undesirable. The large firm*s

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stockholders are not expecting the company to undertake high-risk

investments, therefore the large company's decisions are consistent with

stockholder expectations.

C. Advantages for new semiconductor companies

Just as there are several reasons why large semi conductor companies are

at a disadvantage at capitalizing on innovation, there are several reasons

that small semiconductor companies are well positioned to exploit the

technology.

1. Ability to focus resources. Nearly all new semiconductor companies

are highly focused on one market niche. All of their resources are

concentrated on a limited scope of activity. Managers, engineers, and sales

personnel are not diverted by the demands of other products, by the needs of

customers in other markets, nor by the necessity to make continual

improvements in existing devices. The company must be successful in its

particular niche. The stubborn commitment and determination for success that

accompanies this highly focused effort can overcome formidable obstacles

that face virtually every new opportunity.

2. No existing products or customers to protect. A new company has no

existing product base nor customer base to protect. If new products make

existing products obsolete, thus making existing purchasers unhappy, these

unhappy customers will be prime prospects for the new venture. To the extent

that large companies make their own devices obsolete with the introduction

of new products, it is very often the threat of new ventures springing up in

the market that presses them into action.

3. Reward structure. Just as the reward structure of the large

semiconductor company mitigates against risk-t:aking, the reward structure in

the new venture encourages it. The payoff is in capital appreciation of

stock. The overriding motivation is for survival. Resources are carefully

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deployed, hours are long, efforts are highly focused. The effectiveness in

surmounting obstacles and the overall productivity of a new semiconductor

company are extraordinary.

4. Risk of Investment. Just as the budgeting procedures of the large

company bias against high-risk, high-return investment decisions, the new

venture seeks such projects. Venture capitalists who finance new

semiconductor companies seek opportunities that hold the promise of creating

five to ten times the original investment. Venture capital is a high-risk,

high-return game. Just the opposite of the game of allocating a large

company's limited capital resources among competing projects.

D. Intrapreneurship in established semiconductor companies.

fuch of the responsibility for the fate of idea development within

existing companies rests with corporate management. Review experiences of

some cases to see what works and what doesn't.

1. Set up venture group under the umbrella of an established company.

2. Group is actually a subsidiary group, complete vith its own

operations officer, manufacturing engineers, quality control specialists,

marketing people, and purchasing agents.

3. Has separate quarters.

4. Each team member gets a salary, but also the opportunity to earn

just as much in bonuses if the new product makes a good dent in the market.

Fat bonuses, more than anything else, are incentives to members of the team.

5. Venture must have freedom to choose research paths.

6. Technological breakthroughs occur when divergent research collides.

Important to have cross-fertilization of research ideas.

7. Brainstorming sessions. Getting people to challenge each other's

blue sky ideas. "All ideas passed through a Darwinism. Everyone had the

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right and obligation to coimnent on projects. It was productive because

unlike the academic way of doing things (you don't call me on my

inconsistencies and I won't call you on yours), there is no such gentleman's

agreement."

8. Closer ties between research scientists and product development

teams.

9. Visits by corporate executives to labs are critical, and need to be

frequent.

10. Role of research manager: (1) Protect troops from corporate

gunfire. (2) Obtain equipment and money. (3) Feed the winning ideas.

E. Predictable problems

- Sometimes management doesn't know enough about new technology to

understand how to mesh it with existing product—and to enthusiastically

support that transition.

- Almost always, communication is bad between corporation and venture

group. There is often duplication or overlap of effort.

- Research scientists don't comprehend the "adequacy of the product."

In the fast-moving, competitive semiconductor Industry, the product must

meet the needs and expectations of the market. R&D scientists often want to

keep working on the product to make it perfect. However, that can result in

the product reaching the market too late, or the product may never get into

production.

- Guard against venture producing technology that is incompatible wlch

existing technology, or new ideas that will obsolete corporate products

already on the market.

F. Drawbacks of intrapreurship

- Some think that a corporate venture group will not catch on. "If you

have to make one special arrangement after another to retain your R&D

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people, all your projects become very expensive. It may not be good business

to pursue them.**

-Team members can't m£ike as much money as they could in a traditional

start-up.

-Always the possibility the corporate parent will rescind their

freedom.

-Corporate venture still gets hung up with corporate bureaucracy.

G. Advantages of intrapreneurship

- "Bigger companies will have to adopt the concept. There is a shortage

of good people, and more and more of them are moving to start-ups in other

cities, as well as to local start-ups. If companies don't do a better job of

retraining good people, the entrepreneurs will move elsewhere."

- Ready access to corporate resources

- Extensive sales and distribution network

- Corporation keeps entrpreneurs

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VI. Summary

A, Difference between idea proliferation in semiconductor industry and

other industries:

- Explosive growth of Silicon Valley companies

- Failure rate is relatively low in Silicon Valley, That's because

companies rarely go out of business; rather they tend to be acquired for

their technology, equipment, and staff.

- Historically, few banlcruptcies among high-tech firms.

- Original team of foimders is rarely intact after a few years. The

greater the number of founders, the greater the chance of a split in the

group. Pairs of founders have the best record of staying together.

- Semiconductor industry characterized by large numbers of companies

entering the industry. New corporations ask tough questions, and in so doing

they contribute more than their share of discoveries. Not only are they

sources of innovation, they also stimulate existing companies to use new

ideas.

- As the technology matures, both economies of scale and various

types of vertical integration become more important, with the cost of

entering the industry increasing by several orders of magnitude. Therefore,

in most industries the rate of entry for new firms slows down as the

industry matures. Warning: Industries vd.th little or no rivalry greatly

resemble public Institutions, complete with insensitive bureaucracies.

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B. Conclusion

- Best chance of success, whether within existing c(»Dpany or in new

venture: have only two or three partners. They should be trained in

different fields, and have worked in large companies. The first product

should be an improvement on an existing and successful product.

- However there is no formula for success.

- Impossible to predict "right" technology.

- Human beings and their environments are too diverse for a pat

formula to work for everyone.

- So what to do? Expect to work on a kind of batting-average

basis. Tou can't expect to be successful in developing all new ideas.

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( I l l / Daftaquest

Dataquest

EUROPE—A TECHNOLOGICAL BACKWATER?

Malcolm G. Penn Vice President and Director of the

European Semiconductor industry Service Dataquest UK Limited

Mr. Penn is a Vice President of DATAQtJEST Incorporated and Director of the European Semiconductor Industry Service, based in London. He has 18 years of experience in the electronics industry, and has been involved with all aspects of management, manufacturing, marketing, and uses of electronic components, particularly semiconductors. Prior to joining DATAQUEST, he was Manager of Component Engineering at ITT Europe and held various operational and marketing functions within ITT Semiconductors. Mr. Penn received a B.S. honors degree in Electronic Engineering from Borough Polytechnic University, United Kingdom,




EUROPE—A TECHNOLOGICAL BACKWATER?

Hardly a week goes by nowadays without the world press pronouncing further gloom and despondency on Europe.

"Economic stagnation and political malaise darken the future of a once proud and powerful continent."

"Europe's escape from inflation—but with commodity prices high, can it follow the U.S. lead in growth?"

"Falling back in a critical race—old roadblocks and rivalries brake Europe in the high technology field."

"New jobs—the real American lesson for Europe."

"Semi markets hit 10-year high; but while boosting production overall, U.S. and Europe will lose market share to the Far East."

At least with that one Europe can take some small comfort that it is not alone in being criticized.

And now the same story from Dataquest? Well—let us see.

First of all, I want to confess that I consider myself to be European and proud of it. Despite the obvious problems and difficulties that Europe faces, some of which are entirely of its own making, I firmly believe in a strong and prosperous future for Europe. I do not support the Other popular consensus that Europe is tomorrow's Third World.

I also fully recognize the enormity of the task ahead and the major social and structural changes that will have to take place to ensure success. In the next 20 minutes or so, I would like to share with you some of my reasons behind this conviction.

Let us first take a look at the status quo..

As all good market researchers should, I conducted a survey recently on how the average American businessperson perceives Europe. Three main themes were common;

• A lost cause—a continent whose transition to a sophisticated and modern society more closely resembles that of the Stone Age than of the computer age.

• A continent whose apparent desire to produce agricultural products of every imaginable type seems insatiable, the total cost of which currently runs to some $18 billion per annum to support a $6 billion surplus of produce.


Dataquest incorporated, A Subsidiary of A.C. Nielsen Company /1290 Ridder Parl< Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973

• A continent of perpetual industrial strife where workers, protected and pampered by an overgenecous welfare system, seek more and more in return for less and less, and where managers relax secure behind various tariff and nontariff barriers. Oblivious to all.

As a European, it is easy for me to appreciate these popular myths surrounding Europe. Indeed, I will go further: I believe there has been a substantial element of truth to support them.

