Semi Industry Growth Compounding Feeding and Accelerating on Itself

[Arthur Hanson]

The semi industry's growth is compounding on itself due to the compounding in the advancements it is creating in literally every aspect of itself.
There are numerous types of battery, mems, memory, processing, communications, sensor, display, manufacturing, and materials technologies, all advancing at ever-increasing rates by feeding on each other in a symbiotic fashion. Never in the history of man have so many areas of scientific pursuit have had the human resources, collaborative power, and technical fields all come together on a worldwide basis in such a fashion. Literally, all these fields are compounding on each other, changing everything they touch. Logistics is but one area. Few of the players outside the industry realize how semis have changed and are changing the logistics industry radically. These changes are continuing and accelerating every step of the logistics process. This extends from robotic warehouses to robotic delivery shortly.

The market for semis of all types is being underestimated. Most don't see or understand this trend which requires a comprehensive, worldwide view of all these advancements feeding on each other. The use of phase change materials by automated intelligent systems is but one worldwide mega-market that is still largely untapped and barely even noticed and has literally staggering implications in areas too numerous for most.

All this will lead semi technologies of all types on a growth curve unmatched by any industry in human history with more opportunities than most can even imagine. Just like any advancement, the dangers will be new and underestimated. I hope we also develop the wisdom to apply these coming changes to their maximum benefit instead of their maximum danger.

Any thoughts or comments on this solicited and appreciated.

 

[tooLongInEDA]

Perhaps this "new applications" growth will be the big driver.

But there is one other factor driving the rise in semiconductors - and that's the increasing built-in-obsolesence that their constant advance has brought into the products that use them. The more we increase the content and sophistication of chips, screens and such technologies in smartphones, cars, light bulbs, ... and an endless list of things, the more the lifecycle of these products shrinks.

I've probably owned getting around 15 mobile phones - at least 1 every 2 years. My parents have owned no more than 4 TVs over the last 60 years. While I work in semis, I do still prefer to buy stuff that will last.

That's great for us (working in the industry). But not great in the waste of resources it entails.

We already have the crazy situation in the UK that a car must now be equipped with electronic stability control. A feature I have never needed or used. Yet if your car develops a fault here, it fails the yearly test and soon becomes scrap as the repair cost on this non-essential "essential feature" is so high. So a failure in "tech" representing perhaps 2-5% of the cost of a product can result in the entire item being scrapped. "Tech push" is creating this waste.

 

[tooLongInEDA]

Arthur, what I'm really waiting for is when the year-on-year "more for less" gains that semis have delivered start to show up in industries like healthcare which have become accustomed to increasing costs in real terms (I believe across the developed world, obviously most notably in the US). Their really should we some productivity gains from semis and IT in industries like this. Why aren't they (yet) ?

 

[Arthur Hanson]

Arthur, what I'm really waiting for is when the year-on-year "more for less" gains that semis have delivered start to show up in industries like healthcare which have become accustomed to increasing costs in real terms (I believe across the developed world, obviously most notably in the US). Their really should we some productivity gains from semis and IT in industries like this. Why aren't they (yet)?

Very sadly, I have studied US medical, which ranks 37th in quality at the world's highest cost. The medical phrase "Do no harm" sadly has been replaced by "Increase profit margins." The waste and inefficiency of the US medical system are legendary, and the money spent on advertising is staggering. On top of this, one of the many factors that drive up cost is individual and small medical practices that are far, far too small to be economically or quality-wise viable. Only in sparsely populated areas should a small or individual medical practice of any type should exist. The whole structure of US medical is an expensive failure to the point the medical profession no longer deserves the respect we give it. Preventive care should be emphasized for an ounce of prevention is worth a pound of cure. A bad diet causes far more harm than the drug war ever inflicted. US medical needs a major rework, economically, structurally, and administratively if we are not to go bankrupt and have bad health. The tech world has many solutions and this should be the largest single market for semis with medical consuming 20% of our GDP or four trillion dollars.

 

[tooLongInEDA]

Arthur - absolutely. But the spiralling healthcare problem is worldwide. I wonder if a large part of this isn't the fact that the industry is structured in such a rigid way. The only way round that seems to me to be increased "self-care" - i.e. outside the scope of control of the medical hierarchies and interests.

I find the thinking around medical advances super-conservative too. Recent Covid vaccines a case in point. Vaccines are provided and the immediate reaction is "this is all happening too fast ... can't have been tested properly". But no one stops to ask "wouldn't it be great if we could reduce - let's say halve - the time to qualify a new vaccine ?" They don't seem to think about process improvement and cycle time reduction the way we might - or perhaps the public won't allow it ?

Until the general public properly understands risk and statistics (probably never), we'll probably run an "over-safe" regime where innovation is by default "suspect". Remember all the scare stories about radiation from mobile phones ?

