Innovation driver for IC growth: Chang

RISERS::The founder of TSMC thinks the semiconductor industry is likely to outpace global GDP growth, which is forecast at 2.5% to 3%, in the next decade or two

By Lisa Wang  /  Staff reporter

Thu, Sep 06, 2018 - Page 12

Driven by industry innovation, global semiconductor revenue should continue to grow at an annual rate of between 5 and 6 percent in the next one to two decades, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) founder Morris Chang (張忠謀) said in Taipei yesterday.

That means the industry would continue to outpace forecast annual global GDP growth of 2.5 to 3 percent over the next 10 to 20 years, he said.

“The world semiconductor industry’s growth will be 200 to 300 basis points faster than the world GDP growth,” Chang said in a speech, entitled “A look at semiconductor companies’ rise and fall through innovations in the semiconductor industry,” at the SEMICON Taiwan Future Starts Here show, celebrating the invention of integrated circuits by Jack Kilby 60 years ago.

Over the past 60 years, 10 major innovations have fueled the industry’s growth and benefited semiconductor companies that invested heavily in innovations, including Intel Corp and Samsung Electronics Co, Chang said.

Intel invented and invested significantly in microprocessors during the 1970s, while Samsung became an important “riser” after pouring plenty of resources into developing memory chips during the 1980s, he said.

TSMC was also one of the “risers” in the semiconductor industry over the past 30 years, aided by Chang’s development of the dedicated foundry business model in 1985 and the chipmaker’s heavy capital investments.

Chang ranked his business model 10th on his list of 10 major innovations, which includes Moore’s law in 1965 and the invention of memory chips in 1966.

Heavy subsidies by governments, such as China and the United Arab Emirate, could be a kind of business model innovation, while artificial intelligence and machine learning chips are among innovations that are still evolving, Chang said.

As they are still evolving, it has yet to be determined which party would benefit from their progress, he added.

There “will continue to be risers and decliners in the industry. There is plenty room for more innovations,” Chang said.

In his speech in the afternoon, TSMC chairman Mark Liu (劉德音), Chang’s successor, said that innovations in the semiconductor industry are gathering pace.

It took 30 years for desktop computers to become mobile devices, but it only took 10 years to upgrade feature phones to smartphones, Liu said.

Moreover, it took only two years for autonomous cars to make the transition from desert roads to urban use, he said.

However, before self-driving cars can become a part of daily life, they would need to have 100 times more computing power than what the industry has to offer now, as well as the commercialization of 5G technology, Liu said.