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Pinpointing Emerging Market Drivers

A Multitude of Enabling Technologies Promise Strong Growth

by Bijan Moslehi

Bijan Moslehi, PhD, is chief technology officer and senior vice president, semiconductor technology research, for The Noblemen Group, a boutique investment banking, strategic advisory, and business development firm. Moslehi has 20 years' experience working in the semiconductor and semiconductor equipment industries. He can be reached at

In recent years, several major technological advances have been under way which collectively promise to revolutionize and further expand the high-tech industry and consumer markets during the next decade and beyond. These areas are closely related to the semiconductor industry and have a direct impact on its products and end-markets. These emerging technologies are represented by significant progress in portable batteries, flat-panel displays, wireless and radio-frequency (RF) technology, clean and renewable energy generation, solid-state lighting, imaging, and sensors.

Developments in the following fields are of particular interest: portable fuel cells, flat-panel liquid-crystal displays (LCDs) and organic light-emitting diodes (OLEDs), radio-frequency ICs and radio-frequency identification (RFIC and RFID), photovoltaic solar cells, high-brightness light-emitting diodes (HB-LEDs), CMOS image sensors, and MEMS and sensors.

The synergistic combination of these and other similar enabling technologies with existing capabilities should lead to the creation of exciting new products with greatly improved features, encompassing a broad range of applications, including computing, communication, entertainment, safety, and commerce. The convergence of computing, communication, and entertainment is a powerful and growing trend that will also fully leverage and benefit from the introduction of these new technologies.

The increasing adoption and growth of portable and mobile systems, combined with the widespread application of wireless and RF technologies in various products, are driven by the need for on-demand content and information, anywhere, any time. Despite many advances in conventional batteries, limited battery life remains a serious problem in mobile electronic systems. Portable fuel cells for notebook PCs, mobile phones, PDAs, digital cameras, and portable music players have been promoted as the ultimate solution to this problem.

By obviating the need for recharging batteries, providing extended operating time, and enabling a true tetherless operation, the transition to refillable miniature fuel cells will have a profound effect on the utility of wireless and other mobile electronic systems and their market growth. Recent advances in fuel cells suggest that they may soon start to become a commercial reality. Many start-up and established companies are actively developing mini fuel cells, and the first commercial units are expected to hit the market over the next two to three years. However, significant cost-reduction efforts must continue, so that the rather steep price points of these introductory products can be cut.

The thinness and light weight of flat-panel displays have made them the technology of choice for monitors and TVs. The cost of thin-film-transistor liquid-crystal display (TFT-LCD) panels has been steadily dropping, and significant price reductions of LCDs have led to their explosive growth. For example, for LCD monitor sizes of 20 in. and smaller, the price per diagonal inch has dropped from about $100 before 2001 to less than $20 in 2005, and could soon reach $10.

The new and rapidly growing OLED technologies have emerged as an alternative to LCDs for applications in mobile phones and MP3 players. They are also expected to be used in small TVs (less than 14 in.), while larger OLED panel sizes have also been demonstrated. The light-emitting diodes offer high contrast, excellent viewing angle, high speed, superior color, and flexibility, and they do not need backlighting. An ink-jet printing process can be used to fabricate OLEDs, and extensive work is under way on developing roll-print and other low-cost manufacturing methods.

Fueled by wireless handsets, computers, and automotive and other consumer products, the RFIC market should grow at a rapid clip. The implementation of Bluetooth technology in various applications and devices, new wireless communication standards such as 802.11n, and emerging standards such as ZigBee (802.15.4), UWB, and WiMAX broadband wireless connectivity initiatives will offer new possibilities and capabilities in the networking of computers and multimedia systems and applications. The increasing number of Wi-Fi networks in recent years is another sign of RF’s burgeoning market clout.

Driven by its large-scale adoption by major retail outlets and the government in tagging consumer goods, packages, baggage, and passports, RFID has finally entered an explosive growth phase. The automated short-range RFID systems include RF tags, chips, and readers, and have numerous potential applications in the retail, inventory-tracking, banking, transportation, security, and service industries. Other RF technology applications include global positioning systems, tire-pressure-monitoring sensors and other RF sensors, and automated meter reading. All these applications need various semiconductor chips and components, the demand for which should escalate during the next decade.

Following 50 years of development, crystalline silicon or photovoltaic (PV) solar cells cost below $3.50 per watt (down from ~$55 per watt in 1976), and over the next few years are expected to approach the economically competitive target of under $1 per watt. This trend, together with government tax incentives and subsidies in Germany, Japan, and a few U.S. states, has created a compound annual growth rate of at least 30% for the PV cell market. With an estimated market size of more than $5.3 billion, solar-cell production exceeded 1600 MW in 2005. This growing demand has led to polysilicon shortages, with Hemlock Semiconductor and other suppliers scrambling to add capacity. Poly consumption by the solar industry is expected to match and then exceed that of the semiconductor industry in a few years. This explosive market-sector growth has also fostered an increase in solar-cell manufacturing equipment sales.

Another exciting area that has seen steady progress is high-brightness light-emitting diodes, which have found their way into a broad range of applications, including traffic lights, color display backlighting for cell phones, flashes for camera phones, LCD backlighting, automotive lighting, spotlights, and signs. In the not-too-distant future, HB-LEDs should replace the ordinary white lightbulb in many cases. HB-LEDs offer higher energy efficiency, longer life and durability, compact size, and much cooler operating temperatures than their traditional counterparts.

Several other emerging and growing technologies, products, and applications—CMOS image sensors, MEMS, and various sensors—also promise to contribute to the growth of the industry. In addition, newly developing megamarkets, such as China and India, and the advent of very-low-cost consumer products (home PCs at less than $300, cell phones at under $20, and DVD players at under $50) will continue to drive the growth in the number of units sold.

Over the course of the year, I will discuss important aspects of these emerging markets in more depth and examine the risks, opportunities, and potential as growth engines and market drivers in the Reality Check column. I will also examine critical factors, issues, and challenges faced in the manufacturing and production of these emerging technologies, both from the device-maker and equipment and materials supplier perspectives.

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