Western Europe, once proud and world dominant for two millennia, is currently stagnating economically and faltering politically. There is no denying this fact. After 30 years of nearly uninterrupted growth, the so-called "postwar miracle" has all but petered out. The once vivid dream of a united and influential European coiranunity has shriveled into a parody of itself: a "not-very-common market" perpetually embroiled in tacky quarrels over the price of soya beans and pig meat.

In a moment of stark cynicism, the Italian author Luigi Barzini recently wrote, "We Europeans have been reduced to the role of the Greeks in the Roman Empire. The most useful function an Italian or a Frenchman can perform these days is to teach an American or a Japanese the proper temperature at which to drink his red wine."

In all this, it is vitally important to remember one major difference between the European and U.S. cultures—that is the European ability to be frank and openly self-critical and to parody and make fun of oneself. This is quite contrary to the U.S. culture, where such actions are akin to betrayal, and where even the most blatant of blunders is rapidly dismissed as either irrelevant, or, as is more often the case, is presented as a resounding success.

At first sight, therefore, it is easy to appreciate how a simple analysis of these facts can lead to the conclusion that Europe is rapidly becoming an economic and technological backwater. It is also easy to overlook some of the underlying structural and social changes that have already occurred over the past few years. It is as a result of these changes that I believe Europe will arrest its temporary decline, moving from decadence to renaissance. I also believe that the first results have already been achieved. But more on that later.

Firstly, it is important to understand some of the reasons that have led to the present-day European economic demise. Without a doubt, the cost of two major world wars within 25 years of each other was high. It left much of Europe heavily in debt and in economic and industrial ruin.

In 1945, postwar Europe was starving. The most immediate priority was to rebuild agricultural self-sufficiency. The European solution to sickness, poverty, and homelessness was to construct a complex and all-embracing welfare state system. Today, true poverty and starvation



have long faded into the forgotten European past—nominal wages in Western Europe have multiplied by more than 10 since 1960 and real living standards have quadrupled. Even Europe's millions of jobless have gotten along reasonably well, with between 65 percent and 95 percent of their previous wages being paid by the state.

In its wake, this social success has brought with it other problems. For example, one of the by-products of the welfare system is that it does not reward success and innovation. Cossetted by years of social protection, many Europeans have lost their entrepreneurial attitude and ability to take the necessary risks in their business or personal lives. Today's business requires greater risk taking than ever before. By definition, risk denotes the possibility of failure. In Europe, failure is still considered a personal and professional catastrophe—in the United States, merely a setback.

This problem is further aggravated by the flattening of rewards and by increased job security, even in the case of unsatisfactory performance. The postwar "brain drain" of frustrated Europeans to the United States and Canada was a direct result of these phenomena and, in many respects, was driven by many of the same forces that resulted in the so-called "Silicon Valley Phenomenon."

All through the 1970s,- European governments behaved with fiscal abandon. Wages outstripped real growth by 25 percent, social spending ate up larger shares -of each country's GNP, and industrial production increased in the EEC by just 7 percent, in contrast with 12 percent in the United States and 28 percent in Japan.

There is, nowadays, a growing realization in Europe that the pendulum has swung too far, that some of the postwar programs have now become far too successful, and that social idealism has not only become too expensive but actually undesirable and occasionally counterproductive.

One by one, European leaders have now set about rationalizing their economies and falling in step with the prevailing austerity. Overall, a general economic realization now prevails, even amongst the most idealistic and staunch socialist governments, that austerity must be maintained, despite the howls of protest from the left, strikes—and even street violence—by the affected workers, and the resultant lack of popularity.

A new competitive energy is emerging amongst some of the European companies and governments, together with the growing realization of the need to compete effectively in a world market. It is my contention that the excesses of yesterday have now given way to the realities of today.



At this point, I would like to pause and take a look at Europ.e from a technological point of view. A review of the appropriate statistics soon indicates that, at the bottom line, Europe's industrial performance has lagged that of the rest of the world. Let us, for example, take semiconductor components.

In 1983, Europe consumed some $3.4 billion worth of semiconductor components, up 6.4 percent from 1982. At the same time, the world market grew 26 percent. Last year, Europe represented approximately 18 percent of the world semiconductor market, down from 25 percent some five years ago. Again last year, the European-owned semiconductor companies produced approximately 10 percent of the total world consumption, i.e., approximately $1.9 billion. This was down from 21 percent eight years ago. Counting total production in Europe increases this figure to $3.1 billion, or approximately 16 percent of the world's consumption.

At face value, all this seems pretty disturbing until three facts are taken into consideration.

Firstly, the continuing strength of the U.S. dollar versus the European currencies. In local currency terms, the European market last year grew approximately 19 percent, with the individual countries growing from a high of 37 percent (United Kingdom) to a low of 10 percent (France and West Germany). The U.S. figure was 27 percent. This year's growth looks like it will turn in at over 35 percent in U.S. dollars or some 55 percent in local currencies. Consumption is much stronger than the dollar figures give credit for.

Secondly, the "good behavior rule" does not apply in Europe. The European market is a free-for-all battleground where the U.S., Japanese, and European companies all fiercely fight each other for market share. Prices in Europe have been substantially lower than those for comparable devices in the United States for at least three years now, despite a 17 percent import tariff for most devices. This has had the effect of stimulating substantial numbers of design-ins of semiconductor components to replace the more traditional electromechanical solutions. A lot of these products have yet to reach production status. Again, this has further depressed the underlying strength of the consumption trends when measured in value terms.

Thirdly, the European semiconductor companies have traditionally sold their products predominantly into their own national markets. For example, in 1983, the European companies' non-European market share was only $0.4 billion—less than 3 percent market share. This, again, tends to undervalue their real growth and production value (due to the currency distortions) and at the same time points to a very real opportunity for substantial growth via the export markets, a fact that has not gone unnoticed by several of the major European semiconductor producers.



It is as a direct result of this new outward-looking policy coupled with a strong U.S. dollar that we expect to see a substantial improvement in the growth and performance of t:he European semiconductor companies.

Whilst no one can deny the general conclusion that, from a performance point of view, Europe has lagged behind the world, I believe that this has been a problem of implementation, rather than a fundamental lack of capability. Europe has always been a source of substantial technological innovation and creativity. I have listed here on this next slide a few examples, some of which may surprise you. Let me mention some Others:

• The first commercial electron-beam microscope

• The first commercial electronic computer

• The compact disk

We commonly attribute creation of the integrated circuit to Jack Kilby and Bob Noyce, and yet, the essential features were outlined some seven years earlier by the British engineer G. W. A. Duimner. More than that, in 1957, at the International Electronic Component Symposium held at the Royal Signals and Radar establishment in Malvern, United Kingdom, Dummer demonstrated a model of such an integrated circuit. Although purely a design exercise, that model was not so different from the circuit patented by Kilby two years later. Furthermore, the basic planar process fundamental to today's semiconductor technology was developed by a European, Jean Hoerni, when he worked for Fairchild in 1960. Perhaps the ultimate irony of all lies vith the ubiquitous TTL, invented in the United Kingdom by P. M. Thomson (patent number 24222/61).

And yet, in 1983, the U.K. semiconductor companies' worldwide IC market share was less than 2 percent and that of TTL was effectively zero.

It is not creativity or technological competence that have lacked in Europe, merely the drive and coromitunent to turn these ideas into mass-produced, cost-effective products. It is my contention that this situation can very readily change, and I believe that, in some significant instances, it has already done so. Fundamentally, it is attitudes that have to change. In order to be successful in industry today, it is imperative to consider world markets. And in order to be successful in world markets, one needs three basic ingredients: the right products, competitive manufacturing capabilities, and the people to develop and make these products and to bring them to the world marketplace with the courage and determination to succeed.

My next slide demonstrates that the international opportunities for Europe are there and can successfully be exploited. Here, we have plotted the European and worldwide semiconductor market growth for 1980 through 1983 with a projection for 1984. We have also plotted the



cumulative worldwide semiconductor revenues for all the European-owned semiconductor companies, together with the specific worldwide semiconductor revenues of Perranti and SGS. As you can see, both these companies substantially outperformed the worldwide market growth—and that in a time period of the worst semiconductor recession the industry has ever experienced.

Also on the semiconductor front, some of you may be surprised to realize that Thomson is the world's second largest zener diode manufacturer, and Philips and Siemens are amongst the world's largest KCL producers. Though not European owned, but almost exclusively European staffed and based, ITT is the world's second largest small-signal plastic transistor manufacturer and, since the early 1970s, has held a world leadership position in consumer ICs. A fully digital VLSI IC color TV chip set has been in production in Germany now for over a year, and a newly announced VLSI IC costing around .$10 adds videotex at roughly one-third the cost of the comparable conventional semiconductor solution.

