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In spite of this, however, the industry should grow over the long term-as will the industry's thirst for engineers and other qualified personnel. Integrated circuits contain millions of transistors and perform a wide range of functions: Logic chips do mathematical calculations, signal processors decode music and video, memory chips store information, microprocessors run computers and other devices, and controller chips run electronic devices such as VCRs or printers. Within the IC world, Intel is the dominant player; Advanced Micro Devices is another important player. A smaller but faster-growing segment is digital signal processors, the stand-alone microprocessors used in cell phones and PC modems, which some estimate will be a $50 billion market in the next decade. Texas Instruments dominates this market, with Analog Devices and Motorola chasing it, among others. More and more intellectual property is going onto chips, increasing their functions and giving them even greater applications, especially in consumer electronics. This industry segment should grow to huge proportions as more digital products are developed. Other semiconductor industry manufacturing segments include logic chips, microcontrollers, and flash memory. This industry has its own law. Gordon Moore, one of Intel's founders, predicted the power of microprocessors would double every 18 months. Known throughout the industry as Moore's Law, this pronouncement has largely held true since he made it in 1965. By virtue of this doubling-and the applications that this increase in power has made possible-the semiconductor industry has thrived. Trends Telecommunications Semiconductors used to be the brains of the computer industry. They are fast becoming the brains of many industries, affecting the telecommunications sphere most of all. Thanks to the low cost of the wireless chip, cellular phones are becoming almost as prevalent as the regular old land phone in the U.S.; in Europe they are even more so. And in underdeveloped nations where the high cost of implementing telephone wire infrastructure prohibits many households from acquiring phone service, cell phones are allowing communication to become more universal. Spreading Applications More and more products are being made with microprocessors inside-from cars, which use chips to control a variety of functions including air bag deployment and anti-lock brakes, to small appliances. The world of science is benefiting from the low cost and high performance of semiconductor-driven technology, for instance in conducting research on genes, where keeping track of the sheer number of possibilities requires computerized help. A whole range of medical diagnostic tools, such as MRI and ultrasound, depend on semiconductor-based equipment. And at the other end of the usefulness spectrum there are pens that contain digital clocks and greeting cards that make music courtesy of a microchip inside. No doubt, microchips will spread into more and more parts of our lives in the years to come. Rebound? Not Yet The economic downturn has been very hard on the semiconductor industry. Corporate spending on chips plummeted with the decline, and semiconductor orders all but dried up. Indeed, in 2001 semiconductor revenue fell by nearly a third. While business has improved a bit in 2002, many companies are back down to revenue levels that they last saw in 1997 or 1998. And fab, or chip factory, utilization rates continue to be weak. It may not be until well into 2003, or beyond, that the industry enjoys a true recovery. Innovative Products While the picture's bleak in the short term, in the longer term things are brighter. One driver of this outlook: innovation. The semiconductor industry continues to develop. Sometime sooner or later, 64-bit chips will replace 32-chip chips as the standard for PCs. And new markets, such as the one for ferroelectric chips, which will provide enhanced performance for mobile phones and other products with wireless features, hold a lot of promise. Unlikely Partners This is traditionally a very competitive industry. So it's a bit of a surprise that some traditional competitors have been collaborating on a variety of projects. Advanced Micro Devices, Infineon, and United Microtechnologies are now working together; so are Motorola, Philips, STMicroelectronics, and Taiwan Semiconductor. This is a sign of difficult economic times. How It Breaks Down Chipmakers From the early days of the industry, talented engineers have had a passport to travel-ex-Fairchild Semiconductor execs (including Moore) left to form companies like Intel. Even today, top design engineers with great ideas can go into business for themselves, setting up small design