The low tide countermeasure of semiconductor industry

The global development of the world is governed by the rule that the

is turned from decay to Sheng, Sheng and fu. World semiconductor industry reached the top in 2000, 2001 fell into the Abyss, 2002 saw a turnaround, a slight increase of 1.2%, 2003 fierce growth of 18.4%, this year more homeopathy rose 28.4%, reached the peak. The world's leading forecasters predict that the world's semiconductor industry will slow down next year. The World Semiconductor Trade Statistics Association (WSTS) predicts that 2005 world semiconductor industry growth rate will decline to 8.5%, 2006 negative growth 1%, 2007 can rebound 9.3%. The Semiconductor Industry Association of the United States looks forward to 2005 world semiconductor industry growth slowed, a slight increase of 4.2%, 2006 slightly reduced by 0.8%, 2007 can be a strong recovery of 11.7%. Isuppli forecast 2005 will slow to growth of 11.5%, 2006 flat micro-Increase 0.1%, 2007 9.2%, 2008 further increase to 10.4%. Gartner expects a significant slowdown next year, with growth falling to 5~10% and still likely to fall in 2006.
Since the advent of semiconductors, the world's semiconductor industry has never been a cyclical cycle. Although semiconductor industry is maturing, the so-called "silicon cycle" formed in semiconductor development is still a great challenge for semiconductor operators. Especially in the low tide period, will experience unbearable pain, we must take different measures to solve the dilemma, tide over the difficulties and welcome to a new round of prosperity.
IC Insight Company believes that the world Semiconductor has entered the 7th cycle (2003~2006). World GDP growth in 2005 fell from 4.5% in the previous year to 3%, and the world's electronic system will also surge from 2004 to 11%, rapidly slipping to 2% (Isuppli believes it will fall from 9.5% to 6.5%). The 2004 was dominated by strong growth in world GDP, a huge investment in the semiconductor industry, booming electronic systems and an increase in IC production. 2005 's emaciated will be due to stock imbalance and overproduction.
Many of the future variables, forecasting is a risk. At present, big institutions believe that the world semiconductor industry after the next two years will be lower. Low tide will be imminent, how to deal with? According to the experience and lessons of many companies, the measures can be summarized as follows.

Flexible management
silicon cycle waves ploughed, never stop, and the performance of the silicon cycle is not the same, the only constant is  change. Therefore, in order to change the management of the company, in one economic environment, the work experience can not be copied to another economic environment. "We moment-in not find solution for today and tomorrow, are based on what Morket in the past". Pay attention to change, promote change, entrepreneurial spirit plus hard work, is the guarantee of success.
to meet future growth, companies should take a closer look at positioning and establish a product strategy structure in order to continue to play an advantage in the market. Adhere to the core business, define the scope of business, focus on products, the provision of products in the market is likely to win the first, second position.
The company, while strengthening its growth potential and profitability sector, also must have the strategic courage to abandon the not my director unprofitable department, therefore in the low tide period, also often is the company merger and the Acquisition (M&a) Active stage, has for the future to invest to expand the company, has for the future development Initiative Slimming Company.
Cutting costs is the usual practice of all companies at a low ebb, and the company is under great pressure from the market, and is bound to find ways to maintain revenue and avoid losses to salvation. Keep an eye on the company's books, cut all the costs that can be cut, including variable and fixed costs, combine factories, cut employees, and, as much as possible, turn fixed costs into variable costs. In particular, the "Cash is king" has to prevent liabilities in times of low tide. Cut costs, reduce revenue, or make profits more beneficial.
People-oriented
arranges are synch important. Create value for the company, only through people, to customer service, to meet customer demand, to win profits. In the low tide period, especially to adhere to, people-oriented thinking, and strive to make all staff understand the company's truth, know the company strategy, Group Policy, tide over the difficulties.
Even if the last resort, to cut costs and streamline staff, we must do everything possible to retain key personnal (backbone talent), including management, scientific research, production, sales of all levels of elite, permanent fulltime core employee. They play a decisive role in the future success and development of the company.
In addition, companies employing some contract workers can be more flexible in adapting to changes in the objective environment.

