Over the last several decades we have become a throw-away society. My parents, who grew up during the Depression, tried to fix broken products with replacement parts rather than throwing them away and buying new ones. I often worked with my Dad fixing washers and dryers, and remodeling, rewiring, and rooting sewer lines to save money.
For the generation that followed (including mine) it was often cheaper and less hassle to throw away a product and buy a new one. The latest product typically had more features and better performance, often at lower cost than fixing the broken item. Our conditioning to replace rather than fix was an easy transition.
Consumers came to expect each new product to have significant improvements. Manufacturers, in turn, drove technology development ever faster, a treadmill that caused all suppliers to run faster and spend more money to remain competitive.
Over time, rising costs forced many suppliers to reevaluate their businesses. Many opted out of their vertical integration, deciding to focus on a subset of their capabilities and jettison expensive operations.
In semiconductors, for example, 72 fabs have shut down in the last four years, according to a recent report from IC Insights. Many were 100 or 200 mm wafer lines that could not compete against the mega foundries using 300 mm wafers. The multibillion-dollar cost of building a fab is forcing many suppliers to exit the foundry business, limiting design choices and innovation.
Apple provides an example of how to provide consumers great products while still having great financial returns. The company does not always embed the latest technologies in its products. By using proven components, it reduces risk and costs. When Apple does use leading-edge technology, it focuses attention on the higher risk and cost of the resulting products.
Today we need something like the "Think Different" campaign Steve Jobs started at Apple, this time applied to our whole industry.
— Bill Martin is President and VP of Engineering at E-System Design, a vendor of EDA tools for system-in-package designs.