In linear ICs, SGS has held a leadership position since the 1960s, and Ferranti has been producing gate array devices since 1972. Inmos, the U.K. start-up funded by the British government, has demonstrated substantial innovation in memories and is poised to follow suit in the microprocessor area with the much heralded transputer. And finally. Philips is still by far the number one semiconductor manufacturer and supplier in Europe and is, in addition, a major world electronic equipment innovator and manufacturer.

In the electronic equipment field, in addition to Philips, there are also now many other European success stories. For example, Thomson, Nixdorf, Sinclair, Olivetti, and Ericsson, to name but a few.

In the automotive market, names such as BMW, Ferrari, Mercedes, Porsche, and Rolls Royce are still synonymous with style, performance, and technological leadership.

In the field of military electronics, few people realize that Thomson is the world's second largest manufacturer behind Hughes, and in aerospace. Airbus Industrie, a European collaboration, has emerged as a viable alternative to Boeing's virtual dominance of the civilian airline market.

The emerging Information industry promises a major opportunity for Europe, and one where Europe's inherent strengths can readily be adapted. As I mentioned a while ago, a simple analysis of the current European performance statistics masks several key leading indicators.

Firstly, some European companies are seriously contending world leadership—and a few are even setting the pace—in several information industry segments, and Europeans have a long history of technological innovation.



Secondly, European information industry initiatives are backed and encouraged by stronger public support than in the United States; public R&D spending has increased by a factor of five in recent years.

Thirdly, Europe's latent demand for the information industry is enormous:

• Europe's GNP is the same order of magnitude as that of the United States.

• Europe's population, at 340 millioii people, is 55 percent greater than that of the United States.

m The number of electronics companies in Europe is similar to the number in the United States.

• Europe's literacy rate and educational standards are amongst the highest in the world.

• Information industry centers of excellence, research institutes and universities, as well as private and nationalized companies are emerging.

A recent EEC study shows that European companies have at least adequate capabilities in most of the necessary basic information industry technology segments.

European politicians and business executives are determined to ensure that Europe remains a factor in information technologies and is not squeezed out by the United States and Japan. Many also feel a need to become less dependent on U.S. technology, given the guarded U.S. policies on technology transfer and high-technology exports.

Certain areas of strength already exist, including videotex, integrated services digital networks (ISDNs), robotics and related CAD/CAM, ergonomics, applications software, and even microelectronic components. Substantial investments are currently being made in computational theory, artificial intelligence (AI), processor architectures, distributed systems, and consumer computing devices.

Strong support is being given by the European governments both in political and financial terms. All of them rank advanced manufacturing processes, robotics, and factory-of-the-future technology amongst their R&D priorities. Whilst precise implementation policies may differ, the overall objectives are similar. France has a centrally planned program directed and controlled by the French Ministry of Research and Industry. The United Kingdom, on the other hand, has only minimal planning at the national level, preferring a diffused, highly decentralized, and loosely coordinated strategy. The German approach falls in between the two and is characterized by well-coordinated, close cooperation between the



public and private sectors. France, Germany, and the United Kingdom are currently allocating around $4 billion annually in public funding to electronics and information industry-related R&D.

At the EEC level, a five-year, Europe-wide research program, ESPRIT, was recently launched, designed to foster pan-European cooperation and thereby give European information industry companies a better chance to compete more effectively worldwide by sharing front-end research costs, providing better cross-fertilization of ideas, reducing duplication, and pooling resources.

Joint ventures amongst European companies and non-European companies are becoming more common (for example, the recent decision of Bull, Siemens, and ICL to create a joint research center in Munich). ICL and Siemens have tapped the best of both U.S. and Japanese technologies. Olivetti and Philips have teamed up with AT&T in office automation and telephone exchanges, and Ericsson and Honeywell are cooperating on PBXs. Many other cooperative agreements are currently being discussed and, in addition, several European companies have become involved in associations, minor participations, and venture capital investments in start-up technology-oriented companies in the United States.

In closing, there are several reasons why Europe has not yet met its full technological potential. Europe has been slow to introduce and accept technology management as a discipline. Its expertise in commercialization has been lacking, primarily due to its past nationalistic market tendencies. In addition, its market skills have remain unproved outside of Europe. Lack of basic technology and innovation has never been a contributory cause.

We believe that these problems are resolvable, and, already, a new breed of European managers are emerging, managers that are far more willing to accept the challenges associated with today's high technology, including the willingness to break the barriers of industrial tradition and restrictive and inflexible working practices. In some fields, leading-edge customers and markets are appearing in Europe. In the United Kingdom, for example, per capita penetration of personal computers is higher than in the United States. The rate of penetration of videocassette recorders (VCRs) has been equally phenomenal. In 1982, the U.K. VCR market was only 10 percent smaller than that of the United States. At leading European automobile manufacturers such as Volkswagen and Fiat, the level of factory automation already exceeds that of the leading Japanese producers.

Given the substantial number and variety of information industry strengths that Europe is nurturing, we firmly expect the European companies to capture a substantial share of the emerging technology markets. Any U.S. electronics company that aspires to a global position must develop its European market simultaneously. Treating Europe as an incremental market—sometimes with obsolescent domestic products—is increasingly both unrealistic and injurious.



EUROPE--AN OVERVIEW

"ECONOMIC STAGNATION AND POLITICAL MALAISE DARKEN THE FUTURE OF A

ONCE PROUD AND POWERFUL CONTINENT.'

Newsweek--April 9, 1984

EUROPE--AN OVERVIEW (Continued)

"EUROPE'S ESCAPE FROM INFLATION--BUT WITH COMMODITY PRICES HIGH, CAN IT FOLLOW THE U.S. LEAD IN GROWTH?"

Business Week--August 27, 1984




"FALLING BACK IN A CRITICAL RACE--OLD ROADBLOCKS AND RIVALRIES BRAKE

EUROPE IN THE HIGH-TECHNOLOGY FIELD.'

Time--August 13, 1994


'NEW JOBS--THE REAL AMERICAN LESSON FOR EUROPE'*

Financial Times--August 14, 1994

- 10 -O 1984 Dataquest Incorporated Oct . 15 ed .-Reproduction P rohibited



"SEMI MARKET HITS 10-YEAR HIGH: BUT WHILE BOOSTING PRODUCTION OVERALL,

U.S. AND EUROPE WILL LOSE MARKET SHARE TO FAR EAST."

Electronic Business--August 1, 1984


•EUROPE--A TECHNOLOGICAL BACKWATER?'

DATAQUEST--October 17, 1984

- 11 -O 1984 Dataquest Incorporated Oct . 15 ed .-Reproduction P rohibited



WHERE ARE WE NOW?

THE EUROPEAN BACKGROUND

THE PRICE OF TWO MAJOR WORLD WARS WITHIN 25 YEARS WAS HIGH:

• HEAVY DEBT

• INDUSTRIAL AND ECONOMIC RUIN

• STARVATION

• POVERTY AND HOMELESSNESS



• TRUE POVERTY AND STARVATION HAVE LONG GONE.

• NOMINAL WAGES ARE UP TENFOLD SINCE 1960 (REAL LIVING STANDARDS UP FOURFOLD).

BUT IN SOLVING THESE PROBLEMS,

OTHERS WERE CREATED.

THE EUROPEAN SOCIAL AND ECONOMIC ENVIRONMENT

• DOES NOT R E W A R D SUCCESS AND INNOVATION

• ENTREPRENEURIALISM STIFLED • DISCOURAGES RISK TAKING • FAILURE IS A SOCIAL STIGMA • POSTWAR "BRAIN DRAIN"

IN ADDITION. EUROPE WAS LIVING BEYOND ITS MEANS.

.- 13 -O 1984 Dataquest Incorporated Oct. 15 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

EUROPE TODAY

• A NEW ERA OF REALISM IS EMERGING.

• ALL EUROPEAN GOVERNMENTS HAVE SET IN PLACE AUSTERITY PROGRAMS.

• REVITALIZED EUROPEAN INDUSTRY (COMPANY LED) IS EMERGING.

THE EXCESSES OF YESTERDAY HAVE NOW GIVEN WAY TO THE REALITIES OF TODAY.

