Chip Wars

Intel recently demonstrated 45nm Processors and that is clearly a leap ahead for chip industry.IBM also demonstrated the 45nm Chips on the same day.As Chip industry faces the Moore's Law challenge to shrink the the size of transistor on chip this move will definitely make competitors work hard to play the catch up game.The current technological node is 65nm(recent shift from 90nm).In Europe ST Microelectronics,Freescale(Recently acquired by Private equity investors) and NXP(Spin off from Philips) involved in collective Research and development(Crolles2 a initiative of ST) to combat technological issues involved at 65nm,45nm,32nm technological nodes.But this Crolles2 agreement about to expire in the end of 2007 and both Freescale,NXP with drawing from the alliance after that.This will raise pressure on ST to find new partners soonly as the Europes's largest Semiconductor company faces big challenges to solve the technological issues involved in the nano era.On the other hand Japanese chip makers Toshiba,Sony partnered with IBM to leap to 45nm and further.

In 2006 the world wide Semiconductor sales positioned at $248bn, a 9% increase from year 2005($227bn).According to iSuppli (a Semiconductor Market research firm) global semiconductor sales will raise to $280bn in 2007,a 12.8 increase from previous year.Consumer electronics is going to be the big driver of these numbers as demand for MP3 players,Mobile Handsets(Particularly in emerging markets),Gaming devices,HDTVs etc. surging like any thing.At the same time the technological convergence is on the prowl and the mobile phones are increasingly becoming as capable as PCs.These factors throw challenges to chip makers to vie for market share.

But my concern is Customer centric innovation is missing in many of the today's technologies.Most of the times it is becoming like 'technology for the sake of technology'.For example if you look at today's PC industry this argument will become more evident as they want to give Super Computers to grand mother.The question is do average consumer need that much computing power?At the end of the day average consumer needs limited to Word Processing and some Multimedia capabilities and in fact 90% of the features they get on their PCs will never be used in it's life time.Why do you need a dual core and Vista when you can get away with cheaper AMD Processor and Open source Software?If a consumer wants Music player give him a device which plays music only(Apple did that and reaped great success).But unfortunately Lobbying and Pushy approach really making consumers loosers and at least now companies should recognize what really customer wants.Simple User Interfaces and push button technologies are what customer wants,which makes them feel comforatble than apprehensive.