Convergence to drive growth

BY DICK PIERANUNZI President and Chief Executive Officer, STMicroelectronics, North America, Carrollton, Texas

This year and the years to come will inevitably be compared with the euphoric growth of 2000. So is there a stimulus to rival the market conditions of 2000? The answer lies in convergence. As OEMs begin their quest for convergence products, one thing is very clear: OEMs need to partner with broad-range, global semiconductor companies that possess leading-edge technologies and a broad intellectual-property portfolio. Additionally, these semiconductor companies must have the manufacturing muscle, system-on-chip (SoC) expertise and system knowledge that can only be obtained through long-term participation in the convergence market segments.

We don't believe everything will converge into one product. Instead, different applications such as the set-top box, the home computer, the game box, cell phones and others will acquire many of the same features. The ability to add those features to so many different products demands broad system knowledge.

Another skill of paramount importance is the ability to successfully develop and manufacture a system-on-chip. Technology is important, but it is crucial to have the ability to integrate an OEM's design onto an SoC, then have the system expertise required to tie all the pieces together into a harmonious and bug-free design.

Convergence will also force OEMs to reduce the number of semiconductor suppliers they use. This phenomenon is already taking place. Few semiconductor suppliers have the broad range of technology and system knowledge that OEMs require. Furthermore, time-to-market and time-to-volume considerations are forcing OEMs to work with their suppliers early in planning and design. Time-to-market constraints also require proven intellectual property. And, since the supplier's cost of such developments is high, they require a larger market share to satisfy ROI needs.

Provided there are OEM/semiconductor-supplier partnerships that can swiftly and seamlessly move from concept to production, the possibilities in toys, appliances, entertainment, business productivity and other applications are endless.

STMicroelectronics is meeting this challenge today. Like a few SoC leaders, we possess a world-class manufacturing machine along with a broad range of technologies and intellectual property. But what really distinguishes ST is the strategic partnerships that have complemented our system expertise and aided our ability to compete in an ever-evolving marketplace.