WORLD SEMICONDUCTOR INDUSTRY PROFILE

CONSUMED IN

•

EUROPE UNITED STATES JAPAN REST OF WORLD

TOTAL

(BILLIONS OF D O L L A R S ;

1882

S 32 6.5 4.1 1.0

$14.8

1883

$ 3.4 8.3 5.6 1.5

SI 8.8

1

2 GROWTH •82 TO -83

6.A%

26.5Z 36.7Z 40.22

26.02

-




PRODUCED BY

COMPANES

EUROPEAN UNITED STATES JAPANESE

OTHERS

TOTAL

(BILLIONS OF DOLLARS)

1982

$ 1.6 8.0 5.1 0.1

$14.8

1983

$ 1.9 9.8 6.9 02

$18.8

% GROWTH •82 TO •83

11.7% 22.5Z 36.4% 86.8%

26.0%


PRODUCED IN (BILLIONS OF DOLLARS}

1982 1983

EUROPE $ 2.7 $ 3.1 UNITED STATES 6.8 8.5 JAPAN 4.7 6.4 REST OF WORLD 0.6 0.8

TOTAL $14.8 $18.8

Z GROWTH •82 TO 83

11.6% 25.6% 34.7% 42.4%

26.0%



EUROPEAN SEMrCONDUCTOR MARKETS

CONSUMPTION AND PRODUCTION ARE MUCH STRONGER THAN THE DOLLAR

FIGURES SUGGEST

• CURRENCY DISTORTIONS

• AGGRESSIVE PRICING

• HIGH LEVEL OF SELF-CONSUMPTION

EUROPEAN INVENTIONS AND DISCOVERIES

PRODUCT

BATTERY MTERNAL-CCMBUSTION ENGIhE ELECTRIC MOTOR CATHODE-RAY TUBE WIRELESS DESELENGIhE X-RAYS RADIOACTIVITY TELEVISION JET ENGINE RADAR

COUNTRY

ITALY FRANCE BELGIUM GERMANY ITALY GERMANY GERMANY FRANCE UNTTED KI<IGDOM UNTTED KNGDOM GERMANY



EUROPEAN INVENTIONS (Continued)

• FIRST COMMERCIAL ELECTRON-BEAM MICROSCOPE

• FIRST COMMERCIAL ELECTRONIC COMPUTER

• COMPACT DISK


INTEGRATED CIRCUIT G. W. A. DUMMER

1952




PLANAR PROCESS JEAN HOERNI

1960

TRANSISTOR-TRANSISTOR LOGIC (TTL) P. M. THOMSON

PATENT NUMBER 24222/61 UNITED KINGDOM



M * ViVy.'. >1.0v'»:rl.v<-J L • I I iL IJLTJJ .hi '•"^'V>v-,,

1 ^ 1 'i''fe'-iif,îff^^?|ag:^^

^^^^jKSSSSB^^^^^^SBB^S^^^^^^^^^S^^^^^^^SSS^S^^S^â^^jm .yîSjnSISSi^sffâSJiEra?;'

STRATEGY FOR SUCCESS

• RIGHT PRODUCTS

• COMPETITIVE MANUFACTURING

• DETERMINATION TO SUCCEED



RELATIVE GROWTH IN SEMICONDUCTOR MARKET (DOLLARS, BASE 1980 = 100)

240

FERRANTI

200

160

120

1980

^EUROPEAN COIVlPANIES

" ' , <- EUROPEAN MARKET

1981 1982 1983 1984

EUROPEAN SEMICONDUCTOR WORLD LEADERSHIP

• THOMSON--ZENER DIODES

• SIEMENS/PHILIPS--ECL

• ITT-INTERMETALL--PLASTIC TRANSISTORS/CONSUMER ICs

• FERRANTI--GATE ARRAYS

• SGS--LINEAR

• INMOS--MEMORIES

• PHILIPS--NO. 1 SUPPLIER IN EUROPE



EUROPE--A TECHNOLOGICAL SUPREMACY-ELECTRONIC EQUIPMENT

• PHILIPS--BROAD-RANGE MANUFACTURER

• THOMSON--MILITARY ELECTRONICS

• NIXDORF--POINT-OF-SALE EQUIPMENT

• SINCLAIR--HOME COMPUTERS

• OLIVETTI--OFFICE AUTOMATION

• ERICSSON--TELECOMMUNICATIONS

EUROPE--A TECHNOLOGICAL SUPREMACY-NONELECTRONIC EQUIPMENT

• AUTOMOBILES BMW. FERRARI. MERCEDES. PORSCHE. ROLLS ROYCE

• AVIONICS AIRBUS INDUSTRIE

• GOVERNMENT/MILITARY THOMSON-CSF



• READILY ADAPTABLE TO EUROPE'S STRENGTHS

• SOME COMPANIES ALREADY CONTENDING FOR WORLD LEADERSHIP

• STRONG PUBLIC SUPPORT • ENORMOUS LATENT DEMAND

-GNP -POPULATION -ELECTRONICS COMPANIES -HIGH LITERACY AND EDUCATION

STANDARDS -CENTERS OF EXCELLENCE

EUROPEAN TECHNOLOGICAL STRENGTH--COMMUNICATIONS

VIDEOTEX LOCAL AREA NETWORK WIDE AREA NETWORK

FRANCE

XXX XX XX

GERMANY

XXX

XX

UNITED KINGDOM

XXX XX XX

LEGEND: XXX INTERNATIONAL CAPABILITY XX SIGNIFICANT FOCUSED ACTIVITY X STRENGTH IN SPECIFIC AREAS

- 22 -O 1984 Dataquest Incorporated Oct . 15 ed.-Reproduction P rohibited


EUROPEAN TECHNOLOGICAL STRENGTH--ROBOTICS AND CAD/CAM/CIM

FRANCE LANGUAGES X SENSORS SYSTEMS X MACHINE VISION X SIMULATION AND MODELING X

LEGEND: XXX INTERNATIONAL CAPABILITY • XX SIGNIFICANT FOCUSED ACTIVITY X STRENGTH IN SPECIFIC AREAS

UNITED GERMANY KINGDOM

XX X XXX XXX XX X XX X

:

•

•

EUROPEAN TECHNOLOGICAL STRENGTH--MAN-MACHINE INTERFACE

ERGONOMICS FLAT-PANEL DISPLAYS GRAPHICS DISPLAYS VOICE SYSTEMS

LEGEND^ XXX INTERNATIONAL CAPABILITY XX SIGNIFICANT FOCUSED ACTIVITY X STRENGTH IN SPECIFIC AREAS

FRANCE

XX

GERMANY

XXX X

X

UNITED KINGDOM

X X X

- 23 -O 1984 Dataquest Incorporated Oct . 15 ed.-Reproduction Prohibited


EUROPEAN TECHNOLOGICAL STRENGTH--SOFTWARE

THEORY OF COMPUTATION PROGRAMMING LANGUAGES OPERATING SYSTEMS ARTIFICIAL INTELLIGENCE TOOLS APPLICATIONS

FRANCE XXX XX X

XXX X

XX

GERMANY XX X X

XX XX XX

UNITED KINGDOM

XXX X X

XXX XX XX


EUROPEAN TECHNOLOGICAL STRENGTH-MICROELECTRONICS

JOSEPHSON JUNCTION GaAs VLSI HARDENED

(MILITARY/SPACE/ NUCLEAR}

FRANCE

X XXX

X XX

GERMANY

X X

UNITED KINGDOM

X XXX

X


- 24 -O 1984 Dataquest Incorporated Oct . 15 ed .-Reproduction Prohibited


EUROPEAN TECHNOLOGICAL STRENGTH--COMPUTER SYSTEMS ORGANIZATION

PROCESSOR ARCHITECTURE

DISTRIBUTED SYSTEMS

CONSUMER COMPUTING DEVICES

FRANCE

XX

XX

X

GERMANY

XX

XX

UNITED

KINGDOM

XXX

XXX

XXX


STRONG GOVERNMENT SUPPORT--A COMMON THEME

• FRANCE--CENTRALLY PLANNED AND CONTROLLED PROGRAM

• UNITED KINGDOM--HIGHLY DECENTRALIZED AND LOOSELY COORDINATED

• GERMANY--CLOSE COORDINATION BETWEEN PUBLIC AND PRIVATE SECTORS



EEC ESPRIT

• FIVE-YEAR. EUROPE-WIDE RESEARCH PROGRAM

• PAN-EUROPEAN COOPERATION

• MORE EFFECTIVE COMPETITIVENESS -SHARED FRONT-END RESEARCH COSTS -BETTER CROSS-FERTILIZATION OF IDEAS -AVOIDANCE OF DUPLICATION OF ACTIVITIES -RESOURCE POOLING

JOINT VENTURES AND OTHER ASSOCIATIONS

• BULL. SIEMENS. ICL JOINT RESEARCH CENTER

• ICL AND SIEMENS WITH VARIOUS U.S. AND JAPANESE COMPANIES

• OLIVETTI AND PHILIPS WITH AT&T

• ERICSSON WITH HONEYWELL

• OLIVETTI WITH VLSI TECHNOLOGY

• MANY MINOR PARTICIPATIONS AND VENTURE CAPITAL INVESTMENTS



EUROPE DOES NOT LACK IN BASIC TECHNOLOGY OR CREATIVITY.

