When you look at what it takes to be in the IC business, versus the return, sometimes you have to wonder if it makes sense at all
One thing that has always impressed me about the "electronics" business is how many genuinely smart and innovative people are in it. Whether they design ICs, develop tools or semiconductor processes, produce basic passives, or provide the ultrapure materials and high-end metrology needed to make the dreams come true, our industry needs the combined efforts of smart and hard-working people up and down the "food chain" as well to the left and right of it as suppliers and testers.
And, of course it takes serious money. Today's fabs cost over a billion dollars, and while most companies no longer have internal fab capacity but use external foundries, it is still an expensive undertaking that everyone in the industry has to pay for sooner or later, whether directly or indirectly.
But maybe we are so smart that we don't see that sometimes the apparently not-so-smart folks are actually smarter than we think. Several years ago I met a man whose business was making and supplying small plastic products to toy shops and museum stores. Among his best sellers was a small, injection molded plastic cylinder about two inches long (5 cm) with coarse internal threads, which let you connect the tops of two standard soda bottles to each other (one or two liter, no matter). If you filled one of the bottles about one-third way up with water, you could then swirl it and make a water tornado in the bottle. You may not think much of this, but he said it was a very popular item.
But what really impressed me were these facts: his tooling costs for the injection molding machine were quite low (under $10,000), production tolerances were modest, final test consisted of a quick visual inspection, product life was years and years, post-sales applications support also was low, field returns were non-existent, and raw materials cost was a few pennies.
So even if he did not sell millions of these widgets, the return on invested cost and development effort is amazingly high, and the product life is quite long. And I am thinking to myself, sure, we may have a lot of smart people in this industry, but there are plenty of other smart people out there outside of our business who are involved with what appears to be much more mundane, but is still a very nice business within certain bounds!♦