INDUSTRY NEWS

New SEMI president grapples with trade group's rapid growth

MOUNTAIN VIEW, CA—Handling the explosive expansion of its trade shows, improving standards cycle times, and determining the direction of its education program are just three of the major challenges facing a healthy and growing SEMI, says Stanley Myers, the trade association's new president.

Speaking in his office here two months into his tenure, Myers, a long-time member of the organization's board of directors, also said that SEMI will need to improve member services offerings such as the market statistics program. Regarding the trade association's central role in the industry's transition to 300-mm wafers, Myers asserted that the semiconductor industry downturn hasn't affected the momentum of SEMI's 300-mm initiative. And the trade group has now put its weight behind a lobbying effort to spur the U.S. government to create a more favorable investment environment for the entire industry.

The folksy former president of Mitsubishi Silicon America inherits an organization that has grown to more than 1800 member companies worldwide during the 13-year incumbency of his predecessor, William Reed. The new association head likes what he sees, but he also sees a big job ahead of him. Wearing a white shirt, Myers--his tie loosened and his sleeves rolled up on a mid-November afternoon—looked the picture of a chief executive ready to get to work.

"The SEMI organization over time has grown and has been laying tracks in the right direction," he asserted. "If you think in terms of a big locomotive getting a bigger load and heading into the future I really see my job as understanding that and making it a smoother ride, and making it a faster ride, because of a faster growing industry."

Myers believes the ride can be smoothed by avoiding potential "potholes." Chief among these possible obstacles is how best to accommodate the rapid growth of SEMI's 11 global trade shows. In quick succession Myers fired off show-related questions: "How big can they get? Where should they be located? How do they best serve the members?"

SEMI's shows committee is examining these issues and related matters, including the segmentation of Semicon/West 97 by dividing the event between front-end exhibitors in San Francisco and back-end exhibitors in San Jose over a five-day period. "The first question is: 'How's that working out?" Myers said. "I don't know, and nobody else will know until it works. But is it the final solution? We don't know, and it's going to require input from members and attendees, [telling us] what they would like."

Asked whether a rumored move of Semicon/West to Las Vegas is under consideration, Myers replied: "Certainly it is. I've heard the same scuttlebutt, and I've been here only two months. That's exactly what it is; it's a rumor. SEMI has a problem. The Moscone Center [in San Francisco] is too small. We thought we could alleviate that problem for a period of time by segmenting the show... [because] we also needed to highlight our back-end [members]. That's a big part of our business."

Calling this temporary solution "a Band-Aid," Myers added, "The real question is: Is it best for the members to have a megashow where you have front-end, back-end, big company, small company, materials, chemicals, and gases all under one roof and do some consolidation? Or are you better off to split off and have more segmented shows?"

Limiting the number of exhibitors is out of the question, said Myers. Semicon/Southwest in Austin has outgrown the Texas capitol's convention center and will expand to Palmer Auditorium in October 1997, allowing the inclusion of 150 to 175 more exhibit booths. And the return of a SEMI trade show on the East Coast depends on demand in the area: "If there's a driver, if the DECs, the IBMs, and the Analogs and these people...say, 'we want our suppliers here showing their products' and they support the show."

Although Las Vegas certainly has the capacity and infrastructure to handle an event the size of Semicon/West, the chief executive believes that such a move would require some psychological adjustment on the part of a nostalgic industry. "Most of us who grew up in this industry are Silicon Valley guys. We didn't want to move from [the San Mateo County Fairgrounds]. We thought that Moscone would be a flop. It turned out to be a great move. Now we're in a different frontier, or on a different cattle drive, if you will, and we're driving to San Jose for the back-end."

Myers is riding herd on a trade association that is "much more diverse than we used to be. We still tend to think of SEMI as 'front-end, back-end.' I think we've got to really see it as 'front-end, back-end, big company, medium company, small company, materials company, components company, gases company, gas and chemicals,' for example."

This diversity affects the other areas that Myers has identified as challenges. In response to an industrywide shortage of qualified technical personnel, SEMI inaugurated an educational program in October 1995 under the aegis of Jay Pinson, the former dean of San Jose State University's College of Engineering. Today the trade association is considering how much emphasis to place on technical education versus business education. The technological programs teach how a semiconductor is made, for instance. In contrast, SEMI's business courses cover such issues as cost of ownership, selling in various world markets, and improving productivity. Myers said that SEMI's board of directors "is really struggling" with how much emphasis to place on technical programs.

Although the industry's downturn may make the shortage a little less acute, the long-term need for qualified personnel still exists, Myers asserted. Half of SEMI's first retraining classes in autumn 1996 were made up of engineers from the aerospace industry. Myers wondered aloud, though, whether SEMI's image hinders the ability of its members to attract recruits. "Take young engineers or engineers from another industry. Do they perceive us as 'semiconductor,' or do they really understand that the SEMI part [includes] equipment and materials?"