EUROPE WILL CAPTURE A SUBSTANTIAL SHARE OF THE EMERGING WORLD HIGH-TECHNOLOGY MARKETS.



(::)aDataqiiest

Abstract

Dataquest Conference Presentation

Semiconductor Equipment: Key to Pervasiveness

W. R. Bottoms

The revolution in electronics has had an impact on the economic

life of the entire free world. Electronics has indeed become

pervasive in the last ten years. The fundamental driving forces

for the pervasiveness of solid state electronics have been the

decreasing cost of electronic functions delivered and the

increasing value of the applications of those electronic

functions. There have been many significemt contributors to the

decreasing cost of producing electronic functions beginning with

the physicists and electrical engineers who defined the basic

science upon which the industry is based and continuing with

the circuit designers and the process engineers that have

developed the process technology required to take these

innovative designs from paper into silicon. During the last few

years, developments in semiconductor equipment have been a major

factor enabling the continued reduction in the cost of

- 1 -


electron functions. Decreasing feature size, increasing process

yields, and the economic advantages of producing in very large

volumes have all been realized through a combination of

innovation in circuit designs and processes and through

developments in semiconductor equipment. Production equipment

for lithography, etching, metallization and high temperature

processing have all posed limits in the past to the continuation

of decreasing feature size. Solutions to these limitations have

been provided by the semiconductor equipment industry.

Over the next few years the role played by the equipment

industry in the continued expansion of the pervasiveness of

solid state electronics by reducing costs will continue to

increase.

- 2 -


vanan

KEYS TO PERVASIVENESS OF

SOLID STATE ELECTRONICS

DECREASING COST PER FUNCTION INCREASING VALUE OF APPLICATIONS TRANSPORTABILITY OF PRODUCTION CAPABILITY POPULARIZATION OF ELECTRONICS INCREASED LEISURE TIME

DECREASING COST PER FUNCTION

FEATURE SIZE DESIGN INNOVATION PROCESS YIELD PRODUCTION VOLUME EFFICIENCIES

PRODUCTION LIMITATIONS FOR SUBMICRON DEVICES

• LITHOGRAPHY • ETCH • METALIZATION • HIGH TEMPERATURE PROCESSING

- 3 -


varian

FERTURE SIZE RS R FUNCTION OF

LITHOGRRPHY TECHNOLOGY

IQ

U N t-i

cn u 3 t-(T U li. .5 ~

,^<^^*

^^

7A 7G 78 60 82

YEAR

84 86 86

- 4 -


vartan

FEATURE SIZE RS fl FUNCTION OF

METRLIZRTION TECHNOLOGY

U N (-1 tn

u Q: D I -cr u LI.

10

-5«0»» SP^' l^-'t' .Rt*"

74 7G 78 60 62

YEAR

64 86 88

- 5 -

Dataquest Incorporated, A Subsidiary of A.G. Nielsen Company /1290 Ridder Parl< Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973

vanan

PRODUCTION LIMITATIONS FOR SUBMICRON DEVICES

HIGH TEMPERATURE PROCESSING

• DOPANT REDISTRIBUTION • SUBSTRATE DIMENSIONAL INTEGRITY • MATERIALS COMPATIBILITY

— ALUMINUM — POLYAMIDE

RAPID THERMAL PROCESSING

APPLICATIONS

• IMPLANT ACTIVATION • SILICIDE ACTIVATION • PSG REFLOW

- 6 -


varian COST PER A OF IMPLANT CAPACITY

1.00 r r — I — I — I — I — T

, Sarlal Piac*n

1 1 T

8 0.10 u m

••tcfi Pfoeatt

0-0l| 1 I ' I I I 72; 74 76 78 10 U

Tim* (Vaart)

COST PER 5Q INCH/HR CORTED

Q: I \ z o in \

1.5 -

1 -

B 7B

j j ^«

— . j - u

?9 BQ Q l

YERR

- 7 -

82 83

SOURCE! VRRIflN


vanan

DRIVING FORCES FOR THE INCREASING VALUE OF APPLICATIONS

RISING ENERGY COSTS EXPANDING COMMUNICATION REQUIREMENTS INFORMATION EXPLOSION MILITARY SYSTEMS

RISING ENERGY COSTS

PERCENTAGE PRICE INCREASE 1970 ~ 1983

NATURAL GAS 423% ELECTRICITY 390% COAL 356% OIL 658%

SOURCE: STATISTICAL ASSTRACT OF THE UMTED STATES

- 8 -


varian EXRRNDING COMMUNICRTIONS REQUIREMENTS

160

If) u 150 r O I Q. U 140 U

L-O

130 7

^ 120

-I 110 7

100 70 72 74 76

YERR

78 80 82

SOURC£: FCC

U.S. MILITARY IC CONSUMPTION

0 L, 1 I I

82 6 3 84

YEAR

- 9 -

85

SOURCE: ICC


vaiian

TRANSPORTABILITY OF PRODUCTION CAPABILITY

TECHNOLOGY IS IN THE EQUIPMENT AUTOMATION DECREASES EDUCATION REQUIREMENT MANPOWER AVAILABILITY "FREEWHEELING" LICENSING EQUIPMENT, MATERIALS, SUPPORT, AND FINANCING

AVAILABLE THROUGHOUT THE FREE WORLD

TECHNOLOGY IS IN THE EQUIPMENT 3180/3190 SYSTEMS

PROCESS DEVELOPMENT

FIRST PRODUCTION USE

81

82

MATERIALS ALUMINIUM ALUMINIUM ALLOYS TITANIUM-TUNGSTEN-

ALUMINIUM SEQUENTIAL PLATINUM DOPED SILICON

CIRCUIT TYPES MOS MOS

BIPOLAR

BIPOLAR ALL

83 TUNGSTEN AND TITANIUM SILICIDES

84 TANTALUM AND MOLYBDENUM SILICIDES ™ ^

- 10 -


vanan

POPULARIZATION OF ELECTRONICS

COMPUTERS IN INSTRUCTIONAL USE IN U.S. ELEMENTARY AND SECONDARY SCHOOLS

1980 1982 MICROCOMPUTERS 30,715 96,462 TERMINALS 21,536 24,446

TOTAL 52,251 120,908

SOURCE: U.S. NATIONAL CENTER FOR EDUCATION STATISTICS

INCREASED LEISURE TIME

ELECTRONIC GAMES VIDEO EQUIPMENT CONSUMER AUDIO EQUIPMENT TELEVISION

R&D RESOURCES OF SEMICONDUCTOR EQUIPMENT MANUFACTURERS

EQUIPMENT INDUSTRY SALES $5.58 B EQUIPMENT INDUSTRY R&D .46 B

SOURCE: VLSI RESEARCH, INSTAT

- 11 -


vanan

FERTURE S I Z E R S R FUNCTION OF

FTCH TFCHNOLOGY

U N t—t

in u Q: 13 »-d U li..

10

1 ' -74

S P « « * ^ ^ f f s t *

t i t t*

^f^' .?si^

crtv*

.(*'>=' i^e iot»

ttO*

7B 78 80 82

YERR

84 86 88

- 12 -


(l^aDataquest

Dataquest

SEMICONDUCTOR EQUIPMENT: KEY TO PERVASIVENESS

Dr. W. R. Bottoms President

Semiconductor Equipment Group Varian Associates

Dr. Bottoms has been President of Varian Associates' Semiconductor Equipment Group since 1981. Previously, he served as a member of the Electrical Engineering Faculty of Princeton University before joining Varian as Manager of Research and Development. He later became General Manager of the Varian/Extrion Division. He has also served as Chairman of the Technical Advisory Subcommittee on Semiconductor Manufacturing Materials and Equipment for the Export Control Commission of the Department of Commerce, and is Chairman of the National Research Council Evaluation Panel for the National Bureau of Standards. In addition, he has authored many papers on equipment and process technology for the semiconductor device industry. Dr. Bottoms received his Ph.D. in Physics from Tulane university.




Dataquest

THE IMPACT OF WORKSTATION PROLIFERATION

Aryeh Finegold President

Daisy Systems

Mr. Finegold is a founder of Daisy Systems Corporation and has served as President and Chief Executive Officer of the company since its incorporation in August 1980. Previously, he spent four years in various engineering management positions at Intel Corporation. Prior to that, Mr. Finegold was with Elbit Computers Ltd., where he held several engineering positions. Mr. Finegold holds a B.S. degree from Technion Institute - Israel Institute of Technology.




Dataquest






Dataquest

SERVICE, SOFTWARE, AND SILICON

Wilfred J. Corrigan President, Chairman, and Chief Executive Officer


Mr. Corrigan is President, Chairman and Chief Executive Office of LSI Logic Corporation. Formerly he was President, Chairman, and Chief Executive Officer of Fairchild Camera and Instrument Corporation in Mountain View, California. Before joining Fairchild, Mr. Corrigan was Director of Transistor Operations at Motorola Inc.'s Semiconductor Products Division in Phoenix, Arizona. He received his B.S. degree in Chemical Engineering from the imperial College of Science, London.