Perhaps semis are heavily used there in an indirect way in computer modelling ? Or there's scope for increased modelling/simulations in future ?

I see at least four areas where we could improve - with our without semis - but perhaps with the sort of thinking you get from working in semis:

1) Develop better medicines - this seems to be the core job right now - but seems to be becoming increasingly costly
2) Figure out how to get medicines safely to patients faster (cycle time reduction)
3) Reduce cost of medicines - presumably the production cost is dominated by the fixed R&D cost in many cases and after that some year-on-year price reduction might be expected (like in semis) - remember also we used to have second sourcing in semis - could that model be used in pharma ?
4) Increased self-care outside restrictions of the "medical industry" - includes more preventive care

 

[IanD]

Very sadly, I have studied US medical, which ranks 37th in quality at the world's highest cost. The medical phrase "Do no harm" sadly has been replaced by "Increase profit margins." The waste and inefficiency of the US medical system are legendary, and the money spent on advertising is staggering. On top of this, one of the many factors that drive up cost is individual and small medical practices that are far, far too small to be economically or quality-wise viable. Only in sparsely populated areas should a small or individual medical practice of any type should exist. The whole structure of US medical is an expensive failure to the point the medical profession no longer deserves the respect we give it. Preventive care should be emphasized for an ounce of prevention is worth a pound of cure. A bad diet causes far more harm than the drug war ever inflicted. US medical needs a major rework, economically, structurally, and administratively if we are not to go bankrupt and have bad health. The tech world has many solutions and this should be the largest single market for semis with medical consuming 20% of our GDP or four trillion dollars.

As has been said before, the fix for the US medical problem is not tech, it's fixing the organisation and funding. There are many examples worldwide of how to do it better and/or cheaper, including here in the UK -- the NHS might not be perfect, but it's an enormous way ahead of the US system in both costs and outcome.

Tech will undoubtedly lead to major medical advances, especially preventative/early diagnostics and monitoring, and this alone should save a lot of money to pay for the tech rollout. But unless the US system changes it will still cost far more and deliver far less than the rest of the advanced world even after tech has worked its miracle...

 

[Arthur Hanson]

Medical should become one of the largest markets for semis of all types, from wearables, automation(there has already been built a robotic blood test including taking the sample. The current medical system does everything possible to block even the simple changes that could dramatically lower costs that are available right now. The tech industry is the only one that has the political muscle to overcome the regulatory and organizational barriers to lower costs and higher quality.

 

[IanD]

Medical should become one of the largest markets for semis of all types, from wearables, automation(there has already been built a robotic blood test including taking the sample. The current medical system does everything possible to block even the simple changes that could dramatically lower costs that are available right now. The tech industry is the only one that has the political muscle to overcome the regulatory and organizational barriers to lower costs and higher quality.

The medical industry worldwide is famously conservative, because the consequences of something going wrong are much worse than most tech applications -- you can lose your life, not just a smartphone -- and there have been many cases in the past of insufficiently proven treatment doing just that. I'm not sure I'd want someone with the famously high quality of Microsoft providing something that could kill me if it goes wrong, and this is exactly what would happen if the "move fast and break things" tech industry was given free rein in the medical arena.

There is undoubtedly a lot of protectionism of jobs and profits in the medical field stopping new treatments, and again this is if anything worse in the US than anywhere else because of the massive vested interests coupled with the huge litigation costs when things do go wrong.

It also doesn't help that there is no overall body dealing with effectiveness and cost of new treatments, leaving the sector at the mercy of overpriced-miracle-peddlers out to make a fortune from small fragmented health trusts with no negotiating clout -- here we have a government body called NICE (National Institute for Clinical Excellence) which looks at the cost and benefits (and safety) of new treatments, which if they're worth using negotiates a price with the supplier for the whole country (big business!), which is almost always far lower (sometimes up to 10x...) than in the US.

Yet again, you need to fix the US system, tech isn't a magic bullet that can solve your problems -- whatever it does for the US, you'll still be paying more for worse outcomes than everywhere else :-(

 

[tooLongInEDA]

The medical industry worldwide is famously conservative, because the consequences of something going wrong are much worse than most tech applications -- you can lose your life, not just a smartphone -- and there have been many cases in the past of insufficiently proven treatment doing just that. I'm not sure I'd want someone with the famously high quality of Microsoft providing something that could kill me if it goes wrong, and this is exactly what would happen if the "move fast and break things" tech industry was given free rein in the medical arena.

There is undoubtedly a lot of protectionism of jobs and profits in the medical field stopping new treatments, and again this is if anything worse in the US than anywhere else because of the massive vested interests coupled with the huge litigation costs when things do go wrong.