Myers said that SEMI wants "to build and broaden" its image in order to attract engineers in other industries as well as young engineering graduates. He wondered how overseas member companies that may want to build a U.S. plant can "attract the young, talented people" if these potential recruits "don't know what the industry is and what it does." Myers believes that the task ahead of SEMI is to better define the organization's mission so that an engineering graduate of San Jose State University, for example, "would say, 'I know these people. They don't make the beer, but they make the equipment that bottles the beer.'"

In the important area of standards the new SEMI chief wants to see more rapid implementation. "There's a lot of work to be done in standards well and beyond the quote, continuous improvement, unquote. We've got to learn to shorten the cycle time." Myers said that a "major standard" takes "a couple of years" before it is approved, depending on whether it deals with materials or with equipment. "We've got to really work at speeding up, improving the documentation, improving the consensus [building], and fundamentally decreasing standards' cycle time." SEMI's highly regarded market statistics program could use the same makeover, he noted.

Myers also questioned whether the big Book of SEMI Standards (BOSS) should be the only vehicle for making standards available to members and the industry at large. He suggested that it may be more effective and economical to make standards available electronically, so that someone wishing to access a particular protocol needn't purchase the entire BOSS.

"We have to really understand those things and then learn to deliver them to our 'customers,'" Myers asserted. "These are fundamental challenges, but anything we do [depends] on communication, cooperation, and coordination up and down the food chain."

Nowhere will that mantra be tested more than in what some experts are calling the biggest changeover in industrial history. SEMI, of course, plays an indispensable role in the transition to the new 300-mm wafer standard, which has a price tag of $13 billion attached to it, according to industry watchers.

Despite some turmoil in the semiconductor industry, Myers is sanguine about the prospects for the transition. "We think the downturn hasn't really affected the initiative to move ahead on 300-mm wafers. Certainly, it hasn't in Japan, that's rather obvious, and we don't think it has globally. We think the standards programs are moving ahead. Maybe they need to move with a little more alacrity, a little more speed."

"At this stage of the game," he continued, "I don't know of any individual company today putting out an order to equipment-makers saying, 'Make me so many of your 300-mm pieces of equipment.' So you've got the dilemma of the equipment guys saying, 'How much more cash am I going to have to burn before I get an order?' That's a dilemma that hasn't changed since day one.

"The bottom line is that there's got to be more alliances, there's got to be more cooperation and more standardization and working together so that industry itself can afford the transition. Whether any individual company can or cannot do that is immaterial. It's an industry issue and the question is how we can all work together to make it real."

Concerning the much-bruited wafer shortage, the former silicon industry executive noted that materials suppliers may have benefited somewhat by the industry's short-term slowdown. Whether there is a shortage "depends on the rate that the semiconductor guys pick up [business]. I think the materials guys have in fact bellied up the buzzsaw, so to speak, and have made their investments... and committed to the pilot lines needed for 300-mm [production]."

SEMI issued a position paper in mid-November 1996 urging the U.S. government to take a number of steps that the organization believes would lighten the transition's financial load. SEMI recommends reforming the tax depreciation schedule for chipmaking equipment so that the schedule reflects the fact that a tool's life span is 2 1/2 years instead of the current 5 years. This change would spur capital investment, SEMI argues, and level the playing field for domestic equipment suppliers against their overseas counterparts. The trade association also recommends that the government help to fund high-risk, long-term microelectronics R&D in advanced lithography tools, materials, metrology, and other critical areas. Further recommendations include a permanent R&D tax credit and support of high-tech university research.

Myers said that SEMI is comfortable in the legislative spotlight and will speak out on governmental issues that, as he put it, "relate to the well-being of our members." SEMI was active in lobbying against Proposition 211, a California ballot initiative that would have prohibited restrictions on attorney's fees in cases involving alleged securities fraud in transactions that resulted in losses to retirement funds and savings accounts.

Entrepreneurial-minded Silicon Valley saw passage of the proposition as a train wreck waiting to happen, and local execs breathed a huge sigh of relief when California voters soundly defeated it. "I wrote several letters as SEMI president to many of the big retirement programs ...recommending that they look very critically at this," Myers said. "Basically, we said, 'Look at the fine print. See if it's the right thing for this state, for the nation, and for the world.'"

When he's not pondering these big issues, the 59-year-old Myers enjoys family outings, salmon fishing in Oregon, and Stanford football. Given the challenges he has identified, the question for the new SEMI chief is whether he'll have the time to step off the speeding locomotive long enough to find his rod and reel.

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