Biting research and development
The semiconductor industry is a typical technology and capital-intensive industry. Historically, technology (represented by Moore's theorem) is the driving force for the development of the semiconductor industry. Although today put forward the application as the driving force, can still not be separated from the support of technology, in fact, the world's semiconductor technology has not stopped the development of a moment.
Semiconductor industry is entering the 300mm wafer, 130nm processing technology passes mature, 90nm has been quietly rising, 65nm are also ready to go, people are stepping up the development of 45nm processing technology. Coupled with the continuous application of new semiconductor materials, natural difficulties are many. The pace of future technology will not change, there are many jobs to be done, the most fatal is the development costs increased, and from investment to the time of return is stretched.
There are companies that must synch focus on innovation. Despite the stagnant economic environment, technology development to move forward, not a little stop. Because the company still maintain technology leadership, can improve their competitiveness, to meet the future of the new climax, to develop new technologies can better serve customers. For example, in semiconductor products, if soi, SiGe and other new materials to replace the silicon product performance to improve 30~50%, the price can be increased 3 times times.
Of course, because of the increase in development costs, increased risk, so in research and development investment, to shorten the front, maintain the core technology, focus on promising projects. Second, pay attention to the collection of customer needs, to meet their development strategy. Cooperation should be carried out to reduce investment and reduce risk.

Fig. 1 The 7th cycle of the world semiconductor industry

Close to customers
Customers are the lifeblood of the company, especially in times of low ebb. If customers profit from your service, customer loyalty company, depending on the company as a friend, it is likely to help each other to tide over the difficulties.
Companies should take the initiative to approach customers, listen to their voices. If a company can quickly collect, collate, analyze and use the information obtained from customers, it will undoubtedly be able to get out of the predicament more smoothly, improve the competitiveness and move towards the future success.
Pay close attention to the customer movement, the customer is engaged in all is conducive to his development and not necessarily beneficial to the supplier, service is not good, will lose the order. Therefore, it is important to enhance communication with customers, to obtain customer trust, to enable customers to understand the company's innovation (new technology, materials or equipment), using the company's innovation, believe that the company's strength get closer to your customer is important to your customers , which will weaken the adverse effects of the economic downturn. Achieve the goal of winning.

Towards China
Under the surging tide of economic globalization, the eyes of the operation must be global. China's economic stability continues to grow rapidly and the market's enormous potential attracts the attention of all the world's operators.
The company is engaged in the semiconductor industry after the process (assembly and testing), this is China as the representative of the Asian cause. The latest big downturn in the world's semiconductor industry has accelerated the momentum towards China.
China has a variety of cost-effectiveness in manufacturing, and many semiconductor manufacturers are building factories in China. If companies try to compete on the cost edge, it is inevitable to move to Asia.
There is no doubt that China's economy will continue to grow, so every promising company today has a plan for China.

Conclusion
Sunshine always after the rain. Low tide is the prelude of climax, which contains business opportunities. Industry insiders, especially CEOs, have learned a lot from the low silicon cycle and the company's success, and apply these lessons to the success of the semiconductor silicon cycle. Even the use of low tide to strengthen scientific research, wind investment, the opportunity to obtain greater development.
In addition, the development prospects of the world semiconductor industry are prospected. The semiconductor industry is still the pillar industry of the world economy, although it is maturing, but with the development of economic globalization, will continue to move forward. The semiconductor industry is no longer relying solely on the drive of technological development, but is turning to new growth through application promotion.
In the future, the semiconductor industry is still moving forward in a slow pace and is expected to be the 7th cycle of the world semiconductor industry in 2003-2006 years (Figure 1). And in the Asian market for the center and several home appliances as the representative application of traction, the world semiconductor market Size to 2008 will expand to 2000 1.5 times times, close to 300 billion U.S. dollars, the New Century (2001-2008) years of semiconductor industry growth rate of 11.6% per annum.
1995 years ago, the development of the semiconductor industry mainly from mainframe computers, until the 1995 WINDOWS95 listing, further promote the development of the PC, the PC as the representative of the technology and market together become the driving force of semiconductor development. After the baptism of the It bubble in the new century, the world semiconductor industry will be driven by the diversified applications of information appliances (including digital cameras, 3rd generation mobile phones, flat-screen TVs, DVDs, etc.) from 2004. At the same time, manufacturers should also pay attention to electronic tags, robotics, biochip technology development, ready to open up the corresponding market to maintain the semiconductor industry sustained and stable development. (table 1)