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27 March 2015

The true value of semiconductors

Adel Eisa

Adel Eisa

Sales Director

After graduating from Bath University with a BSc/MEng, Adel started life as a design engineer…

My kids, like me when I was a kid, don’t care about semiconductors. When they ask me for a new phone or tablet it is all about the brand, size and colour. They don’t factor in about the processor, image sensor or the low power Bluetooth chip.

ChipIntel was hugely successful with their Intel Inside campaign during the 90’s, and I assume it worked because they’re still doing it, but few semiconductor brands have followed suit. Granted, as soon it is confirmed a semiconductor supplier is designed into the new Apple iPhone, their share price jumps but as hardware in some markets is becoming increasing commoditised is the differentiation now purely on price and supply chain, rather than trying to push the boundaries of technology? Are semiconductor OEMs increasingly being pushed down the value chain? And is all the recent M&A activity a consequence of this?

So what is the true value of semiconductors and more importantly the need for continued technological advancements and hence the investments required. Well I could ramble on and argue both sides but have a think about the following…..

“The U.S. semiconductor industry is a uniquely important contributor to the U.S. economy. Thanks to rapid technological development, the industry’s contribution to the U.S. economy grew 265 percent from 1987 to 2011, more than that of any other major U.S. manufacturing industry. According to the U.S. government, the U.S. semiconductor industry contributes more than $65 billion to the U.S. economy, more than all other U.S. manufacturing industries but two”.*

*source:  SIA The U.S. Semiconductor Industry. A Key Contributor to U.S. Economic Growth Matti Parpala | August 2014

Case closed..



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