The semiconductor industry is seeing a decline in demand for many products–this is especially prevalent in DRAM.  Currently there are talks with DRAM manufacturers about bailouts from the Taiwanese and South Korean government.  A colleague at EE Times, Mark LaPedus, writes about this being a bad idea as any bailout will temporarily save jobs but not increase demand for DRAM products.  See the article here .  The same thing could be said for the big 3 automakers from Detroit.  Being in the high-tech field with it’s endless possibilities for the future, it makes me wonder what really happens when a game changing technology is introduced.

Obviously a game changer (the cell phone itself, the iPod, the iPhone, ebay, google, amazon, etc.) will have an initial boom where the market does a quick uptake of the new technology.   Then, if everyone is reached in the home market (US for instance) then the technology expands around the globe.  But after it is everywhere, there is obviously a limit that is reached.  At this point an inevitable decline occurs, then the market is just for replacements/upgrades.  Do some of these companies really forcast the decline and maintenance part of this cycle?  With fabs expanding but never contracting, it would seem that semi companies would have us believe that the electronics industry will forever be expanding.  Is that reasonable?  Or are they counting on more game-changers?  Does being a publicly traded company force this issue?  It very well could as many short-term CEOs are looking for constant growth.  Maybe more leaders of companies should look at a long-term idea of boom, decline, maintenance.  And maybe, this is part of the reason that we are in the predicament we are in…

Advertisements