shops and selling their designs. However, over the last several decades, the cost of going into-or staying in-the manufacturing end of the business has become huge. Today, a fab, or chip factory, costs more than $1 billion to build. As a result, chip fabrication forms its own segment of the industry and is populated by a relatively small number of huge players, including the microprocessor and memory chipmakers (like Intel, Motorola, IBM, Texas Instruments, and Micron) and ASIC (Application Specific IC) makers like IBM and LSI Logic. Fabless At the other end of the spectrum are the fabless shops, such as Xilinx and Broadcom, which tend to focus on design rather than manufacturing. These companies either outsource production of their chips to the companies with fabs or rely on sales of intellectual property (that is, chip design) to the growing number of companies seeking to license specific designs. The fabless segment includes makers of PLD (programmable logic devices-chips that can be programmed after being created)-and the numerous small design shops that have been started by design engineers who have left the bigger players. Although these companies lack the stability of the bigger companies in the mature segments, there are more possibilities for growth here and often a good chance that a company might be acquired by one of the bigger companies. Foundries Some companies leave the design of chips to others, whether that means chipmakers outsourcing part of their manufacturing or fables players, and focus only on the manufacture of semiconductor products. The biggest players here are the Asian companies Taiwan Semiconductor and United Microelectronics. Semiconductor Manufacturing Equipment The semiconductor industry relies on the multibillion-dollar semiconductor manufacturing equipment (SME) sector for the equipment used to manufacture and test semiconductors. This sector follows the roughly four-year boom-and-bust cycle of the semiconductor market. Its leading player is Applied Materials, which makes wafer-fabrication equipment, among other products; Cadence Design Systems and Mentor Graphics, which focus on electronic design automation (a rapidly growing segment); and Photronics, which creates the quartz plates used as stencils to transfer circuit patterns onto wafers during production. A subset of the SME sector is testing equipment; KLA-Tencor and Teradyne are leaders in this area. Finally, an overview of the industry would be incomplete without mentioning the companies that manufacture packaging such as OSE USA and distributors such as Arrow Electronics. Job Prospects The semiconductor industry has been hurt by a decline in corporate demand, so layoffs have resulted in some companies. The majority of available jobs go to chip designers with computer science or electrical engineering degrees, but there are other opportunities in machine design, factory design, finance, marketing, operations, purchasing, information technology, and strategic planning. Chemical engineers and technicians find work in manufacturing. Those with backgrounds in chemistry, physics, and other physical sciences can find jobs making semiconductor materials and packaging. On the marketing side, sales and marketing jobs often go to individuals with technical backgrounds. Like other high-tech industries, this is a fast-paced, rapidly changing field, and you can expect to work hard; workweeks often exceed 50 hours. In return, you'll make a competitive salary and can expect stock options-and if you land at the next Intel, these could make you rich. Testing and assembly operations-both labor-intensive activities-are generally located in Asian countries and other places where labor is cheap. If you want to travel, get into assembly or packaging. Fabrication and R&D; generally take place in the United States and other industrial countries, because both require a technically sophisticated workforce attuned to American market needs. Top Ten Major Players, by 2001 Revenues Rank Company Revenue ($ million) % Change from 2000 # of Employees 1 Intel 26,539 -21 83,400 2 Solectron 18,692 32 57,000 3 SCI Systems 8,714 5 36,433 4 Texas Instruments 8,201 -31 34,724 5 Applied Materials 7,343 -23 16,263 6 Micron Technology 4,516 -38 18,100 7 Jabil Circuit 4,331 22 17,097 8 Sanmina-SCI 4,054 4 16,500 9 Advanced Micro Devices 3,892 -16 14,415 10 Analog Devices 2,277 -12 9,000 « Return to Previous Page Career Content ©2003 The Employment Channel		What search engine do you use most? • Yahoo! • Google • Excite MO Power Ball:  27, 34, 42, 49, 52, Powerball: 23, Power Play: 2 IL Mega Millions:  1, 10, 17, 23, 35, Mega:45 results posted by 9am following day Saint Louis, MO Sunny 48°F MORE→
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