LSI LOGIC CORPORATION

LSILOeiC CORPORAnON

WHAT DISTINGUISHES THE SUCCESSFUL SEMI-CUSTOM SUPPLIER

IN TODAY'S MARKET. . .

IT IS NO LONGER THE •T?OMANCE OF THE SIUCON"...

BUT RATHER THE AVAILABILITY OF COMPREHENSIVE, FULLY INTEGRATED, EASY-TO-USE, FAST "SOFTWARE"

HE WHO HAS THE BEST SOFTWARE CONTROLS THE HIGH GROUND.

- 1 -


CHALLENGE

SYSTEM AND CHIP COMPLEXITY INCREASING

SHRINKING SYSTEMS LEVEL DEVELOPMENT TIMES

ENGINEER SHORTAGE

REQUIRE BIPOLAR SPEED WHH CMOS POWER

LSIUXSIC CORPORATION

LSI LOGIC MEETS THE CHALLENGE

• HIGH DEIMSnr HCMOS ASICs - UTIUZING 3 M AND 2 /i GATE

LENGTH AND DUAL LAYER METAL

• COMPUTER AIDED ENGINEERING (CAE) - UTIUZING OUR PROPRIETARY LDS™

DESIGN SOFTWARE

- 2 -

Dataquest incorporated, A Subsidiary of A.G. Nielsen Company /1290 Ridder Parl< Drive / San Jose, CA 95131 / (408) 971-9000 / Telex 171973

U l LOGIC CORPORATION

IMPLEMENTATION WE CHOSE GATE ARRAYS

AS INITIAL VEHICLE TO IMPLEMENT CHARTER.

- /

•N

151 LOGIC CORPORATION

STRATEGY FOR THE 80's n. ENGINEERING/SOFTWARE

• REGIONAL DESIGN CENTERS

• WORK STATION INTERFACE

• EVOLUTIONARY SOFTWARE (LDS) / - GATE ARRAY...SINGLE CHIP

- GATE ARRAY...MULn CHIP TM / - ZYCAD SUPPORT

- FAULT GRADING - STRUCTURED ARRAY

I - STRUCTURED CELL

LDS

MAINTAIN ENGINEERING/SOFTWARE LEADERSHIP & CONTINUE TO SET THE STANDARDS FOR "ASIC" MARKETPLACE.

- 3 -



THE LDS ** CAE APPROACH

• USER FRIEIVJDLY 2 DAY TRAINIIMG

• EASE OF ACCESS REGIONAL DESIGN CENTERS

• PROVEN # DESIGNS COMPLETED

• PORTABLE WORK STATION INTERFACE

• SYSTEM LEVEL SIMULATION ZYCAD

PORTABILITY OF LDS'**

• FUNCTIONAL UBRARIES FOR: - VAUD LOGIC NOW - DAISY SYSTEMS NOW - MENTOR GRAPHICS NOW

• VERIFY SOFTWARE FOR: - MENTOR GRAPHICS NOW - DAISY SYSTEMS NOW - V A U D LOGIC NOW

• FULL LDS~ FOR IBM & IBM COMPATIBLE NOW

• FULL LDS™ FOR D.E.C. VAX AUGUST '84

- 4 -


1 9 LOGIC OORPORATION

f9S2

m3-

1984.

nas-

UK'I TEOAS BASED unrr OSLAT uMULAnoN

LDS"" SOFTWARE EVOLUTION

los-i LAraur svsnM

M n SHtOM UVBt MCIAL HQHOI

l O H I T X X S M BAS£0 ACTUAL SElXy SIMULATION

JM 2 LATER METAL HCMOS

wnt uetoxjt srsTEMi

ZttZumsK MEWL HOMOS

2|i SmucniREO ARRAirS 2li SmUCTUREO CELL

LDSHn tStlH' •ASeO SIMULAnON SntUCTURCD ARItAr

I LArOLTT SYSTEM JHUUICHIP SlMULmON 'IHSIM

HARDUMRE CVEVT MWULWTQN TSIM'

I STRUCTURED CELL ~*nLATfOUT SYSTEM

mutr SiMuiAnoN "niM' FUTune

COMPOSAILE ARRAYS

2 3 4 5 « 7 8 RELATIVE TCSIGN SOPHBTICAnON OF RESUITANT PROOUCT

r •N

LSItOGIC

DESIGN INTERFACE FLEXIBILITY

CUSTOMER WORK

STATIONS It h CUSTOMER KNG

CUSTOMER I N O

/ PUli. DESIGN \ / A m O U U AND \

/ SILICON GUARANTEE \ /rwiott TO MANUKACTUREV

OISTOMER CNC

- 5 -


LSIUM3IC GORPORAnON

LSI LOGIC NOW OFFERS THREE TYPES OF APPLICATION

SPECIFIC IC PRODUCTS.

• LOGIC ARRAYS

t* ^ > N • STRUCTURED ARRAYS

• STRUCTURED CELL

tavoGK

S ggSmoN PRODUCT LINE EVOLUTION

SJO-

T-4.0-

g 3.0-

I"-0 3 -

SINGLELArES IHEXU

= > UPTO • »

gPTO IM ^

TWO LATER MIEIU

UTTO

J^ LOGIC VtVJUC n a otCAHA

s n ^

XM

C i>

imtfLIUVCD c t u

UPTO joanMi

THREE LAYER MEIAL

— I 1 1 1 1 2J S 10 IS 20

coMPLExirr OF 2 Mnn NANO (K) 40

- 6 -



LOGIC ARRAYS

• ORIENTED TOWARD GENERAL PURPOSE LOGIC USE. METAL MASK(S) PROGRAMMABLE. LO\X^ST DESIGN COST.

LL 3000 SERIES

U . 5000 SERIES

LL 7000 SERIES

3S MICRON, ONE^ArER METAL

3 MICRON, TWO—LAYER METAL

2 MICRON, TWO-LAYER METAL

H^"- 8000 SERIES — 2 MICRON, TWO-LAYER ME1A1, HIGH OUTPUT DRIVERS

Lsiuxac

STRUCTURED ARRAYS • ADDS MEMORY A N D OTHER STRUCTURES TO LOGIC ARRAY.

aRCurrs CONTAIN STRUCTURES SUCH AS RAM, ROM, ALU'S ETC. P R O G R A M M E D BY METAL AND RECONFIGURABLE.

PROoua

ISA 2001

UA2002

ISA 2003

ISA 2004

tSA2005

INmAL OFFERINGS IN 2 MICRON TECHNOLOGY

LOGIC ARRAY CAFES

2700

«ooo

M O O '

AOOC" aooi 2000-4000

RAM

2.2KBrrs iKBir

OUALPORT 4KBrr

SKBIT

ROM

32K-«4K BITS

OTHER

16 BIT ALU

32 BIT ALU OPTIONAL

4x2901 OPTIOIMAL

I/O

144

2oe

200

222

180

AVAILABLE

03-84

03*84

oras

04*84

otvs

J - 7 -


STRUCTURED CELLS

• FULL CUSTOM DIFFUSION AND METAL FOR THE MAXIMUM FLEXIBILmr, DENSITY AND PERFORMANCE. DESIGN ELEMENTS INaUDE RAM, ROM, PLA, STANDARD CELLS, INTERNAL LOGIC ARRAYS AND MEGACELLS —VERY COMPLEX FUNCTIONS.

• T U ^ MICRON (LSC20 FAMILY| TECHNOLOGY AVAILABLE Q3 84, SCALABLE TO t.6 MICRON IN 1985 (LSC16 FAMIUT).

• JOINT DESIGN AND SECOND-SOURCE PARTNERSHIP BETMt EN LSI LOGIC AND AMD. LSI LOGIC HAS RIGHTS TO CONVERT ANY AMD CMOS LOGIC IC TO A MEGACELL.

- 8 -


(::)a Dataquest

Dataquest

LSI GROWTH: 1985-1995

Jack Carsten Senior Vice President

General Manager, Components Group Intel Corporation

Mr. Carsten is Senior Vice President and General Manager of the Components Group at Intel Corporation. He joined Intel in 1975 as Vice President and Director of Marketing. Previously, Mr. Carsten was employed by Texas instruments for 13 years, most recently as General Manager of Tl's MOS Division. Mr. Carsten graduated from Duke University with a B.S. degree in Physics.




