Telecoms market growth, not PC sales, will drive future revenue and profit in the semiconductor industry, claimed an industry expert this week.
Speaking at Semiconductor Equipment and Materials Internationals’ annual conference in San Jose, California, Fred Zieber said the current upturn - following a sharp downturn last year - in the semiconductor industry reflected the revolution taking place in telecoms and more specifically, the Internet.
Zieber, president and founder of Pathfinder Research, said the telecoms sector is rushing to keep up with demand created by the rising popularity of the Internet and a shift to global business networking models.
He commented: “We are now experiencing massive shifts in lifestyles, social interactions, institutions and business paradigms.”
He expects this up cycle to last as long as seven years and that to meet the resulting need for more capacity and faster connections, chip manufacturers are turning to devices such as system on a chip to help make communications faster, better and cheaper.
“Bandwidth is king. Connectivity is the glue holding it all together, and transforming something that is tremendously useful in lots of different ways,” he said.
But he warned that the chip industry’s old reliable source of revenues and profits, the PC, won’t be driving the surge in sales as the upswing progresses. This will come from the telecoms arena, he said.
A spokesman for Intel commented: “We see the telecoms area as one of huge growth as our purchase of Dialogic proves.”
However, he added, “The telecommunications market and PC market are two very different segments. The opportunity for growth in the server business is huge too as a result of the deployment of server technology in telecommunications with the convergence of voice and data traffic.”
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