It also doesn't help that there is no overall body dealing with effectiveness and cost of new treatments, leaving the sector at the mercy of overpriced-miracle-peddlers out to make a fortune from small fragmented health trusts with no negotiating clout -- here we have a government body called NICE (National Institute for Clinical Excellence) which looks at the cost and benefits (and safety) of new treatments, which if they're worth using negotiates a price with the supplier for the whole country (big business!), which is almost always far lower (sometimes up to 10x...) than in the US.

Yet again, you need to fix the US system, tech isn't a magic bullet that can solve your problems -- whatever it does for the US, you'll still be paying more for worse outcomes than everywhere else :-(

IanD - I think you may be creating a rather optimistic impression of healthcare here in the UK. The assertion that outcomes are better here may be simplistic - on average they may be, but I suspect that there's a large top end of the market in the US where the outcomes are likely better (and waiting times far less). We are just more obsessed about "equality" (a term the politicians never stop to define).

Our US friends may also be unaware that most semi industry professionals will be offered company funded private healthcare in the UK. The fact that this is offered (and usually assumed to be offered) must tell you something. One of the downsides of the Covid episode is that it makes any reform to the sainted NHS almost impossible ... .

I'm not defending the US system here (or intentionally critiquing the UK one). But I'm not sure we're in a position to be handing out advice (no other country has copied our system). At the end of the day, both systems are resistant to change (for sometimes different reasons). Recall also the catastrophic record of government and NHS IT programs in the UK ...

Returning to an earlier (random) thought ... why is there no "second sourcing" in the pharmaceutical business ? Instead of that we have to wait 20 or so years for patents to expire before generics become available. And the pharma industry is constantly lobbying for longer patent duration.

 

[IanD]

IanD - I think you may be creating a rather optimistic impression of healthcare here in the UK. The assertion that outcomes are better here may be simplistic - on average they may be, but I suspect that there's a large top end of the market in the US where the outcomes are likely better (and waiting times far less). We are just more obsessed about "equality" (a term the politicians never stop to define).

Our US friends may also be unaware that most semi industry professionals will be offered company funded private healthcare in the UK. The fact that this is offered (and usually assumed to be offered) must tell you something. One of the downsides of the Covid episode is that it makes any reform to the sainted NHS almost impossible ... .

I'm not defending the US system here (or intentionally critiquing the UK one). But I'm not sure we're in a position to be handing out advice (no other country has copied our system). At the end of the day, both systems are resistant to change (for sometimes different reasons). Recall also the catastrophic record of government and NHS IT programs in the UK ...

Returning to an earlier (random) thought ... why is there no "second sourcing" in the pharmaceutical business ? Instead of that we have to wait 20 or so years for patents to expire before generics become available. And the pharma industry is constantly lobbying for longer patent duration.

I never said the NHS was perfect, it has many problems -- but according to all the worldwide comparisons it comes *way* above the US in terms of both outcomes (for the whole population), cost, and value-for-money (NICE helps a lot with this) -- the US is especially bad for people who aren't rich and well-insured. So do various other healthcare systems, the NHS is not unique for this, but actually it comes out pretty well overall -- though not for everything, it falls down in some areas like cancer care.

Private healthcare in the UK is used for non-urgent medical needs, and for this it is a lot better than the NHS with far shorter waiting times, I've used it several times. For emergency and urgent needs the NHS can vary from excellent to barely adequate -- for example when I had urgent eye problems (retinal detachment, as it turned out) I went in to Moorfields eye hospital late one evening and was seen quickly by a consultant, who said "no you're not going home, I'm operating on you tonight". Other times I've had to wait six hours to get seen in A&E. But in both cases the bill was a few pounds for drugs, not tens of thousands.

Medical care in the US if you have company private health cover (as I do) is indeed excellent, but is *ludicrously* expensive -- my colleague's wife had their child there in a private hospital, normal birth, in one day and out the next. The bill to the insurers *after* the "insurance company discount" was just under $100,000, every single thing (swabs, tissues, stitches) was charges for -- and the "pre-discount" bill (which is what a private individual would have paid) was over $150,000 :-(

There isn't "second sourcing" because Big Pharma doesn't want it, with some justification -- if they've spent billions developing a new drug (which is unfortunately what it costs nowadays) why should somebody else jump onto the bandwagon "for free" once it works? Never mind the money spent developing all the drugs that went nowhere. Second sourcing would encourage companies to sit on the sidelines and let somebody else do all the hard work, and then make money from it -- and in turn this would discourage research by the companies doing it (why shouldn't we do wait-and-see too, it's make us a lot more money?).

This might change if the cost of developing drugs could be brought down, possibly this could be something that technology could help with, but a lot of the cost is trials and safety precautions which are mandated by an industry terrified of crippling litigation if something like Thalidomide ever happens again.