LSI GROWTH: 1984-1994

Jack Carsten

Logarithmic growth cannot continue indefinitely. Whether we examine the multipli

cation of bacteria, population growth, or the growth of industries, external

limiters eventually prevail. Thus, when I was aslced to examine the long range

outlooic for our industry, I noted that Dataquest had already forecasted world

semiconductors at $175 billion in 1994. This would malce us, in all probability,

the largest manufacturing enterprise in the world, surpassing automobile man

ufacture, which currently stands at about $120 billion with a relatively low

growth rate.

If a Statistical approach to market projections strains your credibility, as it

did mine, a historical perspective may lend some clues. After a good bit of read

ing on industrial growth over the past fifty years, it became apparent to me that

the industries which had the most difficulty in gaging growth were the so called

"engine industries," and those end equipments using them. It occurred to ine that

semiconductors are taking on "engine" characteristics—with most processing appli

cations now microprocessor driven, with control, memory, and analog features all

being utilized in some predictable ratio. In fact, this is a pattern similar to

that which occurred in the use of internal combustion or jet propulsion engines in

vehicles, or the use of electrical motors in appliances and machines.

- 1 -


I decided to test a hypothesis that semiconductors are the "engines" of electronic

equipment, especially data processing. There is a good bit of statistical infor

mation available on these industries and they have similar characteristics.. I had

data gathered on four "engine" groups in addition to semiconductors, as shown in

Fig. 1.

All of the engine industries had some characteristic patterns, one of which was

high growth. Discounting inflation, all showed a 10-15X real growth over an ex

tended period. There were several phases to their maturation, but saturation of

end usage (though seldom forecasted) inevitably occurred. Furthennore, their

costs followed learning curve predictions for common manufacturing technologies.

Fig. 2 is a plot of the growth rates of several engine industries versus world

semiconductors. In order to minimize the distortion of inflation, I have used

1967 dollars. I also offset the time scale for world semiconductors by twenty-

five years. This graph shows our industry has already exceeded the peak revenues

for the engine industries. However, if I were to talce integrated circuits alone

(about half of today's semiconductor maricet), the curves look very similar.

Each of the engine industries went through growth patterns that are remarkably

similar to semiconductors, even though, in many cases, they occurred a long time

ago. They have been characterized as having three distinct phases.

During the first, or formative period, there was a phase of entrepreneurship and

proliferation of producers. In most cases, there was also a large proliferation

of end equipment manufacturers, who were largely assemblers of engines. Looking

at the long list of automobile companies in Fig. 3, one is sorely tempted to

- 2 -


compare to today's list of personal computer manufacturers and speculate as to

their survival rate.

After the formative period of "engine" manufacture which established standard man

ufacturing techniques, there followed a normative period of fifteen to twenty

years where process maturation occurred, and independent tooling vendors emerged

to produce the tools necessary to efficiently build the "engines". During this

period, considerable consolidation occurred whenever the economy was weak, both

for engine vendors and for end equipment manufacturers. With the availability of

manufacturing expertise from third party tooling vendors, vertical integration was

first successful and became a growing trend.

Fig. 4 shows a list of U.S. semiconductor companies in business today (I hope it's

accurate). Already about 25% of these names are firms who are not only owned by

electronic end equipment companies, but at least a portion of their output is

being used in internal applications. I believe the percent of semiconductor

revenues shipped internally is at least 25% and is growing. This trend seems to

be accelerating even as our industry moves to higher levels of technology.

The third phase of growth in the engine industries has been called the integrative

period. In every case, international proliferation of manufacturing occurred,

made possible by a major tooling vendor industry. Production of the product

became a subject of national pride and governmental intervention. Most of the

"engine" firms were taken over by end equipment manufacturers. (Jet engine manu

facturing is a notable exception here.) Independent vendors declined or became

specialty manufacturers.

- 3 -


In every case, the proliferation of manufacturing expertise and worldwide capacity

growth enabled the industry to saturate their end markets such that the bulk of

the application of "engines" became a replacement market. Under these circum

stances, technology can stagnate and research and development often declined.

If there is a cheery note to this picture, it is that the integrative period was

at least ten to twenty years, and the slowing of growth was well signaled by end

use trends. In order to understand where the semiconductor end use market might

be headed, I extended the U.S. installed bases of some major inventions (Fig. 5)

to 1994, and compared them with the projected growth in the computer. If this

estimate Is accurate, we will have one computer for about every four people in the

United States, and the replacement market could well be a rapidly growing share.

However, lest we consider one computer per person is an extraordinarily high

estimate, I used another "engine" industry which is now clearly saturated in end

use application for contrast. Fig. 6 is my personal 1984 fractional horsepower

motor Inventory. A total of 29 FHP motors were in use in appliances, clocks,

automobiles, fans,—even the motor on my electronic typewriter/printer. I esti

mated their manufacturing cost as $248.00 and their average lifetime as ten years.

This puts my annual consumption at $24.80, about twice the U.S. average consump

tion according to manufacturers' records. It seems reasonable to conclude that

there are ten to fifteen fractional horsepower motors in use in the United States

for every man, woman, and child.

In Fig. 7, I plotted the fractional horsepower electric motor market versus world

semiconductors. As you can see, they had similar growth rates until the early

- 4 -


1960's when FHP motors declined from approximately 20% per year growth to about

6%. Industry journals at the time are full of complaints about foreign competi

tion, industry consolidation, and vertical integration. Whatever the cause, the

industry is now growing at little more than the rate of growth of the overall

economy, after a period of almost thirty years of growth similar to semiconduc

tors .

The history of the engine industries has many fascinating parallels to our own.

They were all the growth industries of their day, and all of them made dramatic

changes to the world economy. However, they were often overforecasted during

periods of high growth.

It is certainly possible that our industry will continue to be the world's fastest

growing industrial segment (for its size) and the Dataquest estimate for a 21%

compounded annual growth rate will enable world semiconductors to reach $175

billion in 1994. At that time, Dataquest estimates that MOS will be over

two-thirds of the industry at $129 billion (Fig. 8). 1984 certainly meets that

criteria, with a semiconductor growth rate of around 55%. However, if we see the

decay of growth rate experienced by the engine industries, particularly beyond

1990, I thinic the MOS estimate is too aggressive. Damping MOS so that the

compounded growth rate through 1994 is only 20% per year, the worldwide MOS

industry would be approximately $60 billion. If the other segments of the

semiconductor market grew at the rate that Dataquest forecasted, we would still

have an overall industry of over $120 billion in 1994. That still looks

aggressive to me.

* * *

- 5 -


Bibliography

1. Sears, Stephen W., The Automobile in America, American Heritage Publishing Co., New York, 1977.

2. Kittieson, B. R., Competition in the Fractional Horsepower Electric Motor Industry, University Microfilms International, London, England, 1961.

3. Land, George T., Grow or Die, Dell, New York, 1974.

4. Naisbitt, John, Megatrends, Warner Books, New York, 1982.

- 6 -


INDUSTRIES EXAMINED HISTORICALLY

1914-1982

• STEAM ENGINES • INTERNAL COMBUSTION ENGINES • ELECTRIC MOTORS • JET ENGINES • SEMICONDUCTORS

10

III

to o Q

O 13

S 0.1

ojn

GROWTH OF ENGINE INDUSTRIES VS WORLD SEMICONDUCTORS

(1967 DOLLARS) — I — 1965 1975

— I 1 1 1985 TIIME SCALE FOR WORLD S/C

WORLD S/C

FRACTIONAL HP MOTORS

STEAM ENGINES

1930 1940 1950 1960 1970 1980 1990

- 7 -


o £. ST i3 c (D (A

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SOME U.S. AUTO COMPANIES THAT DIDN'T SURVIVE

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COLT

COLUMBIA

CORD CROCK

CROSLEV

CUNNINGHAM curriNQ DAN MTCH DESOTO

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ELMORE ESSEX

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FIFTY-FtFTY FLANDERS

FLINT

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FRANKLIN

FRAZEH

FRIDDLE GARDNER

GLIDE

GflAHAM-PM»

HALF-BREED

HAYNES-APPERSON HICKS

HUPMOBILE

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JACKSON

JEFFEflY

JORDAN

KANSAS CITY HUMMER

KANSAS CITY WONDER KING KISSILE

KLINE KLINK

KNOX KROTZ

U PETITE

LASALLE

LEXINGTON UBERTY

LOCOMOBILE LUNKENHEIMER LUVERNE

LUXOR MARMON

MARQUETTE

MAXWEU MERCER

MERCILESS

METZ MITCHELL

MOON

MOTOR HORSE NASH

NORTHERN OAKLAND OVERLAND

OWEN MAGNEhC MCKARD

PAGE

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PtERCE-AflROW

POPE-TOLEDO POPE-WAVERLY

RAMBLER

HANIER RAPID

RAUCH A LANG

REEVES REO

RICKENBACKER

RUXTON SAXON

SCRIPPS-BOOTH SELF-CONTAINED

SHERIDAN

SIMPLEX

SNOeURNEil STANLEY

STEARNS

STEARNS-KNKIHT STEEL BALL

STEPHENS

6TEVENS-DURYEA STRATTON

STUDEBAKER

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THOMAS

TIFFANY-BUOU

TUCKER

UNIQUE VIKING

WAYNE WELCH

WHIPPET WHITE

WILLS SAMil I^AME WILLYS

WIHTON WOODS

WORTH

VALE

ABOiir SOOOiCMmMIES ATTEHPriDTt l Wlil iUnCTURE A U T O S

CO -^l CO

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U.S. SEMICONDUCTOR COMPANIES IN BUSINESS NOW

ADVANCED M I C R O D E V I C E !

AMER ICAN MICROSYSTEMS

APPL IED SOLAR ENERGY

ARRAY DEVICES

A R R A Y T E C H N O L O a Y

AVANTEK

BURR-BROWN RESEARCH

B U R R O U G H S / M I C R O C O M P O N .

CALIFORNIA DEV ICES

CAL IFORNIA M I C R O DEVICES

CENTRAL MICROWAVE

CENTRAL S E M I C O N D U C T O I I

CHERRY SEMICONDUCTOR

' CITEL

VO CLAIREX ELECTRONICS

I CODI SEMICONDUCTOR

COMDIAL SEMICONDUCTOR

COMPENSATED DEV ICES

CONTROL DATA/MICROC IRC

CSR INDUSTR IES

C U S T O M C O M P O N E N T S

C U S T O M MOS ARRAYS

CYPRESS S E M I C O N D U C T O R

DATEL-INTERS IL

DEXCEL

DIGITAL E O U I P M E N T C O R R

DIODES INC .

DIONICS INC,

E a S a INC. EDAL INDUSTRIES ELECTRONIC ARRAYS ELECTRONIC DEVICES ELECTRONIC TRANSISTOR ELECTRONICS S ENERGY TECH ELITE SEMICONDUCTOR PROD ELM STATE EUCTRQNIC8

EXAH INTEGRATED SYSTEMS FAIRCHILD CAMERA S INSTR. FERRANTI ELECTRIC FUJrrSU MICROELECTRONIC* GE INTERSIL GENERAL DIODE GENERAL ELECTRIC SEHICON GENERAL INSTRUMENT CCMIR GENERAL OPTRONICS GENERAL SEMICONDUCTOR GENERAL TRANSISTOR GERMANIUM POWER DEVICES GIGABIT LOGIC GOULD-DEXCELL DIVISION GTE MtCnOCtRCUITS HARRIS SEMICONDUCTOR HEI, INC.

HEWLETT-mCKARD/COMPUTER HONEYWELL, INC.

HUGHES AIRCRAFT

HUTSON INDUSTRIES HYBRID SYSTEMS IBM CORPORATION

IN MOS CORP

INTEGRATED DEVICE TECH.

INTEL CORPORATION INTERDESIGN INC.

INTERNATIONAL DEVICES INTERNATIONAL MICROCIRa INTERNATIONAL MICROELEC. INTERNATIONAL MICROWAVE INTERNATIONAL RECTIFIER ITAC CORPORATION

ITT SEMICONDUCTOR LAMBDA SEMICONDUCTORS LANSOALE TRANSISTOR « EL

LASER DIODE LABORATORIES LASERDYNE CORP.

LATTICE SEMICONDUCTOR

LINEAR TECHNOLOGY CORP.

LITRONIX

LORAL FREQUENCY SOURCES

LSI COMPUTER SYSTEMS

LSI LOGIC CORR H/A COM INC.

MASTER LOGIC CORP.

MCE SEMICONDUCTOR

METELICS CORP. MICnO-REL DIV/MEDTRONICS

MICROCIRCUITS TECHNOLOGY

MICRON TECHNOLOGY

MICROPAC INDUSTRIES

MICROPOWER SYSTEMS MICHOSEMI CORP

MICROWAVE DIODE

MICROWAVE SEMICONDUCTOII

MITEL INC.

MONOLITHIC MEMORIES

MONOSIL INC.

MOSTEK CORPORATION

MOTOROLA INC.

MSI ELECTRONICS NAE INC.

NATIONAL ELECTRONICS

NATIONAL SEMICONDUCTOR

NCR MICROELECTRONICS NEC ELECTRONICS

NITRON INC.

OPCOA/REFAC ELECTRONICS OPTEK

OPTOELECTRONICS INC.

RARAMETRIC INDUSTRIES

PLESSeV SOLID STATE

POLYCORE ELECTRONICS

POWER SEMICONDUCTORS POWER TECH INC.

POWER TRANSISTOR CO.

PPC PRODUCTS CORP

PRECISION MONOLITHICS

RAYTHEON SEMICONDUCTOR RCA CORP. SOLID STATE

RECTIFIER COMPONENTS RIEHL TIME CORPORATION

ROCKWELL ELECTRONIC OEV. 8CHAUER MANUFACTURING

SEEQ TECHNOLOGY SEMI PROCESSES INC.

5EMICOA

SEMICON SEMICONDUCTOR

SEMICONDUCTOR PRODUCTS SEMICONDUCTOR TECHNOLOGY

SEMIKRON INTERNATIONAL

SEMITRONICS CORR

SEMTECH CORP.

SENSITRON SEMICONDUCTOR

SENSOR TECHNOLOGY

SENSVM INC. SIEMENS COMPONENTS

SIGNETICS CORP

SILICON GENERAL SIUCON SYSTEMS

SILICON TRANSISTOR CORP.

SILICONIX CORP. SOLAR POWER CORP.

SOLAREX CORR

SOLID POWER CORP.

SOLID STATE DEVICES

SOUD STATE SCIENTIFIC

SOLITRON DEVICES SRACE POWER ELECTRONICS

SPERRV SEMICONDUCTOR

SPRAGUE ELECTRIC ST-SEMICON INC.

STANDARD MICROSYSTEMS

STORAGE TECHNOLOGY CORP.

SUPERTEX INC.

SYNERTEK

SYNMOS TECCOR ELECTRONICS

TELARIS MICROCOMPUTERS TELEDYNE INC.

TELEDYNE SEMICONDUCTOR

TEXAS INSTRUMENTS INC. THOMSON-CSF SEMICONOUCC

TOSHIBA SEMICONDUCT. USA

TRANSISTOR SPECIALTYS INC

TRW INC.

UNITED DETECTOR TECHNOL

UNITRODE CORPORATION

UNIVERSAL SEMICONDUCTOR

VAHIAM SOLID STATE

VARO SEMICONDUCTOR

VATEC INC. VEECD INSTRUMENTS

VEECO/LAMBOA SEMICONDU^

VLSI TECHNOLOGY WEITEK CORP.

WESTERN DIGITAL

WESTERN ELECTRIC WESTINCHOUSE SEMICONDUCT

XCITON CORR

XICOR INC.

ZILOG

ZYMOS CORR

CO - N I

u

U.S. INSTALLED BASES OF MAJOR INVENTIONS VS. THE POPULATION

5 o

duum

200M

i l M M lUUIWI

10IM

1M

100K

10K _ L J

I 1 1 I POPULATION

TELEPHONES _^

/ AUTOMOBILES

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TTELEVISIONS /

j COMPUTERS/

/

/ '

1 l / 1 1

1893 1913 1933 1S53 1973 1994

HISTORICAL DATA e . INTERNATIONAL DATA CORP. FORECAST DATA • INTEL CORP. ESTIMATE.

MY 1984 FHP MOTOR INVENTORY

HOME 14 CARS (2) 11 OFFICE _ 4 TOTAL 29

MANUFACTURING COST: $248 AVERAGE LIFETIME: 10 YEARS MY ANNUAL CONSUMPTION: $24.80 U.S. ANNUAL AVERAGE CONSUMPTION ACCORDING TO SIC 38211 $11.09

- 10 -


GROWTH OF WORLD SEMICONDUCTORS VS. U.S. FRACTIONAL HP MOTORS

1D0

10

1 *

j n 1830

FRACTIONAL HP ELECTRIC MOTORS

(U.S. SIC 36211)

$175B

X ^ 1»40 1»S0 1960 1870 1B80 1990 1994

- 11 -


WORLD S/C AND MOS l/C MARKETS HISTORY AND FORECASTS

100 -

10 -

Itl c B

I

^

-

-

1

/s/c

1

1

!

/ MOS l/C

I

DATAQUEST / / FORECAST / /

21%CAG / /

f DATAQUEST FORECAST

29%CAG

' "

$1758

$129B

$60B INTEL

ESTIMATE 20°/DCAG

1 ^

.1 19S0 1960 1970 1980 1990 1994

- 12 -


Dataquest

semiconductor industry conference · semiconductor industry service howard z. bogert mr. bogert is...

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